Chargesheet

Chargesheet Against NDA Part - II

- Compiled by DEPCO, AICC

Disinvestments and Denationalisation – "Sales of the century." The Congress wants the government to explain why privatization is being carried out in secrecy and in a non-transparent manner. We would also like to know what plans the government has in place for the security of the employees working in units which face privatization. Meanwhile, there are certain inherent weaknesses in the Disinvestments Ministry as well. The Disinvestments Commission (DC), which was set up to look into the process should have been empowered to take decisions. By setting up a separate Department of Disinvestments, the role of the DC has become uncertain. It is an addition to the already cumbersome layers of red tape and is certain to delay decisions. For a government that speaks of downsizing government this is doing the opposite. Meanwhile three cases illustrate conclusively that the government has got it completely wrong. We should know because it is our pioneering efforts in this sector that this government seeks to imitate. The GAIL deal, the sale of Modern Foods and the Disinvestment of Indian Airlines show that the privatization policy of this government is flawed. The mechanisms of evoluation cannot be right in any of these cases, because the evaluation is disproportionate to the true value of either of these holdings. For example, Modern Foods recorded a turnover of Rs. 171.85 crores in the last financial year yet the sale of Modern Foods has been negotiated for a mere Rs. 104 crores. Indian Airlines is a profit making company with huge assets, yet the government has decided to divest its stake in the company. Clearly this is a government that is unconcerned with the true details of the entire disinvestments programme. That disinvestment would be proportionately reflected in enhanced Social sector spending remains a distant dream.

Phasing out of QR’s under pressure – "If you can’t beat them, join them." Quantative Restrictions are a mechanism by which a sovereign government can impose entry restrictions on imports of certain goods through systems of import/export licenses and quotas in order to protect its domestic industry. The Indian Government’s decision to eliminate the Quantitative Restrictions (QRs) on imports years ahead of the earlier accepted schedule under pressure from the USA will have serious repercussions on the interests of our farmers and industries. The NDA government carried out secret negotiations with the USA without consulting the affected parties and reached an agreement with their Deputy Trade Representative on 16 December, 1999 to advance the phase out schedule from April 2003 to April 2000 and April 2001. The Government of India requested the US government not to announce the agreement until Parliament went into recess. The agreement was therefore actually announced not in New Delhi but in Washington on 27 December, 1999 when we were preoccupied with the hijack crisis. It is obvious that the government failed to persuade the US for a QR phase-out period until April 2003 as agreed with other major trading partners. Consequently, the decision to eliminate import restrictions will enable numerous primary commodities like wheat, rice, milk products, coconuts, tea and coffee to be legally imported without any import licenses. The NDA government must explain why it could not get the same terms from the US as it got from the European Union. It must also inform us whether it has done any impact assessment study on the sectors likely to be affected most and whether it has any strategy to help the farmers and industry to fight the onslaught of these imports. On the face of it this policy is perhaps the finest example of economic capitulation and appeasement in the post-Cold War world.

BALCO and ENRON deals – "Brokers in paradise." The CM of Chattisgarh Shri Ajit Jogi stated that :

"The BALCO deal is daylight robbery of the country’s wealth by the BJP government and the struggle must continue till the infamous deal of the BALCO sell out is reversed."

Consider the facts. The BALCO aluminium plant at Korba is worth Rs. 5000 crores. It possess 2720 acres of land, a 270 MW captive power plant, a replacement price of Rs. 1080 crores at the current market rate. It holds a stock of aluminium worth Rs. 100 crore, besides having bauxite mines with huge reserves at Mainpat and Kawardah and another plant at Asansol. All this has been handed over to M/s Sterlite at a paltry throwaway price of Rs. 551.5 crores after being advised by Jardine Fleming the government’s international consultants. What is this if it isn’t daylight robbery? We campaigned vigorously against this sale. More importantly the workers and employees of BALCO too campaigned relentlessly against this oppressive development. In response the state unit of the BJP had tried to crush our resolve, but they too know the folly of their central policy. Meanwhile the Department of Disinvestments and the redoubtable Shri Shourie will proceed to unload 40% equity in Air India although there is only one bidder. Enron has become a case of no light at the end of the tunnel. This was to be the showcase of investment in the power sector. It was one of the eight sovereign guarantee projects. But the fast track has turned into a virtual minefield. We have the option of bankrupting the most successful State of the country or lose all initiative in the world market, perhaps even both. Of course many governments have been involved but it must be remembered that it was cleared in haste by a thirteen-day wonder BJP government even as it faced a no-confidence motion. The Godbole Committee on the Enron project has concluded that the company is overcharging MSEB by Rs. 930 crores per year. Its findings are devastating, "The committee is troubled with the failure of governance that seems to have characterized almost every step of the decision-making process." Educating India has been an expensive endeavour. And we have yet to read the last lesson.

Cheating in the Name of martyrs : The NDA Government imported aluminium coffins for Kargil martyrs at twice the price from a firm that did not manufacture coffins.

A Texas firm, Buitron & Baiza, Quoted $2,500 for an aluminium casket in April 1997 responding to enquiries made by the Indian Army. The army found it honourable to bring back martyred soldiers in aluminium caskets.

During the Kargil war, the army felt an urgent need for aluminium caskets. In July 1999, the defence ministry’s price negotiating committee awarded the contract for 500 caskets to Buitron & Baiza.

Buitron & Baiza does not manufacture caskets. It is a funeral home. It is unclear where the Texas firm sourced the caskets from. But the first lot of caskets reached India in March 2000, By then, the Kargil War had long ceased. Also the caskets were overweight. The caskets were rejected. Only, the Defence ministry had paid up for the caskets at a cost of $2,500 each.

The Comptroller and Auditor General of India (CAG) objected to the deal. The CAG said that the price of the casket was inflated and that the Defence ministry did not seek quotations from other casket manufacturers.

The CAG report has come out with a scathing indictment of the systematic corruption and irregularities in the emergency procurement during "Operation Vijay" in May-June, 1999.

The CAG report audited 123 contracts involving Rs. 2,163,09 crore. It found that supplies worth Rs. 1,762,21 crore, which constituted 81 percent of the total expenditure, materialized six months after the operations in January, 2000. The report concludes: "Thus, while critical supplies of clothing, ammunition and arms could not reach the troops during the operation, an amount of Rs. 1,046 crore, almost half of the total, entirely in foreign exchange, was spent fruitlessly, breaching established principles of propriety."

The CAG report lists how purchases of a whole host of equipment were fiddled. They range from small arms, artillery ammunition, special clothing and other military equipment. Among the deals found violating procedures are the buying of handheld thermal imagers (Rs. 41.95 crore), terminally guided munitions (Rs. 151 crore), bulletproof jackets (Rs. 51.65 crore), anti material rifles (Rs. 23.22 crore), flame throwers (Rs. 18.22 crore) and ammunition (Rs. 402.76 crore).

Nothing was sacrosanct for making money out of the jawans fighting in the Kargil war. The report found that 3,438 pairs of boots ordered for the soldiers, were of two smaller sizes, 5 and 6, not fit for adults; thus Rs. 1.85 crore was frittered away.

Brief on Petrol Pump Allotment Scam of NDA/BJP Government :

1. October 9, 2000 Petroleum Minister Ram Naik set guidelines on how the 59 Dealer Selection Boards (DSBs) nationwide should allot petrol pumps/LPG outlets.

1.1 On paper, the guidelines were meant to provide a "transparent, uniform and fair" procedure.

1.2 Not that no one complained to Shri Naik. In fact, last December – when the allotment process was well underway – the Parliamentary Standing Committee on Petroleum and Chemicals pointed out glaring loopholes in Shri Naik’s guideline. It even mentioned how it had got complaints from some DSB chairmen, all retired judges, that they were "pressured for allotment by politicians."

1.3 Shri Naik followed no "institutional system" to select DSB chairmen from among retired judges. This "absolute and unhindered" power to select chairman became "a source of corruption … negating the objective of transparency." The committee therefore recommended that the high court should be requested to form the panel of suitable retired judges from which the chairmen may be selected.

1.4 Shri Naik’s guidelines gave no security of tenure to the chairmen, though they were appointed for a two-year term. Within a year of the working of the guidelines, the Government dispensed with the services of 13 out of 59 chairmen.

1.5 This, the committee said, shows "the Government used its power indiscriminately" and that it "wants such persons as chairmen who would follow the dictates of the authority not prescribed in the guidelines."

1.6 The Government virtually gave a veto power to the chairman by doubling the weightage of his vote. To ensure "the objective of uniformity," the committee said, the chairman should have the same power as his two colleagues.

1.7 The guidelines prescribed that candidates would be judged on the basis of their personality, education, capability to arrange finance and provide infrastructure, the committee found that there were no parameters on how the marks were to be awarded for each of these criteria. "This has resulted in subjectivity of the members of the DSBs."

1.8 The committee recorded that it even came across cases where DSB chairmen complained that they were under pressure from "politicians" to make allotments to "specific persons recommended by them."