People's Democracy

WHILE making a habit of rolling back his budget proposals annually, finance minister Mr Yashwant Sinha has also evolved in rolling ahead with corruption scams. As we go to press, the parliament is discussing the grave acts of omission and commission he indulged in. The Vajpayee government is shamelessly defending the finance minister who is facing serious charges of corruption and has been shown to have received money from the infamous flex industries, whose chief was already arrested once on grave charges of corruption.

Simultaneously, Mr Sinha has been named in the by now infamous Rs 950 crore fodder scam in Bihar. Gulshan Lal Ajmani is a former MLA of his own party (the BJP) from Ranchi, and an accused charged with taking Rs 15 lakh from the huge amounts withdrawn fraudulently from the Bihar government treasuries. Ajmani has, in a sworn affidavit to the Jharkhand High Court, admitted that he took the money, but under directions from Sinha. He further submitted in the sworn affidavit that this money was used in Mr Yashwant Sinha’s election campaign for the Bihar assembly in 1995. (For details, see People’s Democracy, May 12.)

While the BJP and its NDA partners have been crying hoarse demanding Laloo Prasad Yadav’s resignation and imposition of president’s rule in Bihar on the issue of the fodder scam, the CBI have not investigated the facts so far in these five odd years --- despite the submissions by Mr Ajmani. This has been stated before the High Court. If the BJP applies the same yardstick as it applied for Mr Laloo Yadav and others accused in the fodder scam case, Mr Sinha should be sacked on this count alone.

Readers will recall that even prior to the 1999 elections, the then hand-picked advisor to the finance ministry, Mr Mohan Guruswamy, had quit after making serious allegations concerning the "steal deal" involving the nexus of the private steel producers and the BJP government. As expected, nothing has been done to inquire into these charges.

Later came the exposure of the finance minister’s direct involvement in exempting the foreign institutional investors (FIIs) from paying any capital gains taxes on the profits they make in the Indian stock markets. The loss to the government’s exchequer on this count alone was estimated to be to the tune of Rs 3,000 crore annually. Intervening promptly to negate the notices issued by the income tax department to the FIIs asking them to pay the required capital gains tax, the finance minister publicly ruled that companies registered in Mauritius need not pay taxes in India because of the Double Tax Avoidance Agreement (DTAA) between India and Mauritius. Over 300 FIIs had then, in 2000, opened post box offices in Mauritius to take advantage of this loophole and defraud the country of a whopping Rs 3,000 crores annually.

Strangely, this fraud under the "Mauritius route" continues to date even though Mauritius does not levy any capital gains tax. DTAA agreements are entered between two countries which both levy the same or a similar tax. In this case, it is clear that since Mauritius does not levy capital gains tax, the DTAA cannot be applicable. Yet it continues with the finance minister’s personal approval and involvement. It is not far to seek as to who are the recipients of the largesse from such measures.

Any government with even a modicum of respect for morality, probity, accountability and transparency would have felt ashamed over the continuance of any such person as finance minister. For the sake of India’s integrity, such people must quit their offices, and all such charges must be probed to punish the guilty. It would, however, be naïve and unrealistic to expect this Vajpayee government, which has excelled all records of corruption hitherto known in independent India, to adopt such a course. For, after all, Mr Vajpayee is the presiding deity of a pantheon called the NDA (National Disaster Alliance) led by the BJP (Bharat Jalao Party) (with due apologies to original authors). The sooner they quit, the better for India and its people.