CRONY ROT

New Delhi May 26   One of the biggest reforms of the Government has been to remove institutional crony capitalism

The breath and scale of the Nirav Modi scandal — where the diamantaire ripped off Punjab National Bank of thousands of crores, helped cash-rich businessmen launder tens of crores in the aftermath of demonetisation and possibly even sold diamonds with a questionable provenance — is mind-boggling. But there is no doubt that Nirav Modi, the criminal mastermind behind this alleged fraud, must have had several accomplices. Some of those accomplices were in the employ of the Government.  Through their taxpayer funded salaries, they enabled a grand rip-off of the Indian taxpayer. Whether it was officials of the Punjab National Bank that allowed Letters of Credit to be issued without any collateral or as it is emerging, insiders in the Central Board of Direct Taxes, they actively withheld information from investigating agencies until Nirav Modi and his partner-in-arms, his uncle Mehul Choksi had made good their flight from India. However, the Government is finally stepping into this mess and trying to clean up the rot that has set in the bureaucracy and the public banking system. A rot that was enabled by corruption and one that stinks of crony capitalism.

Investigative agencies should redouble their efforts in getting to the bottom of the case and finding those who enabled Nirav Modi to commit such an outrageous fraud. To be frank, chances of catching Nirav Modi in the short-term are slim, but that does not mean that those who assisted him, either for lust or lucre, should go unpunished. The Central Bureau of Investigation (CBI) itself is not above suspicion, evidently officers inside the CBI were in touch with recently arrested ‘journalist’ Upendra Rai and several important secret documents relating to this case both from the CBI and the CBDT were found in his house. A network of conniving fraudsters, corrupt officials and sleazy fixers has broken in Delhi and the fallout will be severe. The Government should explore the possibility of summarily dismissing officials found guilty from service. Far too often, corrupt Government officials get away with suspensions and slaps on the wrist. Is it the bureaucracy much more than politicians that has enabled years of crony capitalism in India and the Narendra Modi Government is finally breaking down the jugaadu structure built by these individuals to short-circuit the system. Hopefully it is not too little, too late and some of the ill-gotten gains can be recovered and the immense burden on the Indian taxpayer can finally be reduced.