Thursday, August 25, 2011

India Corruption Scandal - Can Manmohan Singh Government survive Anna Hazare?

The Indian Prime Minister, Dr. Manmohan Singh is probably the most honest and competent Prime Minister India has had since Nehru. Yet it is a shame that some of the biggest corruption scandals have taken place in his Government.

The agitation launched by a Ghandi follower - Anna Hazare has caught the attention of Indian nation. People are fed up of corruption at every level of society, especially huge corruption scandals involving their elected representatives. The young and professionals have made Anna Hazare's cause their own and the movement has spread like wild fire.

Some of the biggest Indian business houses are embroiled in the alleged Government bribery scandals. The most infamous is the Telecom Spectrum auction scandal, which according to some estimates has cost the Indian tax payer at least $5 billion (some put the figure as high as $40 billion).

It all started on January 10, 2008 with then Indian Telecom Minister Mr. Andimuthu Raja (now in jail) calling bids for the auction of telecom spectrum to close the same day. It is alleged that representatives of shining stars of Indian industry (Amabanis, Tatas and others), having already fixed the price and Minsiter's bribe, were lounging in Minister's ante room with bank drafts in hand. The purpose of the short window for a multi-million dollar auction was to exclude foreign bidders and any new comers. It is reported that the Minister acquired six brand new Mercedes Benz cars soon thereafter. The exact figure of Minister's bribe is not known, but some estimates put it at $130 million.

It was a huge windfall for those in on the scheme. One of the companies that had paid $345 million for their segment of the spectrum, sold just 45% of their stake to a foreign company for $900 million, a profit of $744 million on an investment of $155 million (45% of $345 m). Similarly, other Captains of Indian industry sold minority interests in their spectrum allocation for hundreds of millions of dollars more than what they had paid. Obviously, buying the Indian Telecom Minister turned out to be an extremely profitable investment.

The Minister carried on until the scandal broke. The Indian Prime Minister, Dr Manmohan Singh failed to launch an immediate inquiry against the Minister or to remove him . No businessman has been charged to date either.

This is just one of the many scandals that Indian Government is embroiled in. The massive misappropriation of funds from Commonwealth Games is another and the list goes on.

Anna Hazare's Ghandian approach of peaceful protest and hunger strike has shaken Dr. Manmohan Singh's Government. In despair, they arrested Hazare, even though there is no law in India against hunger strike. Then they offered to released him, but he refused unless and until he was allowed to carry on hunger strike. In the end, Government had to capitulate. This fiasco has helped Hazare attract a great deal more attention.

What Anna Hazare is demanding is that Parliament create positions of Ombudsmen (Lokpal) at Federal and State levels with full authority to investigate corruption by all elected officials and bureaucrats. The law currently placed before the parliament exempts the Prime Minister from such an examination, nor does it include junior bureaucrats. This is not acceptable to Mr. Hazare, nor to the majority of Indian public, hence Mr. Hazare's hunger strike continues.

To save the situation, Dr. Manmohan Singh should immediately adopt Mr. Hazare's suggestions. He should denounce all corrupt politicians and kick them out of his cabinet, bring a strict accountability law before the Parliament and if politicians do not approve it, call general elections. With these actions, Indian public may still be prepared to fall behind him. Who knows, this may even give his Congress Party a majority. If he does not take immediate action, him and the Congress Party may face a bleak future.

I hope nothing happens to the 74 year old Mr. Hazare. If he were to die from hunger strike, all hell could break lose.

(Acknowledgement: some of the information contained in this post has been taken from today's Globe & Mail).

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