It’s one of those weeks in India when stories keep tumbling out that show how life is really lived by many of those who run the country – and how business is politics, and politics is business. Judging by comments that have been posted on my blogs since I began Riding the Elephant, few people will be surprised, but it’s worth spotlighting the coincidence of three stories.
First, a banking row. R.P.Singh, the chairman and managing director of government-owned Punjab & Sind Bank, has publicly asked for Congress Party-nominated directors to be removed from the bank’s board of directors. He alleges they have been resisting arrangements for recovery of bad loans from customers close to them.
“They are in league with defaulters of the bank and they want settlements of debt to be done on very paltry terms,” he told me yesterday. He said that the bank had been reducing its high levels of non-performing assets, but some defaulters had been “upset with the recovery process” and had approached the bank through the nominated directors for concessionary settlements. The bank had refused special arrangements and this had led the nominated directors to launch complaints against Mr Singh and his colleagues in a tv program on June 19, alleging they were flouting rules – which Mr Singh denies.
Such political pressure on public sector banks is nothing new in India, nor in some other Asian countries. The Economic Times, a leading business daily, commented yesterday morning that the issue “brings to the fore the tendency of the government of the day to pack PSU (public sector company) boards with ill-qualified political nominees”, adding: “The fact is ministers have long regarded PSUs (public sector companies) under their watch as personal fiefdoms”. But it is rare for a bank chairman to come out in the open about the sort of pressures he and his executives face –and to receive support from the Ministry of Finance, which Mr Singh says has happened in this case.
Next, India’s new presidential candidate. After a long period of indecision, the Congress Party, which heads the current coalition, government, selected Pratibha Patil, the low profile 72-year old governor of the state of Rajasthan, to be its candidate in indirect presidential elections. As well as being a regional politician, she used to practice law and has a reputation for socially valuable works. She seems set to win and become India’s first woman president because Congress and its supporting parties have the votes required, and she has the personal backing of Sonia Gandhi, the Congress leader.
But that initial good news has been followed by other reports about her past that include allegations that a women’s co-operative bank she set up in her Maharashtra home town of Jalgaon was closed in 2003 by the Reserve Bank of India because of a series of irregularities, including Patil’s relatives receiving favorable loans. There have also been reports of irregularities at a sugar mill that she promoted and other stories.
The Congress Party has said that Patil will respond to the charges after the June 30 closing date for presidential nominations. Meanwhile, prime minister Manmohan Singh has been reported saying that she had “done nothing wrong”, and that many Maharashtra sugar mills had failed for environmental reasons. A party spokesman said the loan allegations were “just stories”.
Finally, a very rich chief minister. Mayawati, the leader of the low caste Bahujan Samaj Party was last month elected to power for the fourth time as chief minister of Uttar Pradesh, India’s largest state. This week she has declared assets totaling 52 cores of rupees – that’s $12.68 million – five times the amount she declared in 2004 elections. Included is property worth nearly $10 million, mostly in Delhi, and jewelry worth $122,000.
This is a huge amount for someone who began life as the daughter of a poor government clerk. Mayawati has said that the assets were “accumulated through donations and gifts from party workers across the country” after she had been “framed” in 2003 with legal cases that alleged she possessed undue wealth and that she was involved in corruption on a Taj Corridor tourism infrastructure project linked to the famous Taj Mahal mausoleum in Agra.
She denied the charges at the time and the cases have yet to be heard – soon after Mayawati regained the chief minister’s job, the UP governor refused permission for police authorities to proceed with the Taj Corridor case. This week Mayawati denied she had done anything wrong and said the donations had been made to her personally as well as the party. It must be nice to have such generous supporters!
The $12.68 million became public because Mayawati has had to declare her wealth in nomination papers for election to the UP state assembly. (She did not stand in the recent state assembly elections, so must now win a seat to remain chief minister).
She seems not to worry about such publicity. In 2003 she threw a mind-boggling 47th birthday party in a film-set type location with over 100,000 sweet cakes, 5,000 bouquets of flowers, and a massive 50kg birthday cake. What an interesting and rewarding life these politicos lead!