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Scams, scams, scams. Wherever you look, there are scams. So many in
fact that people are losing faith in everything. Unless you are a cynic and
say, as many do, that corruption rules India with a firmer hand than any
Government, you must be disgusted to see how everyone in power has
been looting India.
Indians are shaken as the last couple of months have been raining scams.
After electing a strong Government led by Congress at Centre the common
man expected a clean and stable Government under the leadership of
Congress, i.e. Sonia Gandhi, Dr. Manmohan Singh.
Indians have seen various scams but the present scams-ghotalas have
rendered the Bofors scam of 100 crores or the scam of Harshad Mehta and
Ketan Parekh as mini scams.
While the year 2010 comes to a close, we have seen one scam after another
tumble out and has exposed in Congress led UPA2 as an outfit which has
encouraged and epitomized Corruption.
The CWG scam is Rs.70,000 crore and growing. The 2G scam is
Rs.176,000 crore. Some one asked as to how many zeroes would be there
in the above figures.
The year 2010 will be known as the worst year Indian has ever seen.
seen It is
the year of Ghotalas and Scams.
For the first time Indian has seen in a span of 10 days (i.e. in November,
2010) the ruling party Congress/UPA has forced its 3 important
leaders/Ministers to submit resignations.
i) Shri Ashok Chavan, Chief Minister, Maharashtra was thrown out for
“Adarsh Society Scam. The Chief Minister himself got allotted 4 flats in the
posh South Mumbai locality in the name of his in-laws. The Housing Society
which was meant for the Kargal War Hero/Martyrs.
◦ The scam involved 4 Chief Ministers of the Congress – Mr Narayan
Rane, Mr Vilasrao Deshmukh, Mr Sushilkumar Shinde and Mr Ashok
Chavan.
◦ Later under the name of honoring the country's Hero's of Kargil
War, flats costing over Rs.7,000,00,00 were given away to Ministers
Bureaucrats and their kin at throw away prices.
ii) Shri Kalmadi, the Chairman of the Organizing Committee of
Commonwealth Games was sacked as Congress Parliamentary Party
Secretary.
Secretary
iii) Shri A Raja was compelled to submit his resignation for the 2G Telecom
Scam.

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` Mehengai-Maha Ghotala – In spite of a robust foodgrain production,
overflowing godowns, the prices of essential commodities went up by 50% to
100% since the Congress once again came to power in 2009. The prices of
potato which was Rs.6
Rs 6 to 8 per kg few months back had gone up to Rs.15Rs 15
per kg. Price of onion which was Rs.6 to 8 per kg went beyond Rs.30.
Lasoon/Garlic which was just Rs.15 to 20 per kg. in 2008-009 is Rs.300 per
kg. now. Petrol prices have been hiked by Rs. 2.75 per litre last month.
` It is now public. Courts have passed strictures on Public Distribution
System/Ration Scheme. Thousands crores of foodgrain meant for poor
people went into black market.
market A former Congress Chief Minister in
Arunachal Pradesh has been arrested for the same.
` In another shocking instance, the Govt. has now admitted to grave lapses in
the Export of Non Basmati Rice.
` The government has admitted that public sector units (PSUs) did not follow a
transparent procedure for non-basmati rice exports.
` The matter has been referred to the Central Vigilance Commission (CVC) for
its advice.
` The government had banned export of non-basmati rice in 2008 to put a
check on rising prices in the domestic market.
` However, it allowed export of a limited quantity to some least developed
nations, including African countries, on diplomatic considerations.
` But the pre-determined terms of contracts between foreign buyers and
domestic suppliers (with small margins for the PSUs) led to “hugely
disproportionate profits accruing to private parties, namely the foreign
government nominated domestic suppliers in India”.
` The CAG report has revealed that a total of Rs.1,76,379
Rs 1 76 379 crore was the loss
to the government’s exchequer due to the Telecom Ministry’s decisions on
the sale of 2G spectrum. Now the evidence has been furnished by the CAG
to the President of India, it is clear that the matter must be thoroughly
investigated, through the constitution of a Joint Parliamentary committee
(JPC)
` The figures available on CWG through RTI showed that the cost of
renovating the Jawaharlal Nehru Stadium was a whopping Rs 961 crore.
` Compare these figures with the fact that the construction of a brand new
state-of-the art stadium in Nagpur cost only Rs 84 crore!
` Various agencies are already investigating some of these charges. A
g
toothless Shungloo committee has been formed byy the UPA-II ggovernment
to investigate the allegations. This may end up doing more of a cover-up job
than bringing the guilty to book.

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` What is required is that the government orders speedy investigations
through a JPC to ensure fast and punitive action against the guilty.
` This year is ending with a ugly title that 2010 is a year of Scams and the list
i threatening
is th t i to t gett longer
l as every day
d passes by.b
` The Supreme Court has observed that the Prime Minister of India has
not replied or has taken any action on a letter of complaint by a former
minister and other two Members of Parliament.
` The BJP demands setting up of a joint parliamentary committee (JPC) to
look into these scams.
` The Congress has broken all records Bharatiya Janata Party
of corruption in the recent past which
was painful for the country. People of
this country have the right to demand
answers from the Prime Minister’s
Office.
` The CBI (Central Bureau of
Investigation) enquiry into the CWG
scam was not enough. CBI lacks the
trust and authority to punish bigwigs
like Suresh Kalmadi, Delhi Chief
Minister Sheila Dixit and Union
ministers Jaipal Reddy and M S Gill,
who were the political leadership
involved.
` The Prime Minister should explain
reasons for the lengthy delay on his
part in taking a decision on a plea for
sanction of prosecution of former
telecom minister A Raja on the
spectrum controversy.
` Congress means corruption and the CBI is a trusted arm of the party.
` The nation wants to know whyy no action had been taken so far against
g
Prasar Bharati CEO B S Lalli, who allegedly overruled the objections by
finance department and gave Rs 246-crore telecast rights of the CWG to an
entity, which produced a fake registration number and had no service tax
number.
` The Prime Minister and the Congress leadership owe an answer to the
public in this regard.

KIRIT SOMAIYA
National Secretary, Bharatiya Janata Party

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Easily the biggest ever Scam occurred in the Country.
The 2G spectrum allocation scam has caused the
national exchequer an estimated Rs. 1,76,000 crore.
There is a huge national outrage.
outrage Simply in terms of
the scale of money that has been swindled, it is easily
the biggest scam that this country has ever seen.

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` Congress Govt./ Prime Minister Responsible for Lacs Crores Loss to the Country
` In
I any organization
i ti whether
h th it is i Private,
P i t Public
P bli or the
th Government
G t Department,
D t t
there is a specific structure laid down for execution and implementation. The Head
of any Organization reviews on a regular basis the functioning of the entire
department and gets inside into working of the department or the division. Ultimately
the CEO of the Organization is responsible for running and maintaining the day to
day operations as well as implementation of policies.
` The major
j findings
g in the report
p of Comptroller
p and Auditor General of India ((CAGI))
clearly show various gaps in policy implementation inspite of the fact that rules and
procedures had been laid down.
` The Department of Telecom did not implement the Policy approved by Council of
Ministers in October 2003. How can the Department of Telecommunication value
the Spectrum in 2008 at 2001 prices?
` Why the Ministry of Finance was not associated when by the Cabinet decision of
2003, the Ministry of Finance was authorized to participate in the discussion of
efficient allocation of Spectrum and Price discovery? Why Ministry of Finance itself
did not become proactive and why this issue of allocation was never placed before
Cabinet for a review?
` It is surprising that the High Powered Telecom Commission which includes
members from Ministry of Finance, Commerce, IT Dept and Planning Commission
was not given an opportunity to deliberate on the merits of TRAI recommendations
at the time of grant of 122 UAS Licenses in 2008.
` Even the views and concerns of Ministry of Finance were overruled. Surprisingly
advice of Ministry of Law and Justice was also ignored. It is proved beyond doubt
that such important decisions taken by DOT without deliberation and discussion at
an inter ministry FORUM.
` Hon’ble Prime Minister’s suggestions were not followed. When PM himself is the
ultimate authority and the concerned minister reports to PM, where is the question of
suggestions? As a matter of fact PMO Office as a responsible final authority should
have instructed in no uncertain terms the DOT to follow strictly the guidelines and to
see that they are implemented. PMO office is not a consulting department for
suggestion but responsible for final implementation.
` The stake involved in the whole processes of implementation and allocation of
licenses was extremely high and how can PMO office allowed the whole thing to be
implemented by one person when the proper structure, policies and guidelines were
laid down.
` Even similar approach from PMO office was made in Commonwealth Games when
Mr. Kalmadi was given total authority without any review from time to time basis.
` It is surmised that the responsible persons associated including Prime Minister,
PMO, Ministry of Finance, Ministry of Law and Justice, TRAI were only onlookers
and helpless spectators. Actually they knowingly allowed happening of the Mega
Scam & loss of Lacs of Crores to the Country’s exchequer. These are the serious
concern about the system of various government departments and there is an
urgent need to fix responsibility and enforce accountability.

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` A Raja, sitting Union Cabinet Minister has been found to be directly
involved and tapes of his conversations with corporate middlemen are
available.
` The entire investigation being carried out by CBI has been scuttled to
protect vested political interests,
interests corporate and other middlemen involved.
involved
` The issue dates to 2008 when nine telecom companies were issued scarce
airwaves and licenses for second generation (2G) mobile phone services
at Rs1,658 crore (less that $350 million) for a pan-India operation.
` As many as 122 circle-wise licenses were issued and that by giving the
airwaves cheap,p that too in the controversial manner of first-cum-first-
served basis, the exchequer had lost billions of dollars. The cut-off date for
applications was also arbitrarily advanced.
` Later, based on the auction of airwaves for third generation (3G) services,
which got nearly $15 billion to the exchequer, and that for broadband
access, which fetched over $8.5 billion, the notional loss was estimated at
$38 billion to the exchequer.
$ q

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` But Prime Minister Manmohan Singh himself defended Raja's decision and
said that all that his communications minister had done was to implement a
policy already in place and none of the norms were flouted.
` However two examples on the 2G auction exposed the big lie..
` A new player, Swan Telecom, bought licenses for 13 circles with the
necessary spectrum for $340 million but managed to sell a 45-per cent stake
in the company to UAE's Etisalat for $900 million. This swelled its valuation
t $2 billion
to billi without
ith t a single
i l subscriber.
b ib
` Another new player, Unitech, paid $365 million as license fee but sold a 60-
per cent stake to Norway's Talenor for $1.36 billion, taking its valuation to
nearly $2 billion, again without a single subscriber.
` Similarly, another licensor, Datacom, later became Videocon Mobile and now
has large stake by Baharian Telecom. The other companies are Tata Tele,
Idea Cellular , Loop Telecom, Shyam Telelink and Spice.
` The Supreme Court had asked the solicitor general why the prime minister
had not responded to the representation by the opposition to sanction
proceedings against Raja.
` The final blow came after the Comptroller and Auditor General of India said
th entire
the ti process off spectrum
t allocation
ll ti was undertaken
d t k i an arbitrary
in bit
manner and that the advise of the industry watchdog was ignored and
misused.

Over 70% of 2G licence winners did not meet eligibility criteria: CAG
` The Comptroller
Th C t ll and d Auditor
A dit General
G l (CAG) has
h observed
b d that
th t more than
th
70% of the 122 second-generation (2G) telecom licences issued by former
telecom minister A Raja in 2008 were to companies that did not meet the
basic eligibility criteria.
` As many as 85 licences out of the 122 new licences issued to 13 companies
in 2008 were granted to those companies which did not satisfy the eligibility
conditions prescribed by the DoT.
` All 85 licences were given to companies which did not have the stipulated
paid-up capital at the time of application, the Comptroller Auditor General
(CAG) report highlights while detailing the ineligibility of applicants.
` Twelve companies that collectively won 85 licences, including Unitech, Loop
Telecom , Videocon and S Tel, Tel would not have got any licences had
department of telecommunications (DoT) followed its own rules set in 2005.

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` DoT had specified a broad set of eligibility conditions for companies to apply
for Unified Access Services (UAS) licences.
` The Ministryy had received a record number - 408 applications.
pp However, the
ministry through a press release pre-poned the cut off date to September 25,
2007 against the earlier deadline of October 1, 2007, allowing only 232
applications to qualify.
` The report stresses that the process followed by DoT while introducing
access to dual technology to the existing telecom operators lacked
transparency and fairness. Equal opportunity was denied to other similarly
placed operators who could apply for use of dual technology, only after the
formal announcement of the policy.
Cases of Favoritism
` The CAG report mentions that six new entrants — Unitech brand name
Uninor, Swan name changed to Etisalat, Allianz since merged with Etisalat,
Shipping Stop Dot Com name changed to Loop Telecom, Datacom name
changed to Videocon and S Tel — were required to roll out the services in
the 90 % service area in metros and 10% district headquarters (DHQ) in
other service areas within 12 months of the date of award of licences.
` The audit found that though these six new operators obtained the initial 4.4
p
Mhz spectrum in 81 service areas during g the p
period April
p 2008 to Januaryy
2009, none of them had rolled out their services as per the provisions of the
UAS licences in any service area till 31 December 2009.
` Further, DoT also failed to recover liquidated damages and penalty of Rs
679 crore from these operators for inordinate delay in rolling out their
services till 31 December 2009.

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Magnitude of the Scam
` The loss to the treasury is appx. Rs 1.76 lakh crore from sale of 2G
spectrum , as estimated by the CAG.
` It could have wiped out almost half of the Central government’s budgeted
fiscal deficit of Rs 3.81 lakh crore.
` The amount, would have helped reduce the Centre’s interest burden of Rs
249 lakh crore and fiscal stress on its finances.
` The amount is equivalent to the entire defence budget for 2010-11 and
almost one-sixth the size of the Union Budget.
` It is also more than thrice the Centre’s education budget of Rs 49,904
crore and is two-and-a-half times the Rs 70,000 crore loan waiver that
UPA-1 gave farmers.
` This amount would have given the country much needed schools, hospitals
, clean drinking water and better irrigation facilities.
facilities
` The amount seems staggering when compared to the Rs 1.5 lakh crore
capital expenditure set out in the 2010-11 Union Budget.
` It is nearly 50% more than the Centre’s total subsidy bill, including those on
food, fuel and fertilizer, which is budgeted at Rs 1.16 lakh crore and is
nearly seven times the health budget of Rs 25,154 crore.
Issues involved in the 2G Scam
` The modus operandi of the scam is an
open secret and the role played by
Department of Telecommunication
under Mr. Raja have been indicted by
the Central Vigilance Commission
(CVC), Central Bureau of Investigation
(CBI), Comptroller & Auditor General of
India (CAG), Directorate General of
Income Tax (DGIT) and the High Court
of Delhi on different occasions.
` CBI which is investigating the case
works, more or less, as a department of
the Central Government.
` Here it is investigating a case against
the corrupt policies and actions of the
Central Government. More over CBI
h
has a very badb d recordd in
i politically
liti ll
sensitive cases as is clear from the
adverse comments of this Hon'ble court
itself on different occasions.
` This is a case which is extremely politically sensitive and has caused huge
embarrassment to the Central Government. It also involved a sitting cabinet
minister who belongs to a political party which is supporting the Government
without which the Government cannot survive.
` And what is most intriguing is the stony silence maintained by the Prime
Minister on this issue. The PM was covering A Raja for over one year – Why
?? The Nation demands an answer…
Modus Operandi
p of the Scam..
` The Department of Telecommunications (DoT), under Mr. A Raja, then
Minister for Communications & IT, has given away scarce national resources
(spectrum) at throw away prices to private companies.
` In January 2008, the DoT had awarded 122 Universal Access Service (UAS)
licenses with spectrum on first-come-first-served (FCFS) basis at the rate of
R 1,658.57
Rs 1 658 57 crore per pan-India
I di UAS license
li which
hi h was the
th price
i discovered
di d
in the auction of spectrum in 2001.
` By 2008, the value of this
spectrum had multiplied
manifold. The Government
got a total of only Rs 9,014
crore as license fee from
these 122 licenses, which
was much lower than the
market price of the
spectrum. This has caused
an estimated loss of about
R 1,76,000
Rs 1 76 000 crore to t the
th
The modus operandi of the
scam was:

` Granting spectrum at 2001 prices when there was a nascent market rather
than at contemporary market prices in 2008 when there was huge demand
and the prices had increased almost 20 times.
times
` Inviting companies who were not in the telecom business to put in
applications for licenses for 2G spectrum.
` Resorting to the announcement of arbitrary cut-off date (01.10.2007) to
stop legitimate applicants from applying, thereby creating sellers (who were
not in the telecom business) and buyers (genuine telecom companies who
could not apply or were left out due to the manner in which cut-off date was
implemented).

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 ` Granting licenses on the basis of "first come first served" rather than through
a transparent public auction.
auction
` Changing the cut-off date illegally to award precious 2G spectrum only to a
handful of applicants (120 out of 575).
` Favoritism and manipulating multiple recommendations of the TRAI to
award licences to a favoured few companies.
` Further allowing these companies to sell equity or conduct private auctions
and garner large sums.
` Ignoring specific directions of the Law Ministry to seek the opinion of the
Empowered Group of Ministers (EGoM) on the matter.

2G versus 3G Auction – Comparison..

• Recently,
R tl the
th 3G spectrum
t was allocated
ll t d to
t
the telecom operators.
• The matter was referred to a GoM and a
transparent auction was held.
• The national exchequer was richer by a
pp g Rs. 1 lakh crores and no operator
whopping p
complained of any favoritism done to any
competitor and no one was claiming that any
public official made money.
• Exactly the opposite happened in the 2G
spectrum allocation in 2007-08 and the
exchequer was swindled by Rs 1,76,0001 76 000
crores and few, mostly unknown, companies
benefitted out of non-transparent deals.

RAJA’S BLATANT CORRUPTION

Secretary, DoT
• Secretary
S t D T D S Mathur
DoT, M th had
h d written
itt an internal
i t l note
t recommending
di that
th t
only legally tenable option would be to hold transparent auction. This was
rejected by A. Raja.
Finance Secretary
• Finance Secretary Dr. Subbarao wrote to DoT on 22.11.2009 questioning
the concept of first
first-come-first-served
come first served and sale at 2001 prices. His concerns
were dismissed by DoT.

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 Telecom Regulatory Authority of India (TRAI)
` Chairperson,
Ch i TRAI wrote
t 3 letters
l tt t DoT.
to D T He
H stated
t t d that
th t "It would
ld be
b unfair
f i
and misleading if any decision and consequent action is initiated without
identifying and implementing the linkages elsewhere in the
recommendation. It is reiterated that the authority should be formally
consulted if there is any deviation from the totality of the
recommendations."
` DoT under Mr. Raja not only ignored the letters, but selectively hand
hand-
picked from TRAI's recommendations, implementing different ones at
different times and modifying them suitably to suit some favored
companies.
` These actions are also ultra vires as per fifth proviso of Section 11 of TRAI
Act which states: “ If Central Government having considered that
recommendation of the Authority , comes to a prima facie conclusion that
suchh recommendation
d ti cannott be b accepted
t d or needs d modifications,
difi ti it shall,
h ll
refer the recommendations back to the Authority for its reconsideration.“
` However, in this case it never happened.

Law Ministry
• Law Minister HAD informed Mr. Raja
that the 2G matter deserved to be
placed in front of Empowered Group
of Ministers. Raja rejected this
specific direction by calling it "totally
out of context."
• Incidentally it is the EGoM that
decided the auctions for 3G spectrum
which has yielded about Rs. 60,000
crores.
Prime Minister
• Prime Minister (PMO) states that 2
letters were written to Raja on
02.11.2007. PM raised concerns
about first-come-first-served and
asked him to consider auctioning of
the scarce spectrum.
• But Raja wrote back to PM rejecting
his directions.

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` COMMON WEALTH Games or Game to loot Common Man’s Wealth ?
` After two months of damning and embarassing revelations of poor
hygiene, serious health risks and of unsafe buildings and infrastructure,
the Commonwealth Games ultimately got over, thankfully, without any
major mishaps and full credit goes to our athletes- who, inspite of having
to prepare in inferior training conditions and facilities, lifted their
performance and earned for themselves and for the country a record
number of over 100 medals.
` The Govt. of India and the Organising Committee tried to to desperately
bask in the glory of a jazzy Opening and Closing Ceremony – organised
by an Event Management company and costing the nation over hundreds
of crores, and the performance of our athletes, and declared the Games a
success.
` The BJP too wanted the games to be a success. That they should be the
best ever. BJP has always stood by our sportsmen. Remember it was Atal
Behari Vajpayee who insisted that the Games must come to India in 2003.
` But now the time has come to ask some serious questions over the
bunglings of the games.
` Even t he Supreme Court has remarked that it cannot shut its eyes on the
“rampant corruption”, The court has criticized the Indian government on
its preparations for the international sporting event.
` “In this country, payments are made without work being done. The newly
constructed bridge collapsed like a pack of cards,” the Bench said. “Rs
70,000 crore is involved. There is rampant corruption.
Kalmadi aides spill the beans to CBI
` Congress
g MP and Commonwealth Games Organising
g g Committee Chairman
Suresh Kalmadi seems to be in trouble. Former commonwealth games
officials TS Darbari and Sanjay Mohindroo, two of his trusted aides now
under CBI custody, are accusing him of being responsible for all financial
transactions.
` However, Kalmadi has till now maintained that he is not responsible for any
g y and scam in Commonwealth Games.
financial irregularity
` "I am ready to face any kind of probe," Kalmadi has been saying.
` The statement is bound to haunt the man who projected himself as the face
of the Commonwealth Games. With his handpicked aides - Darbari and
Mohindroo - now in CBI custody, the focus is shifting quickly towards
Kalmadi himself.
` It is learnt that during their questioning by the CBI so far both Darbari and
Mohindroo have claimed that all financial dealings in the Queens Baton
Relay or any other Commonwealth Games project was cleared with due
approval of Kalmadi himself.
` They also claimed that even the payment for setting up video screens in
Queens Baton Relay was released with the final permission of Kalmadi.
`
` The spotlight now may shift from the Suresh Kalmadi-led Organizing Committee
(OC) to the Sheila Dikshit government, with a tax probe into Commonwealth
Games (CWG) sleaze finding indications of payoffs to its officials from contractors
handling the Games projects.
` Scrutiny of the documents seized during the October 28 Income Tax (I-T ) raids on
Games vendors and contractors have thrown up evidence of a money trail leading
up to officials belonging to the Delhi government, NDMC and MCD along with those
from CPWD and DDA. DDA
` The payoffs are linked to contracts for supply of sports accessories and laying of
synthetic track surfaces, streetlighting , streetscaping, beautification and other
infrastructure projects.
` The seized documents reveal that some of the payments were made on a monthly
basis. In some other cases, payoffs turned weekly as the projects neared
completion and payments were released.
` Linkages of some important functionaries of the government may not be ruled out
with the taxmen suspecting benami ownership of some of the firms that had
bagged key Games projects.
` The direction of the probe may cause embarrassment to Delhi CM Sheila Dikshit ,
who had asserted in October that ‘‘ real corruption’’ was limited to projects worth Rs
1,600 handled byy the OC.
` While the second round of I-T raids focused on infrastructure projects executed by
agencies such as the Delhi government, MCD, NDMC, DDA and CPWD, during the
first raid a week before on October 19, the focus was on firms that had supplied
overlays to the OC.
` Its efforts to handpick projects for CAG audit may have landed the Delhi
government in a bigger soup.
` Delhi government sources say they have now been asked by CAG to furnish details
of all projects undertaken between 2005-06 to 2009-10 — a far cry from just the 25
projects that the chief secretary had suggested CAG should look into to finish their
probe on time. Audit officials, according to sources, have also asked for the project
paper of MCD’s controversial coffee home-cum-toilet project — in which public land
worth several hundred crores was handed over to a private agency for a period of
30 years — that the government had arbitrarily delinked from the Games
Games.

“There are different explanations as to why the Government

of India spent Rs.70,000 crore or more to host the
Commonwealth Games (CWG). To the cynical, it was an
incentive package for the country’s burgeoning, public
sector-driven ‘cash and carry’y economy. y To ppolitical
animals, it was aimed at boosting the prospects of Sheila
Dikshit, the Delhi Chief Minister”.
- Swapan Das Gupta , Journalist
 Commonwealth Games cost shoots up 17.5 times from
original estimate – cost Rs.70,000 crores

` When India won its bid for the 2010 Commonwealth Games 7 years ago, the
event instantlyy became an emblem of national p prestige.
g But an opportunity
pp y
to burnish its global image has instead become a national embarassment.
` The litany of problems plaguing the games – collapsed footbridges, filthy
dorms, cartoonish corruption – have not only made headlines around the
world. They have left Indians to wonder why a country so promising in so
many regards is incapable of organizing a signature event when the eyes of
the world are focused on it.
` The games have also been blighted by widespread allegations of bribery
and corruption with CBI and CVC stating in July that they had discovered
irregularities in contracts for 16 Commonwealth Games-related projects
including the athletes’ village swimming pool, training hall, and athletic track
among others.
` Cost of renovation of Nehru Stadium went up to Rs.961 crores. Cost of
recently constructed Nagpur Stadium – Rs.84 crores, Dharamsala Stadium –
Rs.48 crores, Indore Stadium – Rs.40 crores.

Commonwealth Games – Scams

` Smam Co – Sponsorship Scam – Rs.213 crores were set aside for Smam
Co. for Sponsorship deals. Irrespective of whether the sponsors come or
not the company shall get 15 to 23% commission. Following the uproar, the
contract was cancelled.
` OC spent Rs.26 crores for Kitchen equipment, Rs.670 crores for Tent
equipment
i – allll under
d the
h heading
h di off Overlays.
O l
` In July 2010 CBI and CVC stated that they had discovered irregularities in
contracts for 16 CWG related projects including – athletes village swimming
pool, training hall and athletic track among others.

CVC Report
` CVC found serious discrepancies,
discrepancies asked Govt.
Govt to initiate action.
action
` Directed CBI to register corruption cases against officials, contractors.
` Almost all the organizations executing works for Commonwealth Games
have considered inadmissible factors to jack up the reasonable price to
justify award of work at quoted rates citing urgent/emergent circumstances.
Despite higher rates , poor site management, delays and quality
compromises have been observed.
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 ` The recent reports of corruption in Commonwealth Games have adversely
affected the country’s image. The amount of funds spent on renovating
stadia for Commonwealth Games provide a prime facie evidence of large
scale corruption in the organization of Commonwealth Games.
` The figures available on the Commonwealth Games website reveals that the
cost of renovating the Jawaharlal Nehru stadium was Rs.961 crore; the
Indira Gandhi stadium Rs.669
Rs 669 crore; the Dhyan Chand hockey stadium
Rs.262 crore and the Karni Singh shooting ranges Rs.149 crore. A total sum
of Rs.44,459.48 crore was spent on renovations.
` The cost incurred in the renovation of Ferozeshah Kotla cricket stadium in
Delhi was Rs.85 crore. For the Lal Bahadur Shastri stadium in Hyderabad
was Rs.80 crore and construction of a new state-of-the-art stadium in
Nagpur cost Rs.84 crore.
` These huge amounts were spent on renovation and not for creating new
facilities. Unlike the Delhi cricket stadium that was built afresh, the Nehru
stadium was only renovated.

3 Senior CWG Officials Arrested - Queen’s Baton Relay

• Three senior Delhi Commonwealth Games officials have been arrested
over financial irregularities and the case has been handed to the
government’s financial anti-corruption watchdog.
• Joint Director Generals T.S. Darbari and M. Jeyachandran and Dy.
Director General Sanjay Mohindroo were suspended after a committee
submitted its report on alleged charges of corruption during last
year’s
year s Queen
Queen’s s Baton Relay launch in London and have been
subsequently arrested for their alleged role.
• An email from Mohindroo showed him dictating taxi rates to a vendor
in London who was hired to provide cars and other services during
the Queen’s Baton Relay function in London last year
• The vendor in question – Ashish Patel – and his firm, AM Cars – have a
dubious financial record. Instead of asking him for rates, Mohindroo
states what fares Patel should charge
charge. 450 pounds a day
day. Exorbitant
even when compared to hiring a BMW or Mercedes with a driver in
London.
• Darbari is ast the centre of a Customs case which accuses him of
illegally trying to import a ring worth nearly 20 lakhs from Dubai into
Kerala. He was also sent to Australia for the Queen’s Baton Relay
there.
 Emmar MGF gets Rs.700 crores bailout from DDA
• Govt of India
Govt. India, Urban Development Ministry
Ministry, Delhi Development Authority
(DDA) signed agreement with private corporate Emmar-MGF under PPP to
develop CWG Village. Under original agreement the Govt. was supposed to
get Rs.321 and 389 flats from Emmar-MGF
• In the name of urgency a big scam of more than hundreds of crores took
place amongst the Govt. authorities – Urban Development Ministry, Govt. of
India, Delhi State Govt. and Delhi Development Authority (DDA).
• In the name of Commonwealth Games,, the Congress g Govt. agreed
g to
purchase flats from this private company at the rate of Rs.11,000/- per sq.ft.
• The Controller & Auditor General of India in its report No.CA 23 of 2009-10
has passed strictures against this manipulation.

COMMONWEALTH GAMES VILLAGE PROJECT

MINISTRY OF URBAN DEVELOPMENT

EXTRACT OF ANSWER TO LOK SABHA
QUESTION NO 2155 OF 06.08.2010

DDA has signed an agreement with Emaar MGF for development of

Commonwealth Games Village under Private Partnership Participants (PPP)
mode. As per the agreement, DDA is to receive Rs.321 crore and share of 1/3
flats out of a total 1168 flats.

DDA had given financial assistance to Project Developer by way of purchasing

flats from the project Developer’s share. Since the project had come to a virtual
halt because of cash flow problems and serious difficulties were being faced by
the pproject
j developer
p in raising
g resources from the market as well as from
financial institutions because of economic recession and in view of the
requirement of timely completion of the project, it was decided that DDA may
purchase 333 under-construction flats from the project developer’s share.

An Inter-Agency Evaluation Committee was constituted by the Lt. Governor of

National Capital Territory of Delhi in order to work out a reasonable price for
purchasing of flats from Emmar
Emmar-MGFMGF. The Committee accordingly arrived at the
project cost per sq.ft. of plinth area. Based on inputs of Independent
Consultants engaged by the Committee and Financial Experts and after adding
the developer’s margin and cost of capital, the cost of completed flats was
worked out. On the basis of input of Price Evaluation Committee and
Negotiation Committee and considering the offer of project developer, it was
decided that DDA may go ahead with the purchase of flats at the rate of
Rs 11 000/ per sq.ft
Rs.11,000/- sq ft
` The Supreme Court remarked that it cannot shut its eyes on the “rampant
corruption”, The court criticized the Indian government on its preparations for
the international sporting event.
` The court cited the collapse of the new foot-over bridge near Jawaharlal
Nehru Stadium like a “pack of cards” as an example of the quality of the
infrastructure work done for the Games.
` “In
In this country, payments are made without work being done. The newly
constructed bridge collapsed like a pack of cards,” the Bench said. “Rs
70,000 crore is involved. There is rampant corruption.
` While the Central Vigilance Commission has raised 16 cases of corruption in
CWG preparations, the Enforcement Directorate is probing irregularities and
corruption in three cases of money transactions.
` The case handed over to the CBI is breathtaking in terms of brazenness: the
successful bidder who got the contract after quoting the lowest amount was
allegedly allowed to tamper with figures post-auction so that he could rake in
more money than he had initially hoped for.
` The number of works under the CVC scanner has now risen to 16 with
revenue implication of more than Rs 2,500 crore. Chances of fresh additions
to the "work
work load
load" are rated high.
high
` According to the CVC probe, the bid papers were tampered with and
changes were made in the bidding amount taking it closer to the nearest
rival so that profit margins could be increased.
• The budget for the CWG has undergone several revisions since India won
the bid for the Games in 2003. From an initial projection of Rs. 1,899 crore,
` estimates of the total cost of the Games now range from Rs. 30,000 to Rs.
70,000 crore.
• From Rs. 45.5 crore in 2005-06 to Rs. 2,883 crores in 2009-10
(RE),allocations for the Commonwealth Games have witnessed an
astounding 6,235% increase in the Union Budget.
` In the 2010
2010-11
11 Union Budget, the Commonwealth Games have been
allocated Rs. 2,069.52.
• The allocation for CWG projects in Delhi’s 2010-11 Budget is Rs. 2,105
crore.

` Its like Ganga dwaar pe aayi hain..sab log haath dholo..

Differing Budget Estimates
` g the event was given
At the bid for the CWG , the estimated cost for hosting g
as Rs, 1899 crore.
` In May-June 2006, it was reported that the cost of the Games had
escalated to Rs. 3,000 crore.
` In April 2007, the union Cabinet approves the Budget for CWG at Rs. 3566
crore.
` In July 2007,
2007 Union Minister for Youth Affairs and Sports,
Sports Mani Shankar
Aiyar, estimated the total cost of the Games to be Rs. 7,000 crore though he
also stated that not more than Rs. 2,000 crore should be spent on the
Games
` March 24, 2010 : CWG Director General, V. K. Verma, said on, that the
entire estimated cost of the Games was Rs. 10,000 crore.
` Now, the Ministry of Youth and Sports estimates it at Rs. 11,494 crore, Govt.
of Delhi estimate is at Rs.16560 crore totallying to Rs. 28054 crore.
` The Ministry of Tourism estimates the total cost at Rs. 87,000 crore.
1.
1 Why no Criminal Action has been taken so far against Prasar
Bharati CEO Shri B.S. Lalli for Rs.246 Cr. fraudulent contract to
SIS Live?
2. What are the connections of Mr. Kanishak Singh, a close aid of
Mr. Rahul Gandhi with the Emmar MGF Promotors and is
involved
o ed in CCWG G Village
age Sca
Scam?
3. Can you deny the fact that the provisiion of Rs.126 Cr. In the
plan budget of Ministry of Youth Affairs & Sports for OVERLAYS
in the year 2009-2010 was revised to 687 Crore – Manipulative
Contract ?
4. Your sports minister has admitted in Rajya Sabha that all cost
escalation in the CWG projects were approved by the Union
Cabinet. Isn’t it an admission of Criminal negligence on part of
the govt. which you are heading?
5. Who is responsible for approving an advance of Rs.1669.42 cr
to the Organising
g g Committee?
6. Whom will you blame for the dismal turnout for the CWG
events and the ticketing mess?
7. Your govt. claims to have initiated action against contractors,
officials and some firms connected with CWG projects. What
g
about action against the p
political masters who connived in the
CWG loot?
8. What about Rs.300 cr your govt. allocated to Delhi University
for CWG project which in turn handed it over to a pvt.
Construction co. What is the total cost of actual work done?
9. What is yyour response
p to irregularities
g and corruption
p cases
relating to cost escalations and manipulations in Queens Baton
Relay, SMAM scam etc.?
10. The Group of Ministers (GOM) held 48 meetings on CWG.
Cabinet discussed dozen times and sanctioned cost escalation
from Rs.1899 cr to Rs.70000 cr. Are you not responsible for
the CWG mess?

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 A tale of Deceit – How Govt.
Machinery was manipulated by
Congress Politician &
Bureaucrats and they insulted
K
Kargil
il War
W H Heroes.

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2
` The Adarsh Co operative Housing Society scam has exposed the corrupt nexus
Co-operative
amongst the politicians and the bureaucrats in order to grab prime land in Mumbai.
` The land scam is related to allotment of Land at Colaba that was in possession of
the Army and after the Kargil War, few army personnel started demanding the land
for the building of flats to "accommodate and reward the hero's of Kargil operation
and those who had laid down their lives for the protection of the motherland".
` The initial list of society members comprised of 40 members and included all the
defence personnel. Presently the list stands at 103 out of which only 37 members
belong to army and that too only 3 members are related to Kargil war.
` Few of the Bureaucrats & Ministers / Leaders who have fraudulently sneaked
themselves or their relatives (Benami) into the list of members and today own flats
are:

Ruling Congress Ministers / Leaders

• Ashok Chavan, Congress
• Vilasrao Deshmukh, Congress
• Sushil Kumar Shinde, Congress
• Kanhaiyalal Gidwani, Congress
• Babasaheb Kupekar, Congress Former
Speaker of Legislature
BUREAUCRATS
• Jairaj Phatak- Ex Municipal
Commissioner
• Ramanand Tiwari,- State Information
Commissioner
• Pradeep Vyas, Collector Mumbai
• Indris Kundan, Collector Mumbai
• Uttam Gobragade,
Gobragade BEST GM
• DK Sankaran, Ex-Chief Sect.
MaharashtraCS Sangitrao- Collector
• SC Deshmukh, Collector-Pune
Make me CM Maam. I am not
• Arun Pawar, Ex- Income Tax Comm. involved in this “Adarsh Scam”,
• PV Deshmukh,
D h kh Secretary
S t Urban
Ub just in some plain scams.
scams
Development

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The following concessions were given in lieu:
` The reservation of the plot modified from Transit Camp & a Parade Ground
to Residential Zone.
` A road of width 60 meters reduced to 19 meters.
` FSI of the adjoining Bus Depot given to the Adarsh Society.
` 15 % of the area allowed to used for commercial purpose rather than
residential.
` The income ceiling of Rs 12,500 per month waived off for army personnel
and politicians
` Construction started without obtaining environmental clearance.
` Occupation Certificate awarded even before the building was fully ready.

Adarsh Society’s Murky details

` Incomplete and fictitious details of members is held with the deputy
registrar’s office. Information sought on flat allottees was being deliberately
denied or inordinately delayed with malafied intent.
` Adarsh Cooperative Housing Society Ltd has acquired the plot of land
under highly suspicious circumstances
circumstances.
` The society has stated it has negotiated with local military authorities who
expressed their willingness to allow the society to go ahead with the project
if a certain amount of accommodation is also provided for army welfare.
` The total plot area where Adarsh Housing Society has been constructed is
40,000 square metre. The building has 104 flats of two sizes, 600 square
feet and 1,000
1 000 sq ft
ft.
` The capital value of each 600 sq ft apartment is estimated at around Rs 2.4
crore, while the capital value of 1,000 sq ft flat is Rs 4 crore.
` There are nine promoters of the society led by Congress leader
Kanhaiyalal Gidwani.
` The real tragedy
g y of Adarsh Scam
` The real tragedy in the Adarsh Housing Society scam in Mumbai is n that
land earmarked for a six-storey building of apartments for disabled
veterans, war widows and heroes of Kargil was used, in contravention of
zoning laws and environmental regulations, for a 31-storey luxury high-rise,
out of whose 103 apartments, only three went to families connected to the
g conflict,, and the remainder went to two retired armyy chiefs,, a former
Kargil
naval chief, four other army officers who went on to become generals,
relatives of ministers and top netas and babus.

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5
` The real tragedy is that it involves top officers of the defence establishment
who got themselves flats allotted in a building made on land purportedly
sanctioned in the name of Kargil widows and heroes.
` The real tragedy is that the 31-storeyed building could provide a potential
threat a vantage point over the navy’s air station, INS Shikra, just a kilometre
away aerially.
` The real tragedy is that the Chief Minister of Maharashtra, after first
brazening it out about his ‘distant relatives’ — his mother in law, among
others — and then offering to return the flats and resign.
` The real tragedy is that the Congress did not know who to replace him with
since almost all other big names in contention in Maharashtra Congress are
equally tainted.
` The real tragedy
g y is that the silence of the Prime Minister and the Congress
g
President is deafeningly loud and that their fabled ‘voice of conscience’ is
silent and that they are hiding behind the shield of ‘due process’ in sacking
the incumbent CM of Maharashtra, whose involvement in other bigger
scams has since come to light.
` The real tragedy is that after so many days, of scandalous after scandalous
g the headlines,, nobodyy believes that the g
details hitting guilty
y would ever be
brought to book or be meted out any justice — or even that there could be
an independent enquiry to bring out the truth.
` Which police officer indeed would lodge an FIR against the CM of
Maharashtra? Or powerful ministers and well-connected babus and
officers?
` Indeed, given the political rigor mortis in the present UPA,
Indeed UPA there seems to be
no effective systemic response available. Though CBI is said to be
investigating the case, nobody quite knows what it is investigating and
nobody frankly has any expectations from its “investigations”.
The Adarsh Case
` In the Adarsh case land was under uninterrupted and continuous possession
of the Army for over 40 years.
` The said plot was a garden known as ‘Khukri Eco Park’ with 135 grown up
trees and was under the management of local military authorities.
` The GOC M& G Area Maj. Gen. B A Cariappa inaugurated the said park on
27th October, 1996 on the Infantry Day.
` The park was surrounded by a wall constructed by the Military Engineering
Services and the same was adjacent and contiguous to other Army units
located in the Zone VI.

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` The said Eco Park continued to remain under control and management of
Army till 2004 where army personnel were detailed round the clock regularly
for g
guardingg it like anyy other armyy establishment.
` The land was abandoned by the Army to be allotted to Adarsh Co-operative
Housing Society by a conspiracy hatched by senior serving officers,
bureaucrats, politicians and officers of Defence Estate.
` The conspiracy was hatched in the year 2000 when Maj. Gen. A. R. Kumar
was the General Officer Commanding MG & G Area and Brig T. K. Kaul was
the Sub Area Commander.
Commander Brig T.T K.
K Kaul came back as GOC MG & G Area
in November 2002.
` Since the year 2000, each of the Generals Officer Commanding,
Maharashtra & Gujarat Area, Maj. Gen. A. R. Kumar, Maj. Gen. V. S. Yadav,
Maj. Gen. T. K. Kaul, Maj. Gen. Tejinder Singh, Maj. Gen. R. K. Hooda, have
become members of Adarsh Society for allotment of flat to them or their
relatives as if it was a pre
pre-requisite
requisite of the appointment of General Officer
Commanding, Maharashtra & Gujarat Area .
In return these General Officers remained silent on the conspiracy hatched
even at the risk of the security hazard posed by construction of 30 storey
building overlooking the sensitive defence area. Not only did they remain silent
on this issue but provided immunity and protection to the Society in continuing
their manipulation.
Security concerns
The 30 storeyed building constructed completely dominates the entire Army &
Navy area and sensitive installations like Tata Institute of Fundamental
Research. The building causes a security concerns of great magnitude in the
longer run.

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 Army-Politician nexus
` Not only has the Adarsh scam has
exposed Army-Politician nexus, it
has led to reveal crisis of
conscience in the ruling
dispensation.
` The nexus has not only
appropriated the flats from Adarsh
society twisting and turning all the
rules, it has nakedly grabbed
these flats from the widows and
family members of Kargil martyrs.
` What was meant for the war
widows and family members of
Kargil martyrs has been looted
from them by the ministers and
high ranking army personnels
themselves and shamelessly held
defying all ethics and values.
values
` The point to be noted is that 4
former Chief Ministers of
Maharashtra – Narayan Rane,
Vilasrao Deshmukh, Sushilkumar
Shinde and Ashok Chavan are
involved in the entire exercise.
exercise
• In UPA regime, there has been a continuous decline of values in politics
which is getting reflected in other sectors also.
• Today it has taken army also in its grip.
• If such is the situation the fate of India as a nation stands sealed.
• p
It exposes the vulnerabilityy of our armed forces.
• It is like medieval times when fort's gatemen were used to be bribed to
open the gates making way for enemy's army. Similar things can happen
now.
• Unless determined steps are taken to arrest the rising tide of corruption,
the safety and security of the nation will remain under threat.
• Adarsh society scam only shows that there is no adarsh left anymore.
anymore

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 Over 40 Crore Janata Below Poverty Line
Rs.58,000 Crore worth Foodgrains rot / wasted
every year due to lack of proper management.
Supreme Court orders Govt. to distribute this
FREE to the poor.
Govt. says – “NOT POSSIBLE” !!!

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2
` Basically,
Basically there should be no second opinion on the fundamental
issue of distributing food grains amongst the hungry-rather than
let them rot.
` But the insensitive UPA Govt. does not agree.
` Supreme Court directs the Govt. to distribute rotting food grains
free of cost to the poor.
` Prime Minister and Agriculture Minister disagree.
` Say it is not possible.
` PM asks Supreme Court not to interfere in ‘policy making’..???

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` When the Supreme Court pointed out that the best way to use the
rotting grains is to first feed the hungry, one fails to understand
how the question of policy comes in. It is impossible to
understand the language of our leaders.
` It is a matter of Life and Death.
` There can be no higher or nobler humanitarian ideal than this. Atal
Bihari Vajpayee always mentioned the word ‘Humane touch’ in
policy making.
` He sought to relieve the misery of his fellowmen, and also desired
to so identify himself with them and become a part of them so as
to undergo their suffering and, thereby, share their miserable
predicament.
` The recent Global Hunger Index (GHI) of 2009 ranks India,
India Asia's
third-largest economy, a low 65 out of the 84 countries in the Index
` India boasts of being the world's fourth-largest economy based on
Purchasing Power Parity (PPP). Yet, foodgrains enough to feed a
100 million rot each year.
` Let me close with what Mahakavi Subramania Bharati, the great
Tamil poet, said: “ Thani oru manithanukkunavilayenil jagathinai
Azhithiduvom”. It translates as: “If you deny food to even one
man, we will destroy the entire universe.”
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 THE MINISTRY OF FOOD PROCESSING INDUSTRIES HAS ADMITTED
IN LOKSABHA THAT WASTAGE OF AGRICULTURAL FOOD ITEMS IS
ESTIMATED TO BE RS. 58,000 CRORE ANNUALLY.
The answer was given in reply to a question asked in Loksabha on
wastage of Agricultural food Items.
It added that this was occurring at various stages of handling after
harvesting due to lack of adequate post-
post harvest infrastructure
infrastructure, lack of
cold chain facilities, transportation, proper storage facilities etc.

Extract of National Human Rights Commission’s Observation / Order on

Dr. Kirit Somaiya’s Petition on storage of Food Grains
(Case No.939/7/0/2010 dt. 6/12/2010)
1. The problem of Storage of covered storage exist.
2. Cover & Plinth (CAP): As of 1/7/2010, stock of wheat stored in CAP was
168.04 lac tonnes.
3. It is clear from the stands taken by the govt. of India & the FCIs that
there is a shortage of covered storage for food grains.
4 The Supreme Court is also being seized of the matter and the
4.
commission parts with this case with the hope that the Govt. of India
shall be spurred into action to address this perennial problem.

The case is closed.

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` The government has admitted to the empowered group of ministers (EGoM)
on food and prices that 61,000 tonnes of foodgrain had rotted in its granaries
as it was kept with poor protection for too long.
` The EGoM headed by finance minister Pranab Mukherjee was ascertaining
the status of overflowing stocks in Food Corporation of India godowns.
` FCI godowns in Haryana and Punjab were unable to protect or sell the 15.5
million tonnes of wheat lying in the open under tarpaulins.
MISMANAGEMENT OF FOOD GRAIN STORAGE & DISTRIBUTION
` Despite record stock of 680 lac tons of food grain,
grain more than 40% population
goes hungry
` 100 lac tons of food grain rot due to inadequate storage in the country
` Finance Minister, Mr. Pranab Mukherjee admitted huge quantity of food
grains got rotten due to lack of protection
` Food & Agriculture Minister,
Minister Mr.
Mr Sharad Pawar admitted that Rs.58,000
Rs 58 000
crores rotted due to lack of proper management
` India emerged leading exporter of food grains to poor African nations
through cartels
` Group of Ministers, Congress Govt. in April 2010 rejected the suggestion for
release of 50 lac tons to poorest districts
` Govt of India says Rs 58,000 crores food grains got rotten-wasted..
` Lacs of tonnes food grain get rotten (sad jata hai) every year in govt.
godowns
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` Poor people dying with hunger/ bhookh
` Saxena committee of GOI stated that 51% of BPL/ below poverty line people
do not have any ration cards
` Thousands of Farmers are committing suicide every year
` Congress Raj Farmers getting the least Common Man paying the most &
Poor struggling for Food
Scam of Rotten Food Grain
` 23 railway wagons with wheat bags took 440 days from Punjab to Bokaro
Dist. 57 tons got rotten. Railway & FCI stated to have disposed of the same
as waste
` Over 4 lac wheat bags stored in godowns in Sirsa Dist. of Haryana damaged
due to rain
` 10,000 tons wheat stored in the open in Kurukshetra got rotten due to rains.
` Tons of wheat damaged due to rain water in Karnal of
` Fungus-infected dal being distributed along with rice and wheat through PDS
` Over thousands of quintals of rice rotting in FCI godown in Gondia Dist. of
Maharashtra.

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Rotting foodgrains: House panel pulls up FCI
` A House panel pulled up the Food Corporation of India (FCI) and the
Government for letting a large quantity of foodgrains lying in open and letting
them rot, especially “in a country where incidents of hunger and malnutrition
are still reported.”
` In a report on food subsidy and its utilisation, tabled by the Chairman of the
Standing Committee on food, consumer affairs and public distribution, Mr
Vilas Muttemwar, in Parliament, the Committee criticised the “lackadaisical
manner of handling this issue by Government/FCI.”
Storage, transit losses
` Estimating the storage losses of foodgrains at Rs 228.39 crore and transit
losses another Rs 182.46 crore in 2009-10, the Committee said that due to
poor maintenance of godowns, a large quantity of valuable foodgrain is lost
every year. The
Th C Committee
itt did nott acceptt FCI'
FCI's alibi
libi th
thatt physical
h i l
verification of the depots with a capacity of 10,000 tonnes in a year and
depots with less than 10,000 tonnes capacity once in two years could not be
conducted due to the shortage of manpower.
` It said such physical verification is “very essential which should be
conducted frequently so that any damage to foodgrains from insects, rats,
moisture
i t could
ld b
be d
detected
t t d titimely.”
l ”

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Wastage of foodgrain a ‘crime’, says SC
` The Supreme
Th S C
Court hhas criticized
i i i d the
h govt. and d said
id that
h wastage off even a
single foodgrain in a poverty-ridden country is a “crime”.
` “In a country where people are starving, wastage of a single grain is a crime.
It has come out in official record that food stock is lying wasted,” a Bench of
Justices Dalveer Bhandari and Deepak Verma observed on how food stock
is lying “rotten” at government godowns without reaching the “poor and
needy”.
` A SC -appointed committee, set up to do a reality check on the Public
Distribution System (PDS) mechanism, had described it as “inefficient and
corrupt”, plagued by black marketing and unofficially run by a “vicious cartel
of bureaucrats, fair price shop owners and middlemen”.
` The committee headed by former SC judge Justice D P Wadhwa had in its
report to the apex court said the Rs 28,000-crore subsidy annually spent by
the government was pocketed by vested interests and suggested drastic
action to stem the rot.

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Rotten Foodgrains lying in the open at a
Haryana Warehouse

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Sirsa (Haryana): Haryana State Warehousing Corporation (HSWC) has
received the highest bid of 62 paise a kg for the rotten wheat lying in the
state government's warehouse at Bani village near here.
There were nearly 200,000 bags of wheat which got submerged in flood
water in July this year.
After the
Aft th quality
lit evaluation
l ti off the
th affected
ff t d wheat,
h t HSWC has h found
f d that
th t over
95,000 bags could not be even used for cattle or poultry feed. For this
category, HSWC has received the bid of 62 paise per kg.
"We had done our evaluation in August and found that over 95,000 bags
were of dumping category that means there was a quality degradation of
around 90 per cent. We have got the highest bid of around 62 paise per
kilogram for
f this rotten wheat," M.L. Verma, district manager off HSWC,
S C told
IANS Monday.
"During the July floods, wheat bags remained submerged in water for 20 to
25 days and now it is of no use for anyone. But we cannot dump it and it is
mandatory to follow a prescribed procedure therefore we had invited the
bids," a HSWC official told IANS, requesting not to be named.
"HSWC has to accept this bid as there is no other option available. Further
delay means more deterioration of the grains. The bidder would extract
around five to 10 per cent poultry feed, out these grains, and rest would be
used as manure," he pointed out.

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In the response of Dr.Kirit Somaiya’s RTI query, it was
informed by QC Lab of FCI that of the total samples
analyzed, 30% of Rice samples, 60% of Wheat samples &
100% of Paddy were found below Govt. acceptable norms.

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A Cup of ‘Cutting’ Tea costs Rs. 5/-.

Coffee costs Rs. 8/-.

Vadapav- common man’s burger costs Rs. 7/-.

Samosas costs Rs. 8/- per piece.

A single Banana costs Rs.

Rs 2.50/
2 50/-.

Onions are costing Rs. 44/- per Kg.

Ooff yeh Mahangai....

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` The prices of items of daily use like pulses, vegetables, sugar, cooking
gas, kerosene, petrol, diesel, electricity, water, and each and every item
have increased manifold severely eroding the household budget and
causing unmitigated burden on common people.
UPA’s assurances and its rank apathy:
` It may be recalled that during the Lok Sabha elections-2009, the election
manifesto and campaign premise of Congress
Congress-UPA
UPA was the promise that
“the prices of essential commodities shall be brought down in next 100
days”.
` It is dismaying to note that the handling of the economy by UPA
Government has been totally reckless. The Government does not appear
to be in control. There is no vision and thinking to control spiraling prices
of commodities of daily use by common people. It seems that the country
and the people have been left at the mercy of hoarders, speculation
traders and the market forces. The Government seems to be afflicted
with stupor while the common people are craving for some relief from this
unchecked spiral of prices.

5
7
` Prime Minister, Dr. Manmohan Singh was forced to take cognizance of the
hardships of common people due to inflation and price rise in his Press
Conference on 24th May, 2010 on completion of one year of UPA-II
Government. He admitted that –
` “Price rise is one of the major issues remained unresolved”. “Prices continue
to be a matter of deep concern. The Government attaches highest priority to
containing inflation so that there is no distress to the common man.
man.” “We
We
will continue to monitor the situation very carefully and take whatever
corrective steps are necessary to rein in inflation.”
` The Report Card of the UPA-II released by Mrs. Sonia Gandhi and Dr.
Manmohan Singh on 1st June, 2010 categorically states –
` “Prices have gone up. Food inflation is a major concern. The UPA-
Congress Govt.
Govt could not resolve the same
same”
` Hon Rashtrapati also in her Address to the Joint Session of Parliament in
February, 2010, given voice to the concerns of common people and the
middle classes and advised the Government to effectively intervene through
policy interventions and other measures to check the rise in prices of
commodities of daily use.
Hitti
Hitting Wh
Where It Hurts
H t The
Th Most:
M t
` It seems the motto of UPA has become “Garibi Badao”. Ever since the UPA
government has come to power, the number of people living below the
poverty line has increased phenomenally. There is a phenomenal rise in
poverty during the tenure of UPA-I & UPA-II. Number of poor has gone up
during Congress Regime. According to the Planning Commission’s –
N ti
National
l Sample
S l Survey
S – Below
B l P
Poverty
t Line
Li (BPL) population
l ti in
i rurall India
I di
was 28.3% in 2005.

5
8
` This rise in prices has broken the back of the poor and the middle class
people in the country. It is a matter of concern that the Government doesn't
even know the exact number of poor people in the country. According to
the Planning Commission, there are 28%. According to N.C. Saxena
Committee of the Rural Development Ministry, 50% people of the country
are below the poverty line on the basis of calorie intake. According to Arjun
p Committee constituted for unorganized
Sen Gupta g sector,, 77% p
people
p of
the country make their sustenance on Rs. 20 daily. According the
Tendulkar Committee report 37.2% people live below poverty line. The
Planning Commission has put the BPL population as 31 crore in its 2005
report. The Tendulkar committee put this figure 42 crore in December,
2009. The daily income of such people is lesser than Rs. 20. The anti-
people policies of the Congress Party and the UPA Government are
responsible for this mess. The uncontrolled price rise has snatched the
food away from the mouths of the children of these families.
` Shri Sharad Pawar, Minister of Agriculture, Food and Consumer Affairs
stated that such a loss is due to lack of management. While Lacs of
tonnes of food grains rot every year in government godowns, poor people
are dying of hunger and malnutrition. Saxena Committee of GOI stated
that 51% of BPL people do not have any ration cards. In Congress-UPA
regime, farmers are getting the least though the common man is paying
the most and the common people, the poor and the downtrodden are
struggling for food

Retail Price
Commodities Dec. 2008 Dec. 2010
Onion 20 44
Potato 10 17
Lasoon 100 210
Vanaspati 70 90
Tur Dal 80 95
Mug Dal 75 100
Tea Powder 220 310
Milk Per Ltr 20 36
Diesel Per Ltr 37.89 42.07
PetrolPer Ltr 50.21 57.37
5
9
6
0
` In spite of huge production and massive buffer stock, stock the prices of food
grains have gone up rapidly. BJP finds it baffling and the nation is unable to
understand the reason for not releasing the available buffer stock into the
market or distributing it through the public distribution system in spite of
buffer stocks to ease the pressure on prices? This epitomizes the sheer
scale of negligence and gross mismanagement of food economy by the UPA
Government. On the one hand, it continues to shed tears for uplifting and
welfare of common people, at the same time, it cruelly connives with
profiteers to create an artificial scarcity of commodities to push the prices up.
Hike in prices of petroleum products:
` BJP feels that the wrong economic policies of the UPA Government are
making the life of common man difficult. In last one year, Congress
Government has hiked the petroleum prices thrice.
thrice Prices of kerosene,
kerosene
CNG, etc. and these have been raised by the Government by 33-46%.
PRICES OF PETROLEUM PRODUCTS
Products Price in April, Price in July, % increase in
2009 (in Rs) 2010 (in Rs.) last one year
Petrol 44.55 60.55 38
Diesel 34.45 41.98 20
Kerosene 9.05 12.27 33
CNG 21.70 31.47 46
Cooking Gas 312.05 348.45 11
(LPG)
Note: Petroleum products price differs from State to State due to SST/VAT.

6
1
` It is the Congress which had given a commitment to ensure stability of
petroleum prices. Sudden sharp increase of 11 to 46% in the prices of
petroleum products, which has direct impact on the day-to-day life of
common man, hash pushedh d the
th inflation/price
i fl ti / i risei further.
f th It is
i an ill-thought
ill th ht
move and it appears that the consequence of such steep hike in petroleum
prices had not been assessed while announcing the hike. This has further
made the efforts to curb prices difficult and such type of indirect taxes affect
the common man directly.
Commodity Exchanges – Dens of Speculation:
` Along with wrong economic policies, taxing common man directly through
indirect taxes, speculation and manipulation in essential commodities at
Commodity Exchange has played a major role in food inflation.
` There are around 22 to 23 Commodity Exchanges in India. Of these,
National Commodity & Derivative Exchange (NCDEX) and Multi Commodity
g ((MCX)) are the major
Exchange j Exchanges.
g
` Essential, i.e. Agricultural Commodities are mainly traded at Commodity
Exchange (NCDEX). In 2009, out of Rs.10.84,224 crores turnover at
NCDEX, delivery was 0.33%, i.e. Rs.3,591 crores. Artificial turnover pushes
up the prices of food grains/items.

Total Turnover Speculation Actual Delivery

Amount % Amount % Amount %
Rs. Crores Rs. Crores Rs. Crores
10,88,224 100 10,84,633 99.67 3,591 0.33

` Government of India is asking

g State Governments to take necessaryy steps p
under the Essential Commodities Act to curb price rise. In contradiction, it is
encouraging speculative, manipulative tendencies by pushing/allowing
future/forwarding trading in essential commodities at the Commodity
Exchanges. The above figures clearly state that 99.67% transactions in
agriculture/essential commodities are speculative. It pushes the prices
upwards. Essential commodities have been shifted to future trading since
2004 (later half).
` Recognizing the gravity of the situation, the unmitigated sufferings and
hardships of the common people, the farmers, the middle classes and the
workers and the utter neglect, insensitivity and indifference shown by the
Congress Party and the UPA government by turning a blind eye and a deaf
ear towards the voices of the people, the BJP has been spearheading the
agitation against rising prices to draw the attention of the Government to this
issue and to urge it to shed its attitude of inaction and drift and take firm
steps to mitigate the situation.

6
2
 Month Actual Delivery Speculation Total
Turnover
Amount % Amount % Rs. In crores
Rs. In Rs. In crores
crores

January 634 1.35 46161 98.64 46795

February 147 0.35 41593 99.64 41740

March 128 0.31 40931 99.68 41059

April 115 0.17 65007 99.70 65202

Mayy 125 0.27 50907 99.75 51032

June 108 0.16 45882 99.76 45990

July 72 0.23 73010 99.90 73082

A
August 99 0 10
0.10 93113 99 89
99.89 93212

September 217 0.36 59211 99.63 59428

October 165 0.21 76110 99.78 76275

November 175 0.16 105697 99.83 105872

December 258 0.24 103897 99.75 104155

TOTAL 2243 0.28 801519 99.71 803842

 GOVERNMENT OF INDIA
MINISTRY OF CONSUMER AFFAIRS, FOOD AND PUBLIC DISTRIBUTION
LOK SABHA STARRED QUESTION NO70
RISE IN PRICES OF ESSENTIAL COMMODITIES
ANSWER
MINISTER OF AGRICULTURE AND MINISTER OF CONSUMER AFFAIRS, FOOD
AND PUBLIC DISTRIBUTION (SHRI SHARAD PAWAR)

(a) to (f): A Statement is laid on the Table of the House.

STATEMENT REFERRED IN REPLY TO PART (a) TO (F) OF LOKSABHA STARRED

QUESTION NO.70 FOR 24-11-2009 REGARDING RISE IN PRICES OF ESSENTIAL
COMMODITIES.

(a) & (b) Government is aware of increasing trend in prices of essential commodities
and has taken series of steps to check the increase in prices by taking effective
measures such as augmenting domestic supplies of rice, wheat, pulses and edible oils
through imports at zero/reduced rates of duty and ban on exports. All these measures
have had a moderating influence on the rise in prices of essential commodities.

Over the year, rise in price of pulses, sugar, are witnessed mainly due to inadequate
supplies in relation to demand. Vegetable prices tend to fluctuate depending on the
availability and seasonal factors.

(c) and (d) The Government has taken a number of steps to control the price rise and
to soften the impact of price rise on consumers. Government measures are given in
Annexure I.
1. Fiscal Measures
(i) Reduced import duties to zero - for sugar, rice, wheat, pulses, edible oils (crude)
and maize
(ii) Allowed import of raw sugar at zero duty under O.G.L upto 1.8.2009 by sugar mills
(notified on 17.4.2009)
(iii) Allowed, import, of white/refined sugar by STC/MMTC/PEC and NAFED up to 1
million tons by 01.08.2009
01 08 2009 under O.G.L.
O G L at zero duty
2. Administrative Measures
(iv) Banned export of non-basmati rice, edible oils and pulses (except kabuli chana).
(v) Effected no changes in Tariff Rate Values of edible oils;
(vi) Imposed stock limit orders in the case of paddy, rice, pulses, sugar, edible oils and
edible oilseeds upto 31.9.20ID;
(vii) Using Minimum Export Price (MEP) to regulate exports of onion
( iii) 30 lakh
(viii) l kh tonnes
t off tonnes
t off rice
i isi estimated
ti t d for
f release
l under
d OMSS (D) scheme h

6
4
6
5
The scam took place when millions went hungry.
Congress talks about the Aam Aadmi,
then exploits him.

6
6
Background of the Scam
` Lastt year, on July
L J l 30,
30 Parliament
P li t erupted
t d in
i a furore
f over the
th revelation
l ti that
th t
despite a strict ban on exports, tonnes of 25 per cent broken, non-Basmati
rice were sold to African nations by UPA-I.
` Then newly appointed Commerce Minister, Anand Sharma, had promised
to inquire into the scam. “This matter is being looked into. Inquiries will be
held; responsibility will be fixed and remedial action shall be taken,” Sharma
had stated in response to a calling attention motion in the Lok Sabha.
A Sham Inquiry
` The inquiry was conducted by P.K. Chaudhary, a 1977-batch IAS officer of
who joined the commerce ministry as an additional secretary on May 27,
2008, and served a year under then minister Kamal Nath.
` On Chaudhary
O Ch dh f ll the
fell th onerous task
t k off inquiring
i i i into
i t the
th acts
t off commission
i i
and omission of various participants in the elaborate scam, including the
Union minister Kamalnath himself.
` The inquiry’s terms of reference were not made public, but what is known is
that Chaudhary never got access to any of the principal characters who had
already moved out of the ministry of commerce and industry.
` Kamal Nath had moved away to the Union ministry of surface transport, the
then commerce secretary G.K. Pillai had moved as the Union home
secretary and the man directly in charge of the division dealing with the
exports, R. Gopalan, was now the secretary (financial services) in the Union
ministry of finance.
` The inquiry report has recommended action against the private export
companies, led by Amira Foods (I) Pvt Ltd, by “black-listing” them.
` But the fact is that while the scam can easily attract the provisions of the
Prevention of Corruption Act, the case has already been diluted
considerably.
` Ample time has been given to the private players to wipe out evidence and
bank accounts, while a more neutral investigation agency like the Central
Vigilance Commission (CVC) or the CBI has never been involved in the
inquiry.
Stumped Out …
` A May 2009 noting in the files of the Directorate General of Foreign Trade
(DGFT): “From
From Commerce,
Commerce before notification is issued,
issued CIM (minister of
commerce and industry) needs to decide as to which country is to be
allocated to which PSU (public sector undertaking) for export”

6
7
6
8
` The rice scam is a case where a lot of documentary evidence is already
available
` From RTI inquiries and Commerce ministry file notings its very clear that
Kamal Nath personally took the decisions on which PSU would handle a
country’s allotted share of rice: see file noting on previous page_ “...before
notification is issued Commerce and Industry Minister (Kamal Nath) needs to
decide as to which country is to be allocated to which PSU for export.
export ”
` Clearly, Kamal Nath knew about the involvement of private companies and
also took the decisions on allocation of the exports. There are also letters
from various African countries such as Sierra Leone which have been
addressed to Kamal Nath, stating that the rice exports be directed through
private companies such as Amira Foods (I) Ltd.
` This despite the fact that the norms for such exports are absolutely clear that
they could only be undertaken by one of three PSUs—STC, MMTC or PEC.
` File notings available through RTIs also record a telephone call from then
commerce secretary G.K. Pillai to a joint secretary in the food ministry
stating that a notification to export rice was being pushed through. Such
notifications could be issued onlyy after mandatoryy clearance from the food
ministry, but this was ignored and the notification issued.
` Documents show there was very little rice for the PDS in that period. File
notings and notes of the food ministry officials repeatedly warned there was
no rice left to export and barely enough to supply the PDS meant for below
poverty line families.
` While letters
Whil l tt f
from states
t t seeking
ki more rice i piled
il d up, the
th commerce ministry
i i t
ignored them. Instead, not only did they export a banned essential
commodity, they allowed private firms to come in and make a killing.

6
9
History….
` The government had banned export of non-basmati rice in the wake of
escalating prices in the domestic market
market. However
However, on diplomatic grounds
grounds, it
allowed export of limited quantity to some African and the least developed
countries.
` But the predetermined terms of contracts between foreign buyers and
domestic suppliers (with small margins for the PSUs) led to hugely
disproportionate profits accruing to private parties, namely the foreign
government nominated domestic suppliers in India
India.
` The lack of due diligence on the part of officials resulted in a "denial of the
legitimate profits of the PSUs.
` An enquiry was then ordered following questions on the integrity of the
process of relaxation of export ban on diplomatic grounds.
` STC, MMTC and PEC are the three PSUs which take up the job of export-
STC export
import on behalf of the government.

7
0
Everything is Golmaal..
` And now, admitting to irregularities in the export of non-basmati rice to some
African countries during UPA-I tenure, the government says it has referred
the matter to the CVC after slapping show-cause notices on officials of
PSUs, involved in the transactions.
` Documents proved that PSUs were to be exporters only for record sake and
operated on a meager trading margin ranging between 1 per cent and 1.5
per cent.
` Though the government had authorized the release of 1.35 million tonnes,
the actual quantity exported was only about 122,000 tonnes.
` The commodity was exported to Comoros, Ghana, Madagascar, Mauritius
and Sierra Leone.
` Losses to Indian PSU, Profits to Pvt. Players
` STC had pointed out that private players
had muscled into a deal meant to be
strictly between governments and PSUs.
` MMTC suffered a major financial loss.
They proposed to export the rice to the
U i
Union off Comoros
C f $495 per tonne
for t
with a profit margin of $20 per tonne.
Comoros turned it down stating it was
too expensive and they couldn’t afford it.
` A month later, MMTC received an
already signed agreement where private
players
l were the
h exporters and
d Comoros
C
willing to buy the same quantity of rice at
$640 a tonne!
` Within a month, not only was MMTC’s
offer of $495 a tonne no longer
expensive, Comoros was, in fact, willing
to pay $145 more per tonne.
` MMTC, which would have earned a profit
of $20 per tonne was now reduced to
being a marginal player and would only
get $5 per tonne.

7
1
While
h l lakhs
l kh off people
l are dying
d off hunger,
h
Congress Politicians siphoned of Govt.
money worth 1000 crores by making false &
fraudulent subsidy bills and manipulating
the Public Distribution System

7
2
What is PDS?
` Public Distribution System in short PDS means distribution of essential
commodities to a large number of people through a network of fair price
shops (FPS) on a recurring basis. The commodities are as follows:-
◦ Wheat
◦ Rice
◦ Sugar
◦ Kerosene
` PDS evolved as a major instrument of the Government’s economic policy for
ensuring availability of food grains to the public at affordable prices as well
as for enhancing the food security for the poor.
` It is an important constituent of the strategy for poverty eradication and is
intended to serve as a safetyf net for
f the poor who number more than 330
million and are nutritionally at risk.
` PDS with a network of about 4.99 lakh fair price shops is perhaps the largest
distribution network of its type in the world.
` PDS is operated with the joint responsibility of the Central and the State
Governments The Central Government looks after the procurement,
Governments. procurement
storage, transportation and bulk allocation of food grains, etc.
` The responsibility for distributing the same to the consumers through the
network of FPS rests with the State Governments. The State’s
responsibilities include allocation within the State, identification of families
below poverty line, issue of ration cards, supervision and monitoring the
functioning of FPSs.
FPSs
` Over the years, PDS have become an important part of Government’s policy
for management of food economy in the country.
` But recently it has been revealed that the PDS cases were manipulated
causing huge forgery and fraud that took place in Arunachal between 1995
and 2004.
` It has revealed a glaring lacunae in implementation of the public distribution
system and rationing system in the state where the former Arunachal
Pradesh Chief Minister Gegong Apang has been accused of helping
embezzle billions of rupees of public funds while he was in power.
` His name figures along with a list of 40 accused persons, which the Special
Investigation Cell probing the scam submitted to the Guwahati High Court .

7
3
PDS a lesson in corruption
` The public distribution system (PDS) scandal came to light way back in
October 2004 when Bamang Anthony (Tago), President of Arunachal
Citizens’ Rights (ACR) and public leader Domin Loya decided to file a PIL in
Citizens
the Guwahati High Court regarding certain anomalies that he had found in
the PDS in Arunachal Pradesh.
` Arunachal Pradesh and five other hill states of the North East get two types
of reimbursements from the government of India for transportation of food
grains under the PDS.
` While the first is reimbursement of Road Transport Charges (RTC) for lifting
of food grains from the nearest railhead of FCI depots to the base depots, depots
the second is called Hill Transport Subsidy (HTS) for moving the stock from
the base depots to the approved principal distribution centers.
` Interestingly, initial complaints were only regarding suspected large-scale
irregularities in the distribution of food grains in the state.
` However a special audit conducted by FCI found out, an “excess payment”
of Rs 193.53 crore in just one year (2003-04).
` The HTS alone for three particular years in which misappropriation was
suspected was as follows: Rs 24.27 crore in 2001-02, Rs 75.03 crore in
2002-03, and Rs 279.64 crore in 2003-04.
` However, what is even more interesting is that while on one hand the
quantity of food grains ‘supplied’ to the people of Arunachal Pradesh under
PDS increased (from 54,765 MT in 2001-02 to 85,272 MT) and the
reimbursement of HTS also increased, several instances also came to light g
where the supply records were grossly fraud and fictitious.
` One such instance, was the supply of salt under PDS in Damin, a revenue
circle in Kurung Kumey district. As per the 2001 census, the circle had a
population of 2,784, and records showed that every individual consumed at
least 24 kg of iodized salt per month in 2004.
` Another instance: In Koloriang circle in the same district, roughly 4,800
persons
pe so s were
e e sshown
o as having
a g co consumed
su ed 3,080 qu quintals
aso of rice
ce e
every
e y month
o
in 2004, which comes to 64 kg per person per month.

7
4
Anomalies in the public distribution system (PDS) in Assam may turn out to
be a massive scandal involving hundreds of crores of rupees. Preliminary
reports indicate that the amount of rice involved in the scam stood anywhere
between 19 and 20 lakh tonnes.
While state chief secretary PC Sarma has already ordered a probe into the
anomalies in all the 27 districts,
districts the Centre,
Centre too,
too has sought a detailed report
from the Assam Government. Sources said over 700 cases had already been
registered in different districts concerning PDS irregularities in the past one
year while 37 persons had been arrested in this connection.
The scam came to light in October last year after an NGO filed a series of
RTI applications in the upper Assam districts of Golaghat, Jorhat and
Sivasagar compelling the state Government to first order a probe into the
Sivasagar,
PDS in those three districts in December. This month, the chief secretary
expanded the scope of the probe by extending it to all the 27 districts of the
state.
Interestingly, Krishak Mukti Sangram Samiti (KMSS), the NGO, which has
spearheaded this RTI movement against anomalies in the PDS, was
conferred
f d the
th Manjunath
M j th Shanmugam
Sh I t it Award
Integrity A d in
i the
th national
ti l capital
it l
last week. The NGO found out that in Golaghat district alone, over 10,000
quintals of rice meant for distribution under PDS had not reached the
beneficiaries and instead found its way to the open market.
Reports from Nagaon district said over 13,000 tonnes of rice meant for
distribution through the PDS in the district had gone missing in the recent
months with sources in the Bureau of Investigation into Economic Offences
suspecting that this huge quantity had found its way to the open market. This
huge quantity of rice also includes rice meant for distribution under various
schemes including Annapurna and Antyodaya meant to benefit people living
below the poverty line.
It was only in February that over 400 quintals of rice released from an FCI
godown in Guwahati for distribution through PDS and other BPL schemes in
Baska district in lower Assam were finally found in a private businessman’s
godown elsewhere in the city. On March 12, police seized two truckloads of
rice meant for distribution among people under Sonapur block near
Guwahati.

7
5
 Former Arunachal Pradesh Chief Minister
remanded to 7 days in police custody

Gegong Apang arrested in Rs. 1,000-crore PDS scam

Former Arunachal Pradesh Chief Minister and senior Congress leader Gegong Apang
was on Tuesday arrested by sleuths of a Special Investigation Cell (SIC) probing the
Rs. 1000-crore scam in Public Distribution System (PDS) in Arunachal Pradesh.
Mr. Apang was arrested outside the SIC office and later produced before a court of
Special Judge at Lakhimpur in Assam.
Assam
The court remanded him to seven days in police custody.
Mr. Apang has been booked under Sections 120b (criminal conspiracy), 420
(cheating), 468 (forgery), 409 (criminal breach of trust) of IPC read with B-2 of the
Prevention of Corruption Act. “We have documentary materials and oral evidences
given by co-accused of his involvement in the PDS scam of siphoning government
money by making false and fraudulent subsidy bills. The scam caused about Rs.
1,000 crore loss to the government off India,” SICS C investigating Officer
Off M.S.
S Chauhan
C
told The Hindu.
Apang denies role
While speaking to journalists outside the court premise, Mr. Apang, who is credited to
be second longest serving Chief Minister after former West Bengal Chief Minister
Jyoti Basu, pleaded innocence and alleged that it was “a political conspiracy to
g
tarnish” his “good image.”
g He denied his involvement in the scam and demanded a
probe by the Central Bureau of Investigation into it.
50 named as accused
Mr Chauhan said over 50 people, including Mr. Apang, have been named as accused
in charge sheets filed before the Gauhati High Court by the SIC in altogether eight
cases probed by it pertaining to the scam.
So far, more than 30 of the accused have been arrested while some of them availed
anticipatory bails.
The SIC was constituted at the directive of the Gauhati High Court following a public
interest litigation filed in 2004 seeking a thorough probe into the PDS scam.

7
6
 Officials of private finance companies
were bribing senior officials of public
sector banks and financial institutions for
facilitating large scale corporate loans.
Housing Loan Scam: CBI Arrests Top Banking Officials
` The season of scams shows no signs of tapering off. The latest one involves
officials
ffi i l att LIC H
Housing
i FiFinance, B
Bankk off IIndia
di and
d severall other
th b banks
k
taking bribes for doling out multi-crore loans to real estate companies.
` Assuming that creditworthy projects would have been financed anyway,
there is a strong possibility that some of the lending facilitated by bribes may
have been risky.
` A major cross
cross-country
country housing loan racket involving top officials of public
and private sector financial institutions was busted by the CBI which arrested
LIC Housing Finance CEO and seven others on charges of corruption and
criminal conspiracy.
` Apart from the LIC HF CEO Ramchandra Nair, those arrested are Naresh K
Chopra, Secretary (Investment) LIC, R N Tayal, General Manager of Bank of
India (Delhi)
(Delhi), Maninder Singh Johar,
Johar Director of Central Bank of India
India,
Venkoba Gujjal, Deputy GM of Punjab National Bank (Delhi).
` Rajesh Sharma, Chairman and Managing Director of Mumbai-based Money
Matters Ltd and two of its employees -- Suresh Gattani and Sanjay Sharma--
were also arrested.
` The officials allegedly colluded with Money Matters to sanction large scale
corporate loans, overriding mandatory conditions for such approvals along
with other irregularities. They were also gathering confidential business
information from financial institutions.

7
8
What is the Scam
` These are the biggest and most high-profile arrests since the Unit Trust of
India corruption scandal a decade ago and the 1992 securities scam.
` Officers of top management and middle management of various public
sector banks and financial institutions were receiving bribes from private
financial services company who were acting as mediators and facilitators for
corporate loans and other facilities from financial institutions.
` The arrests come at a time the government is on the defensive and is
accused of condoning a culture of loot.
Biggest Corruption scam
` This is the biggest corruption investigation involving officials of state-owned
banks since the Unit Trust of India was investigated in 2001 for favoring
brokers in the Ketan Parekh scandal.
g
The Central Bureau of Investigation ((CBI)) has arrested eight
g finance executives,
including the chief of LIC Housing Finance, accusing them of taking bribes to
give big corporate loans and sending shockwaves through stock and property
markets at a time when the government is buffeted by a series of high-profile
scandals.
Reason for the scam
` Let’s
Let s look at the underlying reality.
reality
` There’s no doubt real estate prices have been soaring.
` Given the huge gap between supply and demand for middle-class housing in
the country, instead of catering to the differentiated needs of a vast segment
of the middle class, developers have been focusing at the high end of the
market, keeping prices well beyond the reach of potential clients.
` In the last two years, due to the impact of recession, banks had reduced
interest rates and offered teaser loans to encourage people to buy property.
But while such loans played a part in reviving the property market, the
suspicion remains that prices in many metros are being rigged up by
builders.
` As property prices continued to soar beyond the reach of the middle class,
class
purchases dwindled and builders needed cash from banks to improve
liquidity.
` For lenders who saw a slowdown in retail loans, giving out bulk loans to
builders was an easier option to grow business.
` This is where the bribery scandal may have played a facilitating role in
bringing big lenders and builders together.
` One hopes that most of these loans are recoverable and not siphoned off by
rapacious builders. But either way the government should ensure a thorough
investigation and send the crooks to jail. 7
9
` The ongoing investigation of LIC Housing Finance and some public sector
banks is set to impact realty companies, which are already facing a crisis of
confidence among institutional investors.
` The development will adversely impact their ability to raise resources either
through debt or equity.
equity Given their market performance this fiscal,
fiscal realty
stocks are finding few buyers.
` On top of this, a whopping repayment of Rs 25,000-crore debt to public and
private sector banks is staring at their faces, as per industry estimates.
` Investors must be careful as most of the proposed equity issues are aimed
to repay debt.
` Realty stocks across the globe have been blacklisted after the financial
turmoil of 2008. In India, they have remained under pressure for the last two
years and naturally after this scam, banks will be extra careful about lending.
Realty under pressure..
` There are at least six firms that have got the market regulator’s approval to
launch their initial public offers (IPO) to raise Rs 9,841.16 crore. Many realty
firms such as Emaar MGF , Lodha Developers and Ambience are in queue
to hit the market.
` Vatika Group had planned to raise up to Rs 1,000 crore from an IPO by
selling around 20% earlier this year. It has now postponed its plan to
December next year.
y
` Three of the six realty firms — DB Realty, Jaypee Infratech and Nitesh
Estates — that had entered the market to mop up Rs 4,167 crore in the
current fiscal are currently trading at a discount of 26-50%.
` The other three companies — Oberoi Realty , Ashoka Buildcon and Prestige
Estates that mobilised Rs 2,500 crore — are trading marginally below their
offer price.
price
` Banks are estimated to have outstanding loans of Rs 75,000 crore to the
real estate sector, of which Rs 25,000 crore will have to be repaid by March
2011.
8
0
The Supreme Court has criticized the Centre for
appointing Telecom Secretary P.J. Thomas as Chief
Vigilance Commissioner (CVC) despite the
pendency of a chargesheet against him in a criminal
case.

The apex court said: "How can the CVC function

effectively when there is a chargesheet pending
against him in a criminal case? At every stage
someone will raise objection that he is an accused
in a criminal case.”

8
1
` There is a lot of controversy over the decision of the Central Govt. to appoint
Mr. P J Thomas as the CVC.
` The CVC, who has been chargesheeted in Kerala's palmolein import scam
case, was allegedly handpicked for the post by the PM and home minister P.
Chidambaram on September 4, 2010, overruling objections by the Leader of
Opposition in the Lok Sabha Sushma Swaraj. - who was the third member
on the committee for selection of the CVC.
` Thomas was handpicked by the government despite his alleged dubious
past.
` NGO’s Centre for Public Interest Litigation (CPIL) and Common Cause as
well as former chief election commissioner (CEC) J. M. Lyngdoh had
challenged the appointment in two separate PILs before
f the apex court.
` The petitioners alleged that Thomas -- who had been chargesheeted in
Kerala's palm oil import scam case -- had been picked up by the government
to save it from further embarrassment over the alleged multi-crore 2G
spectrum licence allotment scam and the Commonwealth Games scams.
` Pointing out that the 2G scam was being
probed by the CBI, advocate Prashant
Bhushan, appearing for CPIL, said there was a
clear conflict of interest because as CVC he
had control over anti-corruption work being
carried out by the CBI.
` Though the government claimed there was no
case against Thomas, a reply to an RTI query
had revealed that he was an accused in the
palm oil scam.
` Besides, Thomas had attempted to place
corrupt officials at crucial government positions
andd his
hi conduct
d t as telecom
t l secretary
t
concerning the 2G scam was questionable.
In a bid to bail out the government, attorney
general G. E. Vahanvati said some of the
statements made in the PIL were not correct.
Though he did not deny the chargesheet,
Vahanvati tried to give a clean chit to Thomas,
Thomas
stating that it was a Kerala cabinet decision to
import palm oil and Thomas as secretary had
merely implemented the decision
8
2
Rules for appointing the CVC
` The Central Vigilance Commission is constituted under the Central Vigilance
Commission Act, 2003
` The constitutional
Th tit ti l body
b d comprises
i a central
t l vigilance
i il commissioner
i i and
d two
t
vigilance commissioners.
` The CVC Act does not lay down specific "eligibility criteria" for the
appointment of commissioners. But since they deal with cases of corruption
in high offices of government, it is expected that the incumbent should be a
person of impeccable integrity
` Any former central
government bureaucrat or
someone who has served in
a central government
corporation can be appointed
the central vigilance
commissioner or vigilance
commissioner
` The candidate should have
knowledge and experience in
matters relating to vigilance,
policy making and
administration, including
police administration; or,
expertise and experience in
finance, including insurance
and banking, law, vigilance
and investigation
` The commissioners are
appointed by a three-member
committee comprising the
PM, home minister and
Leader of Opposition in Lok
Sabha.
` The committee usually considers a panel of names. It is expected that the
three will concur on a name.
` But that is not essential, and even if the Leader of the Opposition objects, a
commissioner can be appointed by majority of two – which is what has
happened in the case of Mr. Thomas.
` Thomas is an accused in the Palmolein import case.
case As Telecom Secretary,
Secretary
Thomas did nothing to prevent 2G spectrum scam. The court has been
unsparing on the Centre over the 2G scam and has also questioned the PM's
"inaction" over the issue,
8
3
'Integrity for CVC not mandatory‘, says Govt… ???
` In a bizarre argument, the government has defended the selection
of charge-sheeted P. J. Thomas as the head of the country's top
anti-corruption body before the Supreme Court by stating that
"impeccable integrity" was not an eligibility criterion for
appointment of the Central Vigilance Commissioner (CVC).
(CVC)
` Attorney General G. E. Vahanvati made the statement after a
bench comprising Chief Justice S. H. Kapadia, Justice K. S.
Radhakrishnan and Justice Swatanter Kumar repeatedly
questioned the selection of Thomas for the post despite the fact
that he had been charge-sheeted in a corruption case which was
pending
pending.

8
4
` Congress Minister Shashi Tharoor
had to Quit
` Rs. 70 crore worth ‘Sweat Equity’
distributed for free to his now wife
and then ‘friend’ Sunanda Pushkar.

8
5
KOCHI KI GOCHI
` DLF IPL T20 might
i ht have
h made
d made d a place
l for
f itself
it lf in
i the
th history
hi t
books. The worlds biggest cricketing carnival held this year will always
be remembered as the tournament, which clean bowled a minister in
Indian Government and made him jobless.
` This story has all the ingredients for making of a Bollywood potboiler,
beautiful and mysterious women, political drama, fight between friends,
loads of money and cricket – a sport which enjoys a cult status in the Indian
sub-continent.
` The controversy over the franchisees of IPL Kochi Team, which had been
grabbing the national and international headlines, has taken the head of
Shashi Tharoor, with the embarrassed ruling party, Congress, finally showing
the door to the controversial minister.
` Tharoor had to resign from his post of – Deputy Minister For External Affairs
over the brouhaha raised over ‘sweat equity for franchisee’ scam which
involved him, his then friend and now wife Sunanda Pushkar.

THE KOCHI SAGA

` Rendezvous Sports World Ltd (RSWL),
(RSWL)
the consortium of businessmen which
won the Kochi franchise for the 2011
edition of the Indian Premier League
(IPL) cricket tournament.
` Mr Shashi Tharoor, then Union Minister
took keen interest in tilting the balance
in favor of Kochi in the auction.
` Before becoming a Minister of state in
External Affairs ministry and Member
of Parliament from Trivandrum, Kerala
Tharoor had served as the Under
Secretary in United Nations
Organisation. He began to patronise
the Rendezous consortium and did a
herculean task to win the team into
IPL....
` He boasted that he was doing it with a
pure motive
ti off helping
h l i th cause off
the
Kerala….

8
6
 Questions arose that:
` Why should a busy politician occupied with a hectic job interfere into an
economic issue, not concerning the government?
` Was he using Sunanda Pushkar ( his self professed ‘friend' ) as a proxy?
` That questioned his motives - was there any financial gain behind
Tharoor's involvement in IPL?
` He also made a phone call to Lalit Modi asking him not to reveal the
ownership details and gave public opinions over IPL's inner circle. Why ?
Who was Sunanda Pushkar ?
• Sunanda Pushkar , now married to Shashi Tharoor is a divorcee, who is in
her 40s, runs a spa in Dubai.
• She also holds an executive's post with an infrastructure company owned by
the Emirate government.
• She has also worked with advertising firms, a travel agency in Dubai as well
as with an IT firm in Toronto.
• She belongs to Sopore in the Kashmir Valley and her father is a retired Lt
Colonel.
• She was a close friend of Shashi Tharoor, Sunanda and was seen with him at
various social events in the past.
past
• Sunanda Pushkar was at the centre of the Kochi IPL franchise storm.
Kick back of Rs. 70 crore ?
` There were allegations
g that Tharoor used her as a front to collect Rs 70 crores
((19% of the 25% owned by Rendezous sports world in Kochi) for helping the Kochi
owners get their IPL team.
` Rendezvous Sports World leads a consortium that bought the Kochi team.
` The group has offered a staunch defense of its decision to give away ‘sweat equity’
worth Rs 70 crores to Pushkar.
` It says that she is a Sales and Marketing Expert who knows the Kerala and middle
east market well and deserves to be rewarded for the expertise she offered to the
consortium.
` Sunanda Pushkar later announced that she was giving back the ‘sweat equity’ she
had received from the franchisees of the Kochi Team
What is Sweat Equity?
` The term `sweat equity’ refers to equity shares provided to the company’s
employees on favorable terms (discounted or free), in recognition of their hard
working. Sweat equity usually takes the form of giving options to employees or
usually directors to buy shares of the company, so they become part owners
and participate in the profits, apart from earning salary.
` The Companies Act defines `sweat equity shares’ as equity shares issued by the
company to employees or directors at a discount or for consideration other than
cash for providing know-how or making available rights in the nature of
intellectual property rights or value additions, by whatever name called.

8
8
 Rs. 70 crores for free..
` The Issue of “Sweat Equity” soon became a hot topic for all Indians.
` The reason for the rising interest in the topic was because of Sunanda
Pushkar, a future wife of Shashi Tharoor.
` Sunanda Pushkar, a sales manager working in Dubai based company was
offered 4.5% Sweat Equity worth Rs. 70 Crores.
` People asked resignation of Shashi Tharoor for being party to the
R d
Rendezvous S t World
Sports W ld Consortium.
C ti
` How will any one offer Rs. 70 Crore worth shares to someone free ??
` Lalit Modi questioned the shareholders behind the Kochi IPL franchise on
his Twitter account after revealing ownership details.
` It emerged that one of the shareholders was an associate of Shashi
Th
Tharoor, th minister
then i i t in
i the
th Central
C t l Government.
G t
What followed was a public spat between Modi and Tharoor, the franchise
complaining to the BCCI, and the board president, Shashank Manohar,
writing a letter to Modi pulling him up for his action
Tharoor’s wicket down..
• No one would
N ld offer
ff such
h amountt off
money to other unless there is a
quid pro quo.
• Even in this case, the way of
allotting the shares was illegal.
• Rendezvous Sports World might
have thought that, Sweat Equity
might be the easiest way to offer
‘Sweets’ to Shashi Tharoor, but the
same caused a controversy, which
took his head.
• On April 18,18 2010 Sunanda
Pushkar offered to give away the
sweat equity shares held by her
to avoid embarassment. But it
was too late. Her statement
confirmed Shashi Tharoor as
guilty
g y and he was forced to q
quit.

8
9
Indian government, the corporate sector and people at
large
g were stunned after founder-chairman of one of the
country’s largest information technology (IT) services
companies admitted to years of cheating and manipulation
of accounts and falsified profits.
The founding promoter of Satyam Computer Services Limited,
Ramalinga Raju, resigned as the company’s chairman putting
outt a confessional
f i l statement
t t t admitting
d itti th t roughly
that hl 1.5
1 5 billion
billi
US dollars (or the equivalent of 70 billion Indian rupees) of the
firm’s past funds were "non-existent".

9
0
` Indian government,
government the corporate sector and people at large were stunned
after founder-chairman of one of the country’s largest information
technology (IT) services companies admitted to years of cheating and
manipulation of accounts and falsified profits.
` The founding promoter of Satyam Computer Services Limited, Ramalinga Raju,
resigned as the company’s chairman putting out a confessional statement
admitting that roughly 1.5 billion US dollars (or the equivalent of 70 billion
Indian rupees) of the firm’s past funds were "non-existent".
` What shocked analysts is that the money, that is now supposed to be fictitious,
had been recorded in Satyam’s balance sheets and books of account that had
been audited by internationally reputed auditors, PriceWaterhouseCoopers.
` SEBI’s chairman C.B. Bhave described the financial wrongdoing in Satyam as
an event of "horrifying
horrifying magnitude
magnitude".
` The Satyam scam dominated the media and shocked the nation at large, as
what is ironical is that the word "Satyam" means "truth".
` A most alarming aspect of the episode was that Raju acknowledged that his
company’s financial records had been fudged and manipulated for the "last
several years".
` "It was like riding a tiger, not knowing how to get off without being eaten," wrote
the disgraced Raju in his letter.
` It's going to be a long wait before Ramalinga Raju is brought to justice, Those
in the know of things reckon that it will be at least two years before the
Enforcement Directorate (ED) gets all the answers that it has sought in letters
rogatory
g y sent to 60 countries.
` Basically, the ED wants to know whether Raju and his aides have swindled
Satyam's accounts overseas and deposited the money there. Only after the
replies are received, it can file a chargesheet in the special court set up to try
Raju related cases.
` The charges against Raju continue to pile up. In his infamous "can't get off the
tiger that I rode
rode" letter,
letter Raju had confessed to cooking books of Satyam to the
tune of Rs 5,361 crore. The CBI in its chargesheet — it has filed three till now
— raised the scam figure to Rs 7,000 crore.
` But now it says Satyam was a much higher Rs 24,000 crore scandal. When
Justice Raja Elanago wondered in open court how there was not much hue
and cry when the scam was so big, the CBI counsel said the new figure had
just been arrived at.
at
` This after procuring material evidence of forgeries in fixed deposits of Satyam
in New York banks.

9
1
How they did it
` Investigations are now revealing evidence of insider trading by the promoters
even before the scandal broke.
broke
` The big take away from the Registrar of Companies report is that the top
management of Satyam - the directors and senior officials - sold shares ahead
of the Big Bang revelation by Raju.
` The reports say Satyam books have been overstated by Rs 5,000 to Rs 6,000
crore, leading to an inflated stock price that helped the top management make
money.
Who sold what?
` Raju has claimed that no one else in the company was privy to the fudging of
accounts.
` BSE figures show a number of senior people in the company, including Raju
and CFO Vadlamani were reportedly selling Satyam
Satyam's
s shares over the last few
years.
` In June 2001, Raju had nearly 23 per cent shares. By December that year, his
share was down to 22.4 per cent.
` In September 2002, it fell to 21.6 per cent which fell a year later to just over 19
per cent.
` In 2004, Raju's holding was 16 per cent which fell to 14 per cent in 2005, 11 per
cent in 2006. In 2007 it was in single digit.
` By September 2008 Raju's share was just 8.27 per cent.
` BSE figure also show Vadlamani sold 92,538 shares while the then CEO Ram
Mynampati sold 700,000 shares plus 2,50,000 ADRs.
` Apartt from
A f th
these, other
th senior
i officials
ffi i l also
l reportedly
t dl sold
ld large
l number
b off
shares. Sources say they include one Kiran Cavale who reportedly sold
400,000 shares and 10,000 ADRs and one Rajan Nagarajan who reportedly
sold 430,000 shares and 70,000 ADRs.
` We are nowhere near unravelling the total magnitude of the scam. It will take
months, the overseas dimension of the case is the problem," said an
i
investigator.
ti t
` However, regarding operations in the country, the CBI has traced more than
400 fictitious companies floated by Raju and his associates for the purpose of
diverting the (alleged) proceeds of crime.
` The CBI believes that it has nailed most of the real estate deals struck by Raju
through these fictitious entities. Nearly 2,000 acres of land acquired by Raju
and family with these proceeds have also been identified.

9
2
` Parliament Debate, Questions, Reports / Surveys…
` Print & Electronic Media…
` C G CVC
CAG, C C Reports…
` RTI Queries & Responses…
` Various Ministries Govt. of India
` NCDEX, MCX, Planning Commission, CMIE, FMC

9
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