Archive for January, 2009

“Satyam saga” and Politics

Posted on January 14, 2009. Filed under: Politics |

  • Mint, January 14, 2009, p.4

Are Satyam’s shareholders paying the price of land?

It is interesting to note the almost deafening silence of the political establishment on this issue

Corporate Governance | Jagdeep S.Chhokar

The Satyam Computer Services Ltd saga has attracted comment that has chiefly focused on three angles: the ethical conduct of founder B. Ramalinga Raju; the negligence of the auditors, Price Waterhouse; and the role of independent directors. The whole discourse seems to be missing a critical link in the chain—politics.

It is interesting to note the almost deafening silence of the political establishment on this issue. Though the controversy began with Satyam’s 16 December announcement that it would buy two companies owned by Raju’s sons—a decision it killed in 12 hours—and snowballed into a scandal on 7 January, when Raju’s letter to the board of directors became public, the first reported statement by a politician came only on 10 January. PTI reported Bharatiya Janata Party leader L.K. Advani as saying in Ahmedabad that “the government needs to be alert on such frauds and should act fast to punish the guilty”.

The next statement came on 11 January, when CNN-IBN television channel reported that the Telugu Desam Party had demanded a white paper on the infrastructure projects the Andhra Pradesh state government awarded to Maytas Infra Ltd, one of the two companies Satyam had sought to buy.

Given the alacrity with which our political establishment raises a ruckus on every issue, it is surprising that there seemed to be no reaction from any political grouping for so long. One reason suggested is that all Andhra Pradesh political parties remained quiet to protect “Andhra pride”. This appeared to have some validity, given Raju’s strong Andhra cultural preferences. One former employee of an ex-Satyam group firm was quoted in this newspaper on 8 January as saying, “For Raju, family, caste and those who could speak Telugu came first. I am not saying he was not a professional, but other things being equal, he would look at things in that order.”

Land plays a key role in the Satyam saga. Both Maytas Infra and Maytas Properties Ltd dealt with land, one way or another. It has also been reported that the promoters of Satyam and of the Maytas firms had built up a massive land bank in and around Hyderabad. It has also been hinted that because Raju belonged to a farming family, he could never get over his fascination with land.

It defies imagination how one could acquire so much of such prime land without the involvement, or at least acquiescence, of political elements, given that land is a prime asset—politicians all over the world know this, and our politicians are certainly not an exception.

Maytas Infra won projects worth Rs14,000 crore in the last two years or so, including the Rs12,220 crore elevated metro rail project in Hyderabad and the Rs1,590 crore deep water port at Machilipatnam, as well as several irrigation, water supply and electrification projects. Consider the opinion of an established and recognized professional on the Hyderabad Metro Rail project—none other than E. Sreedharan, head of the Delhi Metro Rail Corp. Ltd (DMRC), which served as a project consultant to the Hyderabad Metro project. In September, Sreedharan wrote a letter to the Planning Commission expressing apprehensions about the project. He is reported to have written: “It is apparent that the build-operate-transfer operator has a hidden agenda, which appears to be to extend the metro network to large tracts of his private land holdings, so as to reap a windfall profit four-five times the land price.” Sreedharan further noted that the alignment of the metro lines was changed to ensure more profit to the bidders and that the contract “smelled like a political scam”. The only measures taken by the state government in response were to demand an unconditional apology from Sreedharan and remove DMRC as a project consultant. The Planning Commission said that Sreedharan’s concerns were misconceived.

Former chief minister N. Chandrababu Naidu presented Raju to the likes of former US president Bill Clinton as Andhra Pradesh’s “poster boy”. Current chief minister Y.S. Rajasekhara Reddy is no different. Political groupings of all shades have been beneficiaries of such frauds; without their support, frauds of this magnitude are impossible. Since these connections haven’t come to light as yet, politicians are playing it cool, making vague statements about government vigilance and prosecution.

The nexus between politics and business is vicious. Disciplining auditors and independent directors, important as they may be, is only scratching the surface. The real corrective measures lie elsewhere.

Jagdeep S. Chhokar is a former professor of organizational behaviour at the Indian Institute of Management, Ahmedabad, and one of the founding members of Association for Democratic Reforms (

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India 2009: Time for citizens to get involved in politics

Posted on January 8, 2009. Filed under: Elections, Politics |

India 2009: Time for citizens to get active in politics

Jagdeep S. Chhokar1

Published in Freedom First, January 2009, No. 499, pp.5-7, 39.

India and its democracy are at a critical juncture, particularly as the very “Idea of India” has been under severe challenge, only one of the manifestations of which were the events of November 26-28, 2008, in Mumbai. The forthcoming Lok Sabha elections in the early part of 2009 are likely to be one of the sterner tests faced by the sixty-year-old republic. The clamour against politicians, graphically captured by an SMS saying “Terrorists are not the ones who come by boat, but those that come by vote” is one of the most important outcomes of what has come to be called 26/11. Where are India and Indian Democracy at the beginning of 2009, where to and in what direction are they likely to go, and what can we, the citizens, do to take them in the correct, desired directions are the three broad issues that concern us here.

Indian democracy had a very auspicious and positive beginning, and flourished under the watchful eye and the nurturing hand of the Fabian socialist and idealistic democrat Jawaharlal Nehru. His respect for Parliament, nurturing of the fledgling opposition, concern for the minorities, and global vision contributed in a very significant way to laying a strong foundation for our democratic institutions, from Independence to the mid-1960s. Ironically, it was during the tenure of Nehru’s own daughter, Indira Gandhi, as Prime Minister that the dilution, debasement, and even destruction of the same institutions that Nehru had tried to build, started. And one of the institutions was what may be called morality in politics, a shining example of which was the H.G.Mudgal case.

Mudgal was a Member of Parliament from the Congress party. He was reported to have had some dealings with the Bombay Bullion Association, and was alleged to have been canvassing support for it in Parliament, in return for some alleged financial and other business advantages. When the matter came to light, it was referred to an ad hoc parliamentary committee for enquiry on June 06, 1951. The committee found Mudgal to have indulged in “conduct unbecoming of a Member of Parliament” and recommended that he be expelled from the House. Mudgal reportedly attempted to resign from the Parliament but was not allowed to do so. On September 24, 1951, Nehru, the Prime Minister and the Leader of the Congress Party, moved the following resolution:

“That this House accepts the finding of the committee that the conduct of Shri Mudgal is derogatory to the dignity of the House and inconsistent with the standards which Parliament is entitled to expect from its members, and resolves that Shri Mudgal be expelled from the House.”

Given the overwhelming majority of the Congress, the resolution was carried and Mudgal was expelled from the Parliament.

During the 57 years that intervened between 1951 and 2008, political morality has come (actually gone down) a long, long way. A surrogate of the distance traveled may be the fact that 18.18 per cent of the Members in the 14th Lok Sabha (2004-08) had criminal cases pending against them at the time of elections in 2004.This was stated by none other than the Chief Election Commissioner of India N. Gopalaswami while delivering the 23rd Sardar Vallabhbhai Patel memorial lecture on the theme, “Election Management: New Paradigm” at the Sardar Vallabhbhai Patel National Police Academy in Hyderabad on October 20, 2008. In terms of actual numbers, 18.18 per cent works out to about 100. Other estimates put the figure at somewhere around 120 which works out to about 22 per cent. Taking the middle figure, if about 110 MPs have criminal cases pending against them, including those for murder, rape, dacoity, there can be hardly any doubt about the state of political morality in the country.

The rot of the institutions that started during Indira Gandhi’s first tenure as Prime Minister (1966-77) has continued with the coming of age of a large number of regional, and caste-driven political parties and the emergence and cultivation of “vote banks” by these smaller, regional parties. With the intensification of competition in the political arena, concepts such as ideology and morality took a back seat and “winnability” became the only and overriding criterion at election time. The nadir of political morality perhaps was when four or five members of Lok Sabha were brought from jails where they were serving sentences for heinous crimes, to the House to vote on a motion of confidence in the government.

In a representative democracy such as ours, the Parliament and governance are outcomes of a larger political process, of which elections are just a very visible event in which citizens/voters have a central role. Some of the important issues in the political system are: who can or should be allowed to vote, when should electoral rolls be prepared, revised, and how? The formation, functioning including funding, etc. of political parties are perhaps the very essence of the political system. The reason the functioning of political parties is critical to the political process is very simple and straightforward–political parties are the key and the major actors in the political arena. It is the political parties who decide whom can the voters vote for. They do this when they choose which aspirant will get the nomination of a particular party. Even after a candidate gets elected, s/he is not free to vote in the legislature according to her/his wishes because it is the party which decides, actually controls the voting behaviour of their elected representatives, if necessary by way of the issue of the whip, and the operation of the anti-defection law. The irony of the situation in India is that while all political parties loudly claim that they are the defenders of democracy in the country, actually none of the political parties in the country is democratic in its internal functioning. This situation has not gone unnoticed. The 170th report of the Law Commission of India focused exclusively on Electoral Reforms, and devoted one full chapter of the report to the “Necessity for providing law relating to internal democracy within political parties.” After reviewing views of all concerned stakeholders and current legal provisions in India and several other mature democracies, the Law Commission came to the conclusion that “…it is necessary to regulate by law their (political parties’) formation and functioning.” Summarising the rationale for this recommendation, it said “A political party which does not respect democratic principles in its internal working cannot be expected to respect those principles in the governance of the country. It cannot be dictatorship internally and democratic in its functioning outside” It then went on to reiterate that “It is therefore, necessary to introduce internal democracy, financial transparency and accountability in the working of the political parties” (italics added). (1451)

The crux of the matter is that all such recommendations of making new laws and also implementing them, can only be done by the political establishment, and the politicians being familiar and also possibly comfortable with the existing system, do not want to change anything, or at least the political establishment has shown absolutely no signs of wanting to do this. A simple and current example of this is that although the major political parties made categorical statements before the five state assembly elections in November-December 2008, that no tickets will be given to candidates who have criminal cases pending against them but every party did precisely that, as shown in the table below.


Total number of candidates with pending criminal cases

Elected MLAs with pending criminal cases

TOTAL MLAs with pending criminal cases



























Madhya Pradesh
















This brings us to the third issue, what can citizens do.

It is the elected representatives who are authorised to do the above mentioned changes under the existing scheme of things, and since they are politicians above anything else, it is not realistic to expect them to make any of the above changes on their own. That is where the role of the citizens becomes absolutely critical and completely unavoidable. It is now being said more and more frequently that ‘politics is too serious a business to be left only to politicians’. Citizens have no choice whatsoever but to get actively involved in politics if they want the governance of the country to improve. Felix Frankfurter, a former Professor of Law and later appointed as a judge of the U.S. Supreme Court in 1939, expressed this very eloquently in the following words:

“Democracy involves hardship – the hardship of the unceasing responsibility of every citizen. Where the entire people do not take a continuous and considered part in public life, there can be no democracy in any meaningful sense of the term. Democracy is always a beckoning goal, not a safe harbor. For freedom is an unremitting endeavor, never a final achievement. That is why no office in the land is more important than that of being a citizen” (Italic added).

What can and should the citizens do? The clamour against politicians after the Mumbai episode in November last year, is partly misplaced. It should not have been against politics and politicians in general, but against the present lot of politicians. Politics and politicians are essential in a representative democracy such as ours. They perform the essential task of mobilising and consolidating public opinion. However, over the years, our politicians seem to have decided that they have the exclusive right to decide what is good for the country and for its people, and under the garb of this, they have been doing what is good for them, their families and friends, their communities, and their parties, completely forgetting about the nation and its people. And that is the change we need: for politicians to think about the country and its people also, in addition to themselves, their families and friends, and their parties. And then, there is the million dollar question: How can, and do, we, the citizens, go about doing this.

The first thing we can do is to start taking responsibility for the situation in which we and the country currently are. And if we do not like that situation, feel responsible for doing something concrete to change it rather than merely blaming everyone and everything, including ‘the system’. One of the simplest things we can do is to go out and vote. If our names are not on the electoral rolls (voters’ list) then we should make it our business to find out the procedure for correcting that and actually do it. There might be some obstacles and pin-pricks in that but we owe it to ourselves and the country, to get ourselves registered as voters, getting over all hurdles, so that we can exercise the most sacred of our rights as citizens—the right to vote. We should obviously vote with care, making an informed choice while choosing whom to vote for. Each citizen has the right, and should exercise it, to vote for a candidate of her/his choice. It is actually immaterial whether a person makes the choice on the basis of the candidate or the party, so long as it is an informed choice.

However, what does one do if one does not like any of the candidates and any of the political parties? There is the provision of Section 49-O of the Conduct of Election Rules, 1961, (and NOT of the Representation of People Act) which reads as follows:

“49-O. Elector deciding not to vote.-If an elector, after his electoral roll number has been duly entered in the register of voters in Form-17A and has put his signature or thumb impression thereon as required under sub-rule (1) of rule 49L, decided not to record his vote, a remark to this effect shall be made against the said entry in Form 17A by the presiding officer and the signature or thumb impression of the elector shall be obtained against such remark.”

What the rule means is that a voter can ensure that her/his vote is not misused such as being cast fraudulently in favour of any candidate, and in that process the voter loses the secrecy of her/his vote. Rule 49-O does not mean that if a large number of voters use it, none of the candidates will be elected and there will be re-election, as has been mistakenly mentioned in several attempts to popularise this provision. This obviously is not the ideal solution but is the only one available at the present time.
The ideal solution will be if the electronic voting machine provide for an extra option, by way of an extra button, which says “None of the above”, and if this option gets the maximum number of votes polled, then there should be a re-election, and none of the candidates who contested the earlier election should be allowed to contest the second time. In the current political and electoral climate in the country, this is likely to be considered much too radical to happen, or to be allowed to happen by the political establishment, but this is precisely what citizens involved in politics should strive for because only such actions can attract ‘good’ people to entering the arena of competitive politics.
There are many other actions that can be taken and the best compilation of these is the 170th report of the Law Commission of India which was submitted to the government in May 1999 but the government, led by the current breed of politicians, has obviously not found any time or inclination to even think of its implementation. It is now left to citizens to create conditions where the political establishment will be forced to make worthwhile changes in the political and electoral systems, the most significant of which are internal democracy and financial transparency of political parties.


1Jagdeep S. Chhokar (, a retired professor of Indian Institute of Management, Ahmedabad, and one of the founding members of Association for Democratic Reforms (, works, among other things, on improving democracy and governance in the country. He is a life member of the Indian Liberal Group.

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