1. 73 percent hate
crimes against minorities after 2014
Cow vigilantism was the most common reason for attacks
post-2014, with 77 such hate crimes recorded in the last five years. Overall,
124 cow-related hate crimes were recorded between May 24, 2014 and April 30,
2019,
This would be at the top of any list for its sheer lack of success and the widespread havoc that it inflicted on the economy. While being taught now as a cautionary tale in business schools overseas, it enjoys the unique distinction of having failed on every one of its stated objectives (combatting terror funding, fake notes and black money) while having wiped out jobs. Studies by noted economist Arun Kumar and the Centre for Monitoring Indian Economy continue to illustrate that we are not out of the woods yet.
On
November 8th, 86% of India’s currency was nullified in an effort to clean out
“black money” and “counterfeit notes”; this effort resulted in a massive
disruption to the existing social, political and economic functions of the
world’s second largest emerging market. All 500 and 1,000 rupee notes were
instantaneously voided, and a 50-day period ensued where the population could
(ideally) redeem their cancelled cash for freshly issued 2,000 and later 500
rupee notes or deposit them into their respective bank accounts
Even
the banks, debuted to do all the heavy lifting on the ground, weren’t kept in
the loop; ill-equipped for the crisis and unable to make sense of an outlandish
government order, they still managed to do a remarkable job despite not even
having an adequate supply of new notes to balance out the nullified currency.
With 86% of existing cash that was in circulation having been demonetized, the
Indian Economy came to a sudden, screeching halt.
Demonetization in India, implemented in November 2016, was a drastic policy by the government of Prime Minister Narendra Modi, aimed at curbing black money, counterfeiting, and terrorism financing, while promoting a shift toward digital payments. The policy entailed the sudden invalidation of the 500- and 1000-rupee banknotes, which accounted for about 86% of India’s currency in circulation. Despite its initial intentions, demonetization has faced widespread criticism and is often seen as a failure for several reasons:
1. Black Money Retrieval
- Expectation: One of the primary goals was
to flush out black money (untaxed income or money earned through illegal means)
held in cash, expecting that those with illicit wealth would abandon large sums
of cash rather than deposit it in banks, which would bring such funds under
scrutiny.
- Outcome: According to the Reserve Bank of India (RBI), 99.3% of the invalidated currency was eventually returned to the banking system, suggesting that only a minimal amount of black money was "destroyed." Those holding black money appear to have successfully laundered their funds through various means, like funneling money through low-income individuals' accounts, who then deposited the cash on behalf of others.
2. Economic Disruption
- Cash-Dependent Economy: India has a
predominantly cash-based economy, especially in rural and informal sectors. The
sudden withdrawal of high-denomination notes caused a cash crunch, severely
disrupting daily transactions for millions. This hit hardest on small
businesses, informal labor, and rural areas that lacked easy access to banks or
digital payment infrastructure.
- GDP Impact: The immediate economic impact included a decline in GDP growth, with estimates suggesting a contraction in the GDP by about 1.5-2% in the quarters following demonetization. The informal sector, which employs a significant portion of India’s workforce, suffered due to reduced cash flow, leading to job losses and business closures.
3. Impact on Counterfeit Currency and
Terrorist Financing
- Counterfeit Currency: Demonetization aimed
to reduce counterfeit currency in circulation by rendering the existing fake
500- and 1000-rupee notes worthless. While there was an initial dip, reports
indicated that counterfeiters quickly adapted, producing fake notes of the new
500 and 2000 denominations.
- Terror Financing: There was no long-term impact on terrorism financing, as terrorist groups and illegal networks adapted to alternative means of funding. Subsequent government and intelligence reports indicated continued infiltration of fake currency, highlighting that demonetization had only a temporary effect on such activities.
4. Push for Digital Payments and Formalization
- Digital Payment Growth: One of the
positive outcomes cited was the surge in digital payment adoption, as people
had few alternatives during the cash shortage. Digital payments through apps
and online banking spiked, and there was a push for expanding digital
infrastructure.
- Sustainability: However, the trend was not entirely sustainable. Once cash availability normalized, the growth rate of digital transactions slowed, and cash continued to play a dominant role in the economy. The structural changes needed for a permanent shift to digital transactions were not in place, particularly in rural and semi-urban areas with limited digital literacy and infrastructure.
5. Cost-Benefit Analysis and High
Implementation Costs
- Currency Printing and Logistics: The cost
of printing new currency notes, recalibrating ATMs, and logistical adjustments
was substantial. Estimates suggest that the cost of demonetization, including
the economic losses due to productivity declines, may have outweighed the
benefits.
- Banking System Strain: The rush to deposit invalidated notes put significant strain on the banking system, which faced operational challenges and costs to handle the sudden surge. Long queues outside banks and ATMs became a common sight, and several individuals reportedly died due to the stress and delays associated with accessing their own money.
6. Public Sentiment and Political Impact
- Public Inconvenience: Despite the
widespread inconvenience and economic impact, public sentiment toward
demonetization remained mixed, with many initially supporting the move as an
anti-corruption measure. However, as the adverse effects on the economy became
clear, skepticism grew, and many began to view the policy as poorly executed
and ultimately ineffective.
- Political Support: Politically, demonetization strengthened the government’s anti-corruption narrative, helping bolster the ruling party’s image as one that takes bold steps. This, however, was more in terms of perception than tangible results, as the expected impact on black money, corruption, and the informal economy did not materialize.
7. Post-Event Evaluations by Economists and
Analysts
- Mixed Reviews: Economists and financial
experts largely criticized demonetization, arguing that the economic
disruptions and costs far outweighed the benefits. Many consider it a case of
poor policy planning and execution, highlighting that issues like black money
and counterfeit currency require systemic reforms rather than sudden monetary
interventions.
- Global Perception: On a global scale, demonetization was met with skepticism. Many international economists and publications questioned the policy's logic, and some studies later concluded that demonetization had limited or even negative impacts on the broader economy. Conclusion
Overall, while
demonetization did succeed in increasing awareness of digital payments and
contributed to a temporary increase in tax compliance, it largely failed to
meet its stated goals of eradicating black money, reducing counterfeit
currency, or disrupting terror financing. The economic disruptions, costs, and
social inconvenience it created have led to a widespread view that the policy
was ineffective and failed in its objectives. It is often cited as a cautionary
example of the risks associated with sudden, large-scale economic interventions
without thorough planning and consideration of long-term impacts.
Demonetization
in India, implemented in November 2016, had a profound impact on the banking
sector, bringing both opportunities and challenges. As banks were central to
the demonetization process—handling deposits, withdrawals, and currency
exchanges—they played a crucial role in managing the transition from old to new
currency. Here’s a breakdown of how demonetization affected India’s banking
sector:
1. Surge in Deposits and Liquidity
- Large Influx of Deposits: With 86% of the
currency withdrawn from circulation, individuals and businesses deposited their
cash holdings into bank accounts. This led to an unprecedented surge in bank
deposits, providing banks with significant liquidity.
- Short-Term Liquidity Surge: The surge in
deposits enabled banks to reduce their borrowing needs from the Reserve Bank of
India (RBI) and to offer loans at lower interest rates due to the increased
funds. Many banks reduced their fixed deposit interest rates and began offering
more competitive loan rates.
- Challenges of Utilization: Although
deposits increased, demand for loans remained subdued in the short term due to
economic disruptions caused by demonetization. Banks faced challenges in
effectively deploying the sudden liquidity, especially given pre-existing
issues like non-performing assets (NPAs).
2. Increase in CASA Deposits
- Current and Savings Account (CASA) Growth:
The influx of cash led to a substantial increase in CASA deposits, which are
generally low-cost funds for banks compared to fixed deposits. This improved
the overall cost structure for banks, allowing them to operate with more
affordable funds.
- Temporary Spike: The increase in CASA
deposits was somewhat temporary, as much of the cash inflow was withdrawn once
cash availability stabilized. However, banks did manage to retain a portion of
these deposits, helping strengthen their deposit base in the medium term.
3. Push for Digital Banking and Financial
Inclusion
- Accelerated Digital Banking Growth: With
cash in short supply, demonetization accelerated the shift to digital payments.
Banks saw a rise in the use of online banking, mobile banking, and digital
wallets, and expanded their digital infrastructure to meet this growing demand.
- Financial Inclusion Efforts: Banks were
encouraged to open accounts for those without banking access, increasing
financial inclusion efforts. This period saw increased use of the Jan Dhan
accounts (basic no-frills accounts for the unbanked), although many of these
accounts later saw dormant status once the initial period passed.
4. Operational Challenges and Increased
Workload
- Heavy Workload and Logistical Issues:
Demonetization placed a massive burden on the operational resources of banks.
Bank staff had to manage long queues, deposit and withdrawal limits, and a
constant flow of customers seeking currency exchange.
- Extended Working Hours: Bank employees
worked extended hours to meet demand, with branches often experiencing
overcrowding and high-stress situations. This workload and the shortage of new
currency notes strained bank operations and impacted employee morale and
productivity.
- ATM Recalibration: ATMs across the country
needed recalibration to dispense the new 500 and 2000 rupee notes, which took
several weeks and affected service levels. This led to cash shortages in ATMs,
further exacerbating the inconvenience for customers.
5. Non-Performing Assets (NPA) Situation
- Impact on Lending and NPA Management:
Although demonetization created liquidity for banks, it did not necessarily
lead to increased lending. Many businesses, especially small and medium
enterprises (SMEs), were adversely affected by the cash crunch, leading to a
temporary slowdown in demand for credit.
- Increased NPA Risks: The economic slowdown
following demonetization, particularly in the cash-intensive informal sector,
increased the risk of loan defaults. The banking sector, already grappling with
high levels of NPAs prior to demonetization, faced additional pressure as the
economic impact of demonetization contributed to stress among certain borrower
segments, especially SMEs.
6. Reduction in Cash Dependency and Compliance
Focus
- Enhanced Banking Compliance: With more
cash flowing into formal channels, banks were required to adhere to enhanced
compliance standards for cash deposits, withdrawals, and large transactions,
aimed at tracking and discouraging black money circulation.
- KYC Norms and Account Monitoring: Banks
increased their focus on Know Your Customer (KYC) compliance, monitoring
accounts for unusual activity as individuals attempted to deposit large amounts
of cash. This placed additional compliance demands on banks, which needed to
report suspicious activity to authorities.
7. Shift in Consumer Banking Behavior
- Encouragement of Savings and Account
Activity: The surge in deposits and push for digital transactions encouraged
customers to keep their money in bank accounts rather than hoarding cash. This
led to a slight cultural shift in savings behavior, as people became more
accustomed to using banks for transactions.
- Growth in Retail Banking Products: With
higher liquidity, banks could expand their retail lending portfolios. While
short-term demand for loans was muted, banks gradually started offering more
competitive rates on retail products like home loans, personal loans, and
vehicle loans, hoping to increase credit growth.
8. Profitability and Interest Rate Dynamics
- Reduced Margins on Loans and Deposits: The
influx of low-cost deposits and surplus liquidity allowed banks to reduce
lending rates, which benefitted borrowers. However, it also meant narrower
margins for banks as interest rates on loans decreased.
- Impact on Profits: The costs of handling
demonetization—additional staffing, increased compliance and security measures,
and operational disruptions—affected banks’ profitability in the short term.
However, the increase in deposits, especially in CASA, somewhat offset these
costs.
9. Policy and Regulatory Changes
- Increased RBI Oversight: The Reserve Bank
of India (RBI) played a significant role during demonetization, guiding banks
on exchange and deposit limits, compliance measures, and handling liquidity.
The process revealed operational challenges and led to discussions on improving
policy and response mechanisms for future crises.
- Focus on Financial Stability:
Post-demonetization, banks faced pressure to strengthen financial stability and
improve risk management processes. The emphasis on financial stability
highlighted the need for banks to be prepared for abrupt shifts in policy or
market conditions.
Conclusion: Lasting Impacts on India’s Banking
Sector
Demonetization
brought about a period of rapid change and disruption in India’s banking
sector. While it created a short-term surge in deposits and encouraged a shift
towards digital banking, these changes were met with several operational and
economic challenges. The strain on resources, increased compliance demands, and
impact on NPAs were significant issues that banks had to manage.
In
the long term, demonetization did help strengthen financial inclusion and
digital banking, with a more gradual increase in digital payments and greater
acceptance of formal banking channels. However, it also underscored the need
for a balanced approach in economic policymaking, especially for policies with
far-reaching consequences for the banking sector and the economy as a whole.
===
Unplanned trials:
For one all the black
money is not stored in the form of cash only and secondly, the measure takes
care of the result but not the cause-black money is generated mainly because of
corruption and tax evasion. This measure controls the usage of black money but
cannot control the causes
Sudden and huge demand
for the new currencies
Panic amongst the
common man (already we have seen the case wherein people have looted fair price
shop in MP, Cash Carrying companies seeking higher insurance, etc). already the
panic has led to people hoarding currencies which have further reduced the
liquidity in the market
The small
trade/shopkeepers are facing difficulties
Black marketing of the
new notes/currencies is on the rise
The establishments such
as banks, hospitals, etc are under a lot of stress
Another area that is a
cause of worry is the likely drop in the rural demand as the cash usage will
become restricted. Apart from this, the experts are also expecting an impact on
the SME sector, agricultural production (the economy was expected to perform
well as there was an expectation of a good rabi crop after two bad monsoons but
a prominent economist, Pronab Sen has said that demonetization is akin to third
bad monsoon year as it will have an impact on agricultural production, but the
more dangerous situation is this having a spillover effect on to fertilizer,
tractor sectors)
Challenges and difficulties faced:
The coverage of the
banking sector-
Only 27% of the
villages have a bank within 5 Kms (as per Economic Survey 2015-16)
Despite recording
breaking implementation of JDY, the banking penetration is low-on an average
46% in all the states (as per Economic Survey 2015-16)
Another challenge in
implementing and eradicating black money would be the presence of the informal
economy. It accounts for 45% of GDP and 80% of employment hence this move may
have a greater impact on the informal economy
Logistics and cost
challenges of replacing all the Rs 500 and Rs 1000 notes – as per the RBI
documents this measure would cost at least Rs 12000 crore as it has to replace
over 2300 crore pieces of these currencies
The decision to issue
Rs 2000 denomination currency and withdrawal of Rs 500 and Rs 1000 currency
will lead to huge challenge as most of the day to day transactions in India are
centered around Rs 500 note (more than 47% of the value of notes in circulation
is in Rs 500 note form)
The availability of Rs
500 and Rs 1000 notes will be the biggest challenge as both of them covered
over 85% in terms of the value of total currencies issued
The process has led to
huge rush and long queues of the people in front of ATMs and as per the
statement of the finance minister the ATM recalibration would take around 2 to
3 weeks
As per data furnished
by the Finance Ministry, Rs 17,50,000 crore worth of currency notes were in
circulation in October-end, out of which over 85% percent or Rs 14,50,000 crore
is in the now-defunct Rs 500 and Rs 1,000 notes. So far for the first four days,
the government has been able to pump in Rs 50000 cr (on an average 12500 Cr).
====
Demonetization
in India, carried out in November 2016, had far-reaching impacts on the
economy. The abrupt withdrawal of 500- and 1000-rupee notes, which comprised
around 86% of the currency in circulation, aimed to combat black money, curb
counterfeit currency, and promote digital payments. While it initially gained public
support as an anti-corruption measure, the outcomes have since been widely
debated. Here’s a breakdown of the major economic impacts:
1. Immediate Contraction of Economic Activity
- Cash Shortage: The sudden removal of
high-value currency caused a severe cash shortage, hitting the cash-dependent
informal sector and rural areas the hardest. Sectors like agriculture, retail,
and small-scale manufacturing, which primarily operated in cash, experienced
disruptions in production, sales, and wages.
- GDP Slowdown: India's GDP growth rate fell
sharply in the quarters following demonetization, with estimates suggesting a
loss of around 1.5-2% of GDP growth in the short term. The informal sector was
particularly affected, as it relies heavily on cash transactions.
2. Impact on Small Businesses and the Informal
Sector
- Cash-Based Businesses Struggled: Small and
medium enterprises (SMEs) and the informal sector, which employ a large portion
of India’s workforce, were disproportionately impacted. These businesses, which
usually operate with limited cash reserves, faced challenges in paying
employees, purchasing supplies, and maintaining operations.
- Job Losses: Due to reduced cash flow, many
small businesses were forced to cut jobs or close temporarily. This led to
temporary but significant job losses, especially among daily wage earners,
casual laborers, and those in low-income brackets who could not adapt quickly
to digital payments.
3. Digital Payments and Financial Inclusion
- Growth in Digital Transactions:
Demonetization gave a temporary boost to digital transactions, as people
adapted to mobile wallets, online banking, and card payments. This marked a
significant shift toward digital financial services and encouraged innovations
in payment technology and fintech.
- Sustainability Challenges: While digital
payments saw a rise, the adoption was not entirely sustained once cash
availability normalized. Cash remained the preferred medium of transaction,
especially in rural areas. However, demonetization did increase the overall
awareness and usage of digital payments, which continued to grow gradually
thereafter.
4. Impact on Black Money and Counterfeit
Currency
- Limited Success in Curbing Black Money:
One of the main objectives was to combat black money held in cash. However, the
Reserve Bank of India (RBI) reported that 99.3% of demonetized currency was
returned to banks, indicating that most cash holdings were either legitimate or
successfully laundered into the system.
- Counterfeit Currency: There was an initial
decrease in counterfeit currency as old notes were invalidated. However,
counterfeiters quickly adapted to the new denominations, and by 2018, fake 500-
and 2000-rupee notes were again in circulation. This suggested that
demonetization had only a temporary impact on counterfeit currency.
5. Banking Sector Effects
- Increased Deposits and Liquidity: With
most of the demonetized currency deposited into bank accounts, banks saw a
substantial surge in deposits. This improved liquidity allowed banks to reduce
lending rates and increase lending activity in the medium term.
- Operational Strain: Banks faced immense
pressure to process the high volume of deposits, withdrawals, and currency
exchanges. Additionally, banks incurred significant costs in recalibrating ATMs
and managing cash logistics, which affected their profitability.
6. Impact on Consumption and Investment
- Reduced Consumer Spending: The cash
shortage negatively impacted consumer spending, particularly on non-essential
goods and services. This slowdown in consumption hit sectors like real estate,
automobiles, jewelry, and retail, which experienced decreased demand.
- Delayed Investments: With businesses
grappling with cash flow disruptions, many postponed planned investments,
particularly in the small and medium enterprise (SME) sector. The uncertainty
surrounding the economy during demonetization also led to cautious spending and
investment behavior among both businesses and consumers.
7. Real Estate and Housing Market Decline
- Impact on Real Estate: Real estate, a
sector often associated with cash transactions and informal dealings, saw a
sharp decline in transactions. Property prices in some areas dropped
temporarily, and the sector took longer to recover due to the drying up of cash
flow.
- Long-Term Reforms: Demonetization, along
with subsequent policies like the Real Estate (Regulation and Development) Act
(RERA) and the Goods and Services Tax (GST), pushed the real estate sector
toward greater transparency and formalization. However, the initial impact was
a significant reduction in transactions and project delays.
8. Agricultural Sector Challenges
- Disruption in Rural Economy: The
agricultural sector, where cash transactions dominate, was heavily affected.
Farmers faced difficulties selling produce, purchasing seeds, and paying
laborers due to limited cash availability.
- Delayed Rural Payments: Many rural
households, including farmers, were not fully integrated into the banking
system and had limited access to ATMs. This led to delays in rural payments,
impacting agricultural productivity and rural incomes.
9. Increase in Tax Compliance and
Formalization
- Higher Tax Filings: Demonetization led to
an increase in tax filings and compliance as more cash transactions entered the
formal financial system. The government reported an increase in tax collections
and filings in the years following demonetization.
- Formalization of Economy: Some informal
businesses were pushed toward formalization as they had to open bank accounts,
maintain records, and file taxes to access their funds. This was one of the
lasting effects of demonetization, as it accelerated the shift toward a more
formalized economy.
10. Inflationary and Monetary Policy Impacts
- Short-Term Deflationary Impact: The
contraction in demand following demonetization led to a temporary decrease in
inflation rates. However, as the economy recovered, inflation rates returned to
pre-demonetization levels.
- Monetary Policy Adjustments: The RBI had
to adjust its policies to manage the excess liquidity in the banking system,
implementing measures like the issuance of cash management bills and adjusting
the reverse repo rate to manage inflationary pressures.
Long-Term Perspective on Economic Impact
While
demonetization had several immediate adverse effects on India’s economy, it
also led to some long-term changes, particularly in terms of promoting digital
payments and formalizing parts of the informal economy. However, the intended
goals—curbing black money, reducing counterfeit currency, and discouraging
corruption—were only partially achieved.
In
hindsight, demonetization is often viewed as a disruptive policy with limited
effectiveness in achieving its stated goals. Its economic impact underscores
the importance of careful planning, thorough risk assessment, and phased
implementation in large-scale economic reforms to minimize unintended
consequences.
===
Yes, one
of the main criticisms of India's 2016 demonetization policy is that it largely
failed to achieve its objective of reducing black money. According to data from
the Reserve Bank of India (RBI), around 99.3% of the demonetized 500- and
1000-rupee notes—amounting to approximately ₹15.31 lakh crore out of ₹15.41
lakh crore in circulation—were returned to the banking system.
This
statistic contradicted initial expectations. When demonetization was
implemented, it was assumed that a significant portion of the black money held
in cash would not be returned to the formal banking system, as people with
illicit wealth would be unable or unwilling to declare and deposit their
unaccounted cash. However, nearly all of the withdrawn currency made its way
back to the banks. Here’s why demonetization had limited success in curbing
black money:
1. Mechanisms for Cash Laundering
- People holding unaccounted cash found ways
to convert it into legitimate money through various means: using proxies (known
as "money mules") to deposit cash into their accounts, making small
deposits across multiple accounts, or using businesses to disguise illicit
funds as business income.
- Gold purchases, property transactions, and
even fictitious loans were utilized to convert cash holdings into legal assets
during the demonetization period.
2. Black Money Is Not Primarily Held in Cash
- A significant portion of black money in
India is held in non-cash assets like real estate, gold, and foreign bank
accounts, which were untouched by demonetization.
- High-value assets and investments in
offshore accounts or shell companies are common methods of holding black money,
which demonetization did not address.
3. Recycling of Cash into the System
- A large number of people holding black
money managed to recycle their cash holdings by depositing it in others’
accounts, especially through Jan Dhan accounts (bank accounts primarily for
low-income individuals). In many cases, they offered a commission or fee to
individuals in exchange for making deposits on their behalf.
4. Impact on Genuine Cash Holders
- Instead of curbing black money,
demonetization often impacted small traders, daily wage workers, and rural
households more severely, as these groups typically depend on cash savings and
lack access to banking facilities. For these populations, the invalidation of
high-denomination currency was disruptive to daily life and livelihoods.
- Meanwhile, those with black money were
often able to find ways to launder their cash, meaning that much of the actual
unaccounted wealth continued to circulate in the economy.
5. Temporary Impact on Counterfeit Currency
and Terror Financing
- While demonetization temporarily reduced
counterfeit currency, it was a short-lived effect. Counterfeiters adapted and
began circulating fake notes in the new 500 and 2000 denominations within a few
months.
- Terror financing and other illicit
activities also adapted to alternate methods of funding, which mitigated the
long-term impact that demonetization could have had on these activities.
6. Increased Tax Compliance and Formalization
of Some Sectors
- Although demonetization didn’t
substantially curb black money, it did lead to an increase in tax compliance
and filings in the following years, as more cash transactions came under
scrutiny. There was also a push toward financial inclusion, with new bank
accounts being opened, especially in rural areas.
- However, while this formalization did
increase the scope of banking and digital payments, it didn’t fundamentally
solve the problem of black money stored in non-cash forms.
Conclusion: Limited Success in Targeting Black
Money
In
hindsight, demonetization had only a limited impact on black money. The vast
majority of demonetized notes were returned to the banks, indicating that
people holding large sums of cash were able to launder it. The expectation that
black money holders would abandon their cash didn’t materialize, and it became
evident that black money in India is predominantly stored in non-cash assets,
which demonetization failed to address.
====
5. The betrayal of farmers
Farmer suicides rose sharply during the Modi government’s tenure. In its final budget, the BJP on the demand of minimum support price plus 50%, gave a version that satisfied no one. In parallel, the Modi government imported wheat and pulses without thought – leading to the prices of domestic produce crashing. Add to this – the ill-advised venture to amend the land acquisition Act of 2013; to forcibly acquire the land of farmers.
Farmers have resorted to all manner of agitations to catch the BJP government’s attention. They have marched and held large scale agitations thrice this year. They have brought the mortal remains of their brethren, who committed suicide, to shock this government into action. The children of those farmers who took their own lives held peaceful protests barely a kilometre away from parliament. Not a single representative from the BJP Government deigned to meet with any of them or even acknowledge their presence.
6. Rafale deal :
The prime minister and his cohorts changed the terms of a deal to acquire fewer jets for three times the price without following the stipulated procurement procedure. When cornered with questions, the government chose to attack the opposition and cite rules of privacy which were contradicted by the French president in an interview to an Indian channel. The Rafale controversy attracts questions also because of the selection of a private party as an offset partner – one who lacked any qualifications in this regard, except for an obvious proximity to the Prime Minister.
7. Media capture:
There has been an enslavement of certain sections of the media which simply choke on any criticism no matter how innocuous of the prime minister and the BJP president. If a channel is less than pliant, it is blacked out for 24 hours, its premises are raided, or the offending journalists are mysteriously made to go on sabbatical or removed outright.
Media capture in India refers to the undue influence or control exerted over media institutions by powerful interests, which often leads to biased reporting, censorship, and erosion of journalistic independence. This phenomenon, though not unique to India, has become a matter of significant concern in recent years as media capture can undermine democratic principles by restricting the free flow of information and limiting diverse viewpoints. Here’s a breakdown of how media capture manifests in India and its implications:
1. Corporate Ownership and Influence
- Consolidation of Ownership: In India, a
handful of large corporations own a significant portion of the media landscape,
including television channels, newspapers, and digital outlets. This
concentration of ownership limits the diversity of viewpoints and increases
susceptibility to biases, as owners often have vested interests aligned with
political or economic agendas.
- Cross-Ownership: Some media conglomerates
also own businesses in other sectors, such as real estate, energy, and
telecommunications, creating conflicts of interest. These companies may avoid
reporting on issues that could negatively impact their non-media interests.
List of news media ownership in India :
- Advertising Dependence: Media outlets rely heavily on advertising revenue, a large portion of which comes from corporate advertisers and the government. This reliance can lead to favorable coverage for advertisers or self-censorship to avoid losing revenue.
2. Political Influence and Censorship
- Direct Ownership and Control: Politicians
or political affiliates directly owning media outlets is a common practice in
India. Such control allows political figures to shape narratives, influence
public opinion, and suppress unfavorable news.
- Government Pressure: The Indian
government, through its advertising budget, exerts substantial influence over
the media. The government is one of the largest advertisers in India, and media
outlets that are critical of government policies may face a reduction in
advertising revenue or other retaliatory measures.
- Legal Tools for Suppression: Laws like the Unlawful Activities (Prevention) Act (UAPA), sedition laws, and defamation charges have been used to target journalists and news organizations critical of the government, fostering a culture of fear and self-censorship.
3. Editorial Bias and Agenda-Driven Journalism
- Lack of Editorial Independence:
Journalists and editors often face pressure from media owners or external
forces to align coverage with specific political or ideological leanings. This
lack of independence results in selective reporting and a narrowed range of
perspectives.
- Sensationalism and TRP-Driven Content: The competition for Television Rating Points (TRPs) incentivizes sensationalism over serious journalism. Issues of national importance may be sidelined in favor of sensational stories that are more likely to attract viewers, often diverting attention from pressing social, economic, and political issues.
4. Challenges Faced by Independent Media
- Limited Reach and Funding: Independent
media outlets in India, particularly those operating in digital spaces, often
have limited reach compared to mainstream media. They also struggle with
funding, as advertisers may shy away from associating with platforms that
produce critical or investigative content.
- Harassment and Intimidation: Journalists and editors working with independent media frequently face harassment, including online abuse, threats, and even legal cases aimed at stifling critical reporting. This makes it increasingly difficult for independent outlets to operate freely and objectively.
5. Digital Media and Social Media Manipulation
- Astroturfing and Disinformation: Social
media platforms in India are often used to disseminate false information or
amplify certain narratives favorable to specific political groups. Organized
campaigns may involve "troll armies" or bots spreading disinformation,
drowning out genuine voices and creating a skewed public perception.
- Government Regulations on Digital Media: New rules under the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, have expanded government oversight over digital news platforms and social media. These regulations have raised concerns over privacy, editorial independence, and the potential for excessive government control over digital news content.
Implications of Media Capture on Democracy in
India
The rise of media capture in India poses risks to democratic processes and informed citizenry. With fewer avenues for unbiased information, citizens may receive a distorted view of reality, which can weaken democratic discourse, civic engagement, and accountability. This media environment can also exacerbate social divides by promoting certain narratives and silencing others, which can polarize public opinion and fuel mistrust.
Possible Solutions and Reforms
- Promoting Independent and Public Interest
Journalism: Supporting independent media through public donations, grants, and
international collaborations can help counterbalance the influence of large
conglomerates.
- Strengthening Regulatory Frameworks:
Independent and transparent regulatory bodies could play a role in preventing
monopolistic practices in media ownership and ensuring editorial independence.
- Media Literacy and Awareness: Educating the public about media bias, disinformation, and the importance of diverse viewpoints can empower citizens to critically analyze media content and seek out unbiased information.
In sum, media capture
in India threatens the objectivity of news reporting, the diversity of voices
in the public sphere, and the democratic principles of transparency and
accountability. Addressing it will require systemic changes and a commitment to
preserving a free and independent press.
==
8. Weakening of institutions & profiteering Organization:
The parliament is an inconvenience to this government which prefers to rule by fiat and ordinances. The prime minister rarely attends parliament, and when he does it is more to give electoral speeches than to lay out a legislative agenda or answer questions raised on the floor of the House. The promised Lokpal is so artfully forgotten that an irate Supreme Court has to direct action. An audacious chief minister promptly upon assuming office withdraws all criminal cases against himself and no one blinks. Electoral transparency is promised while bringing in unaccounted funding through regressive and opaque electoral bonds. The CBI is in the throes of a battle for credibility. The list goes on.
9. The cultivation of hate:
There has been a sharp increase in targeted attacks on Dalits and members of the minority community. What makes these attacks unique is the state endorsement to the attackers when ministers garland them or reverentially attend their funerals. The message of support is lost on no one. In fact, the only coherent thread running through this government’s term has been the othering of a certain section of India. People who are blessed to be followed by the prime minster share only one other thing in common. They are defiantly communal and abusive. Almost as if they have official sanction.7.
10. The mishandling of Kashmir
This government deserves the credit of having alienated the Kashmiri people from the rest of India through a poorly thought out engagement policy. For the first time, since the 1996, by-elections could not be held in the district of Anantnag and had to be delayed because of the tense situation. Eight month long curfews destroyed the local economy. Worse still, there was a marked increase (72%) in the number of our soldiers martyred in just the first three years of the BJP’s term. The extremely inept handling of Kashmir deserves a study unto itself.
11 February 2019 – Pulwama suicide attack resulting in death of 40 CRPF personnel while Narendra Modi was shooting for Discovery in Jim Corbett National park.
12. Ban on Triple talak : 25-30 July 2019 – The Muslim Women (Protection of Rights on Marriage) Bill, 2019 bill which will ban Triple talaq was passed by Lok Sabha on 25 July 2019[29] and then by Rajya Sabha on 30 July 2019,[30] and received the presidential ascent soon thereafter. The bill stands to be retrospectively effective from 19 September 2018
13. Article 370 : August 2019– Home Minister Amit Shah moved a presidential resolution to scrap Article 370 in the Rajya Sabha,[31] and also a bill to reorganize the state, creating the new union territories of Jammu and Kashmir and Ladakh.
14. Ram Janmabhoom November 2019– India's Supreme Court rules to hand over the disputed site (2.77 acres) to a government-created trust to built the Ram Janmabhoomi temple, it also ruled to the government to provide an alternate 5 acres of land to the Sunni Waqf Board to built a mosque.
15. Electoral bonds make political donations opaque, but the Modi government says they bring transparency. The full list of the Modi government’s lies could fill a library. Electoral Bonds were a mode of funding for political parties in India from their introduction in 2017 till they were struck down as unconstitutional by the Supreme Court on 15 February 2024. Electoral bond would be issued/purchased for any value, in multiples of `1,000, `10,000, `1,00,000, `10,00,000 and `1,00,00,000 from the specified branches of the State Bank of India (SBI)
16. CA / NRC : Narendra Modi said on the top of his voice that there had been no talk of a National Register of Citizens (NRC) in his government, when in fact both the President of India and the Home Minister had said it in Parliament.
17. EVM machines and Election commission:
EVM Machine and VVPAT have always been the bone of contention between winning and losing side. There are about 120 countries that practice democracy. Of these, only about 25 have experimented with or used electronic voting machines to elect their governments. A cyber expert from the US has claimed that machines can be hacked. The cyber expert will display the live hacking of EVMs at an event today. Even the BJP has questioned the credibility of these machines when it was in Opposition.
The first resolution was on EVM and VVPAT counting in which they said that it is recognised that purely EVM-based voting and counting does not comply with "democracy principles" which require that each voter should be able to verify that his or her vote is cast-as-intended; recorded-as-cast and counted-as-recorded. They claimed electronic voting machines (EVMs) cannot be assumed to be tamper-proof. "The voting process should be redesigned to be software and hardware independent in order to be verifiable or auditable. The VVPAT (voter verifiable paper audit trail) system should be re-designed to be fully voter-verified. A voter should be able to get the VVPAT slip and cast it in a chip-free ballot box for the vote to be valid and counted," the resolution stated. It is said that software inside the chip is playing vital role for those who wants to manipulate Election via EVM. If Indian public is suspicious about the Election via EVM then, it is better to go for Ballot Papers, so that they could be confident enough that elected Government is elected by them to rule the country.
- Beti Bachao-Beti Padhao,
- Swachchh Bharat Mission,
- PM Mudra Yojna,
- Atal Pension Yojna,
- Smart city scheme,
- Make in India
|
Scheme / programme |
Starting date |
Objective of Scheme |
|
1. Jan Dhan Yojna |
28 August, 2014 |
To connect more and more
peoples from the banking services |
|
2. Skill India
Mission |
28 August, 2014 |
Skill Development in Youth |
|
3. Make in India |
28 September, 2014 |
Promoting manufacturing Sector
in the country |
|
4. Swachh Bharat
Mission |
2 October, 2014 |
Making India a clean country
till October 2, 1919 |
|
5. Sansad Adarsh
Gram Yojana |
11 October, 2014 |
Development in the villages
which includes social development, cultural development. |
|
6. Shramew
Jayate Yojana |
16 October, 2014 |
Plan dedicated to labour
development |
|
7. Beti Bachao
Beti Padhao |
22 January, 2015 |
The goal of this scheme is to
make girls socially and financially self-reliant through education. |
|
8. Hridaya Plan |
21 January, 2015 |
To take care of world heritage
sites and to make these sites economically viable. |
|
9. PM Mudra Yojna |
8 April , 2015 |
Loan to small businessmen from
50 thousand to 10 lakh |
|
10. Ujala Yojana |
01-May-15 |
Distribution of LED bulbs at a
low price to reduce electricity consumption |
|
11. Atal Pension
Yojna |
9 May, 2015 |
Monthly pension for people from
the unorganized sector b/w age of 18 to 40 years |
|
12. Prime
Minister Jyoti Jyoti Bima Yojna |
9 May, 2015 |
Life Insurance of Rs. 2 lakh
for people b/w 18 to 50 years (@Premium of Rs. 330 per annum) |
|
13. Pradhan
Mantri Suraksha Bima Yojana |
9 May, 2015 |
General insurance/accident
insurance for people between 18 and 70 years of 2 lakh (at a premium of 12
Rs. / year) |
|
14. Smart city scheme |
25 June, 2015 |
Developing 100 selected cities
of the country as smart cities from 2015 to 2020 |
|
15. AMRUT Plan |
25 June, 2015 |
Developing all the basic
amenities in more than 500 cities which have more than one lakh population |
|
16. Digital India
Mission |
2 July, 2015 |
Making all government services
electronically available to the public |
|
17. Gold
Monetization Scheme |
5 November, 2015 |
Putting inoperative gold (lying
at home and lockers) in productive works. |
|
18. Sovereign Gold Bond Scheme |
5 November, 2015 |
To check the real demand of
Gold; government introduced the Sovereign Gold Bond Scheme. |
|
19. UDAY |
20th November, 2015 |
Financial turnaround of Power
Distribution Companies of Public Sector |
|
20. Start-up
India |
16 January, 2016 |
To Promote new enterprises |
|
21. Setu Bhartam
Yojna |
4 March , 2016 |
Construction of Over and Under
Bridge to make National Highways Railway Crossing free |
|
22. Stand Up
India |
5 April, 2016 |
Loans up to 10 lacs to 1 crore
for establishment of new companies to Scheduled Castes / Tribes and Women
Entrepreneurs |
|
23. Gramoday Se
Bharat Uday |
14-24 April 2016 |
Emphasizing the development of
villages for proper development of the country |
|
24. Prime Minister Ujjwala Plan |
1 May, 2016 |
Providing the LPG connection to
BPL families at subsidized rates |
|
25. Namami Gange
Yojana |
7 July, 2016 |
Cleanliness of river Ganga |
- Poor industrial growth
- Poor educational facilities
- Poor healthcare facilities
- Unemployment growth
- Increase in Caste based politics
- Increased violence and attacks on minorities
- Financial Scams or Scandals
- Meaningless policies
- Rise in price of petrol ,Diesel, Cooking oil and food products.
- Mismanagement of covid patients / Supply of oxygen cylinder.
- Resentment of the farmers or attack on protesting farmers.
- What happened to swach Bharat abhiyan? I see no where strict laws been implemented to execute this. Just a publicity stunt, nothing else.
- Why on Earth petrol prices have not gone down despite international crude oil rates at all time low in recent years.
- Demonetization : I know many of you have so many things to say but don't you think it was just another minor progressive looking move just to keep all you guys excited about the current gov. Nothing much yeilded.
- People voted for this gov so that people like Vijay mallaya should be behind the bar and not making mockery of India at International level. Why such inequality?
- What is been done under this gov to improve the education system ? Anything ? Have you heard of something.
- There was one such yojana from our PM in which Rs.6000 will be given as cash or in their accounts to the pregnant ladies. How on Earth is this a progressive move? People who are poor because they are not willing to do anything. I mean dont it makes sense that instead of this gov should have an initiative for poor people.
- BJP consists of shrewd politicians. Be it Amit shah, Modi himself. They are creating such a scenario that they want any voices against them to be voided. For this happen they use social media ( FB, Twitter ). Remember Modi always knew the power of social media. They just conquered it fooling people with a feeling that they are the party with full of nationalism. Has any body noticed since the BJP came to power people have suddenly started thinking ,about sharing support on social media to Indian Army via top viwed pages. This BJP it cell, it works so shrewdly. Remember Tej bahadur Yadav ? The armymen that exposed the quality of food ? Has he been given justice ? Did the quality of the food improved? I doubt but to show or rather to market himself as a nationlist our PM visits Siachin soldiers on Diwali.
- Appointment of Ram Nath Kovind purely on caste is sheer hypocrisy on behalf of a party who voiced not to support casteism in India.
- LPG raised prices, Opposing GST and now implementing it are some more examples.
- Black Money: how much black money came back from Swiss banks or was it another marketing stint to keep you people excited?
- I was a supporter of BJP and AAP , but fell in the trap of social media and started criticizing AK for his baffling of Modi which I now understand that it was all true. Though he too was wrong on his part but such is politics.
- But now , I don't care about what nonsense AK has to say about Modi. His work speak volumes. Emphasis on education and health sector is one progressive move. Where are such steps from Modi ? What you ll find is complete marketing and work done or rather implementation is zero.
- I know there will be voices saying nothing happens overnight things will change timely. But did people really voted and voted espically to listen to what we have been listening over past few decades?
- What I see is only words no actions. No education for poor no health reforms no cleanliness but Back to the ideology of old days .
- Modi government has just looted the common man belonging to poor, lower middle class and also middle class of country by decreasing subsidies and increasing indirect tax in the name GST which varies upto maximum of 28% plus cess. This government not only has kept petroleum products out of purview of GST but increasing excise duty on it as and when price of crude oil decreased in international market and denying consumers the benefits of lower crude oil prices. This government is so insensitive towards poor people of the country who are worst sufferers due to increase in indirect taxes to such a level.
- We have seen Narendra Modi while campaigning in Gujarat and Himachal Pradesh state election taking credit of saving 57 thousand crore by linking Aadhar with different subsidy linked schemes meant for BPLs but taking no responsibility of hunger deaths in different states due to denial of ration to these uneducated tribal people due to this Aadhar linkage.
- This country has never witnessed a Prime Minister like Modi who is 20% PM and 80% Election campaigner of BJP and misleading people by saying he works 15 hours a day as Pradhan Sewak of nation. He also misleads people by always speaking lies. There are many such proof of it but here I would like to share a latest one while campaigning for Gujarat and Himachal Pradesh state Elections. Taking the credit of Demonetisation (a false one) Modi is blaming Mrs. Indira Gandhi for not allowing Mr Y B Chauhan to demonetise hundred rupees currency notes which according to this”Jhootha Prime Minister” was the highest denomination at that time to decimate corruption that's why he had to take such a strong step of Demonetisation. Narendra Modi is rightly told by people “An uneducated PM” since either he doesn't know or making people fool while addressing voters with his poorly conceived narrative. The TRUTH is that when Mrs Indira Gandhi was in power, currency with denomination of 1000/-, 5000/- & 10000/- were in force and Mr Morarji Desai had chosen to cancel them in 1978 though it was only 20% of cash circulating at that point of time.
- Now, we can see that people of India always believe their Prime Minister but due to lack of knowledge this”JHOOTHA” PM is propagating these false accusation on the Late Prime Minister Mrs Indira Gandhi to project himself as saviour.
In India, the electoral bonds scheme has drawn significant criticism,
with many labeling it a "scam" due to its lack of transparency and
potential misuse. The scheme, introduced in 2018, was designed to allow
individuals and corporations to anonymously donate to political parties through
bonds purchased from the State Bank of India (SBI). The funds largely flowed to
the ruling Bharatiya Janata Party (BJP), which reportedly received over 50% of
the total funds generated, raising concerns about favoritism and the dominance
of money in politics.
Critics argue that electoral bonds allow for unchecked, anonymous
donations that can be used to buy political influence, potentially impacting
public policy. Allegations from prominent figures, such as lawyer Prashant
Bhushan, suggest that certain corporations used these donations as bribes to
secure government contracts or avoid regulatory action. Bhushan called for an
independent investigation, citing examples where companies donating significant
amounts saw investigations against them either stopped or delayed. This has led
to calls for an investigation by a Special Investigation Team (SIT) under
judicial oversight to assess the extent of the alleged quid pro quo
arrangements between corporations and political leaders.
The recent Supreme Court ruling that deemed the scheme
unconstitutional emphasized concerns over secrecy and potential misuse of
public funds, reinforcing the demand for transparency in political donations
and accountability among political parties. This ruling has led to heightened
scrutiny of political funding in India, with many advocates urging for systemic
reforms to ensure fair practices in electoral financing.
The situation highlights deep-seated issues in political financing,
where lack of transparency can compromise democratic processes and foster
public mistrust in political institutions.
On March 21, 2024, the State Bank of India (SBI) submitted a detailed
affidavit to the Supreme Court, providing comprehensive data about electoral
bonds sold under the controversial scheme. This data included specific
information such as the unique alphanumeric bond numbers, the bond
denominations, and details identifying which political parties redeemed the
bonds. This disclosure was part of the Supreme Court’s directive, which
followed its February 2024 ruling that deemed the electoral bonds scheme
unconstitutional due to concerns about transparency and accountability.
While the SBI provided bond numbers and redemption information, they
withheld full KYC details and complete bank account numbers of the purchasers
and political parties, citing concerns over account security and privacy. The
Election Commission of India (ECI) is expected to make the information
available on its website for public transparency as directed by the Supreme
Court.
The court's directive emphasized full disclosure to match donors with
recipient parties, aiming to curb potential misuse of political funding. This
disclosure has been pivotal, given past criticisms that the scheme
disproportionately favored the ruling party and allowed for opaque, anonymous
donations that raised ethical and legal concerns over influence on governance
and public policy.
The Supreme Court of India recently ordered the Election Commission
(EC) to make available digitized data on electoral bonds, initially submitted
in sealed covers. This data, covering donations made through electoral bonds,
has been publicly released as per the Supreme Court's mandate from March 15,
2024. The details are organized in two parts on the EC’s website and include
the issuance and encashment of bonds by various political parties. The records
specify the date, denomination, number of bonds, and branch of State Bank of
India (SBI) where bonds were issued, but notably, they do not disclose donor
identities.
=====
The distribution of funds from electoral bonds in India reveals significant disparities among political parties, according to recent disclosures. The Bharatiya Janata Party (BJP) received the largest share, totaling approximately ₹6,061 crore—nearly half of all funds raised via this mechanism. This was followed by the All India Trinamool Congress (TMC) with ₹1,610 crore and the Indian National Congress with ₹1,422 crore. Other prominent recipients included the Bharat Rashtra Samithi (BRS) with ₹1,215 crore and the Biju Janata Dal (BJD) at ₹776 crore. Additional parties that benefitted, though to a lesser extent, include regional parties such as the All India Anna Dravida Munnetra Kazhagam (AIADMK), Shiv Sena, Telugu Desam Party (TDP), Yuvajana Sramika Rythu Congress Party (YSR Congress), Aam Aadmi Party (AAP), Janata Dal (Secular), and Nationalist Congress Party (NCP) among others. These donations were facilitated by large corporations and industrial groups, adding to the ongoing debate around transparency and influence in political financing through electoral bonds.
The
Supreme Court of India, in a landmark ruling on February 15, 2024, declared the
Electoral Bonds Scheme unconstitutional and ordered an immediate halt to its
implementation. This decision was based on concerns about transparency, the
right to information, and political equality. The Court determined that the
scheme infringed upon the freedom of speech and the right to information under
Article 19(1)(a) of the Indian Constitution. Chief Justice D.Y. Chandrachud and
a five-judge bench held that the anonymous nature of the scheme compromised the
public's right to know about political donations, particularly because voters
need access to funding information to make informed choices.
The Court invalidated amendments made under the Finance Act, 2017, to the Representation of People Act, Companies Act, and Income Tax Act that enabled anonymous donations, removed caps on corporate donations, and exempted electoral bonds from disclosure requirements. Furthermore, the Court directed the State Bank of India (SBI) to submit comprehensive details on bonds issued and political party collections since 2019 to the Election Commission of India (ECI), which must publish this information by March 13, 2024.
The Electoral Bonds
Scheme in India has faced substantial criticism from opposition parties,
primarily over issues related to transparency, potential favoritism, and
unchecked influence of corporate money in politics. Here are the main concerns
raised:
1. **Lack of
Transparency and Anonymity**:
Opposition parties, such as the Indian
National Congress and the Communist Party of India (Marxist), argue that the
scheme fosters a lack of transparency, as it allows corporations and
individuals to anonymously donate large sums to political parties. This
anonymity prevents the public from knowing who funds which party, creating
opportunities for untraceable money flows, potentially even foreign funds, into
Indian elections.
2. **Favors the Ruling
Party**:
Critics, including members of the Congress Party and regional political leaders, allege that the scheme disproportionately benefits the ruling party, in this case, the Bharatiya Janata Party (BJP), which has reportedly received the majority of funds from electoral bonds. They argue that the scheme enables the government in power to attract a large share of these anonymous funds, giving it an unfair advantage in elections and raising concerns about an uneven playing field.
3. **Increased
Corporate Influence and Reduced Accountability**:
The scheme permits corporations, even loss-making or newly created ones, to contribute unlimited funds to political parties without a traceable record, following the removal of the cap on corporate donations. This change, opposition leaders argue, opens the door for corporate entities to buy influence, potentially influencing public policy in favor of donors, rather than serving the public interest. Leaders like Rahul Gandhi have voiced concerns that such a system compromises democratic governance by allowing wealthy corporations to influence policy through financial leverage.
4. **Potential for
Money Laundering and Black Money**:
opposition leaders have also raised concerns that the scheme may enable money laundering. Since the identities of donors remain hidden, critics argue that it’s possible for black money or illicit funds to be funneled into political campaigns. This undermines India’s efforts to tackle black money and runs counter to the transparency typically expected in political financing.
5. **Erosion of the
Right to Information**:
Several opposition voices, including public interest groups, argue that the Electoral Bonds Scheme violates citizens’ right to information by denying voters the knowledge of who is financially supporting political parties. This, they contend, hampers voters' ability to make informed choices, as they are unaware of potential influences on party policies and candidates. These critiques have led to widespread calls for reform, including restoring the transparency measures that required political parties to disclose donors for contributions over ₹20,000, which the Electoral Bonds Scheme exempted.
The Supreme Court of India declared the Electoral Bonds Scheme unconstitutional in February 2024, stating that it violated key principles of transparency and equality, which are central to the democratic process. Here are the primary reasons the Court found the scheme unconstitutional:
1. **Violation of the
Right to Information**:
The Court argued that the scheme undermines the Right to Information (RTI) by allowing anonymous donations, which prevent citizens from knowing who funds political parties. This lack of transparency hampers voters' ability to make informed choices, which is essential in a democratic setup. The Court emphasized that political transparency is critical because it enables citizens to understand potential influences on political decisions, thereby fostering a fairer electoral process.
2. **Infringement on
Freedom of Expression**:
The Court cited Article 19(1)(a) of the
Indian Constitution, which guarantees the right to freedom of speech and
expression, including the right of citizens to freely access information about
public matters. The anonymity of donations under the Electoral Bonds Scheme was
seen as a restriction on this right, as it concealed important information that
could affect public debate and discourse on electoral and policy decisions.
3. **Undermining Political Equality**:
The Court ruled that the scheme violated the
principle of political equality, as it favored parties with greater access to
anonymous corporate donations. By removing caps on corporate donations and
allowing unlimited funding without disclosure, the scheme created an imbalance,
giving ruling parties an unfair advantage over opposition parties. This erosion
of a level playing field goes against the democratic ethos of India.
4. **Potential for Black Money and Money Laundering**:
The Supreme Court also raised concerns that
the lack of donor transparency could allow black money and foreign funds to
infiltrate Indian politics. Without a mechanism to track the origins of funds,
there is a risk of money laundering, which further erodes public trust and
risks the integrity of the electoral process.
5. **Unconstitutionality of Amendments to Existing Laws**:
The scheme included amendments to the Representation of People Act, the Companies Act, and the Income Tax Act, which exempted political parties from disclosing donations made via electoral bonds. The Court declared these amendments unconstitutional, as they conflicted with established laws designed to ensure accountability in political funding. Specifically, the amendments removed critical transparency safeguards, such as the requirement for companies to disclose political donations. By striking down the Electoral Bonds Scheme, the Supreme Court has underscored the need for reforms that balance privacy with accountability to protect democratic principles and the right to information in political financing.
Only the State Bank of India (SBI) is authorized to issue and encash electoral bonds under the scheme. This exclusivity was established by the Government of India, which designated SBI as the sole bank responsible for handling these bonds, primarily to centralize and monitor the financial flows associated with political donations.
### Key Details of SBI's Role:
1. **Issuance and Encashment**: SBI issues electoral bonds in specified branches across major cities in India. Individuals and corporate entities can purchase these bonds, which can then be encashed by eligible political parties through their designated SBI accounts.
2. **Denominations and Validity**: Electoral bonds are available in multiple denominations (e.g., ₹1,000, ₹10,000, ₹1 lakh, ₹10 lakh, and ₹1 crore), and each bond is valid for 15 days from the date of issuance. This structure allows flexibility in donation sizes while setting a short validity period to encourage timely transactions.
3. **Anonymity**: Purchasers are required to complete Know Your Customer (KYC) procedures, but their identities remain anonymous to the public and are not disclosed to the political parties. This was intended to protect donor privacy, though it has sparked controversy over the lack of transparency.
4. **Specified Windows for Purchase**: SBI issues bonds during designated windows throughout the year, typically in January, April, July, and October, with additional windows during general elections. SBI's exclusive role has been integral to the scheme's functioning, though it has also placed the bank at the center of debates on transparency and the oversight of political funding in India.
==
As per recent data provided to the Supreme Court of India, the State Bank of India (SBI) has been exclusively responsible for issuing electoral bonds in India, as mandated by the government. SBI released information showing that between April 2019 and February 15, 2024, over 20,421 bonds worth around ₹12,769 crore were bought, with the vast majority encashed by major national parties. Notably, a significant portion of the electoral bond funds—more than 47%—went to the Bharatiya Janata Party (BJP), while other parties, including the All India Trinamool Congress (AITC) and Indian National Congress (INC), received a substantial but smaller portion of these funds.
The Election Commission of India (ECI) published detailed records of electoral bonds issued in response to Supreme Court orders, which directed public transparency regarding the scheme. The records include phase-by-phase purchases and encashment data, documenting the inflow of funds anonymously through these bonds, as highlighted by the Association for Democratic Reforms (ADR) in its analyses. This transparency, prompted by recent court directives, is part of ongoing scrutiny and legal debate about the scheme’s implications for democratic integrity and transparency in political funding in India. For a deeper look into the phase-wise data, and party-specific funding allocations, you can explore the information provided by the ECI on its official site or refer to reports on the scheme’s broader implications on platforms like Business Today and ADR India.
==
The Electoral Bonds Scheme in India has been criticized for creating conditions that could indirectly enable extortion or exert pressure on corporate donors. While there’s no direct evidence of extortion, critics and opposition parties argue that the scheme’s design creates opportunities for undue influence and potential coercion, particularly because it lacks transparency and centralizes information about donors.
Here are the main concerns linking the scheme to potential risks of extortion:
1. **Centralized Information and Donor Privacy**:
Under the scheme, the State Bank of India (SBI) is the sole issuer of electoral bonds, and only the government and SBI know the identities of donors. Since political parties can receive these funds without disclosing donor identities, this setup theoretically allows the government to trace and track donors. Critics argue that this lack of transparency could allow ruling authorities to pressure or indirectly coerce corporations or wealthy individuals into donating to specific political parties, effectively enabling a form of "soft extortion" under threat of potential consequences.
2. **Concerns of Favoritism and Influence**:
Opposition parties and transparency advocates, including the Association for Democratic Reforms (ADR), argue that the scheme disproportionately benefits the ruling party, which has received the majority of funds through electoral bonds. This funding disparity, combined with anonymous contributions, is seen as a mechanism for donors to curry favor with those in power, as they may fear negative consequences (such as regulatory scrutiny or losing government contracts) if they do not comply. Such a setup could lead to a system where businesses feel obligated to donate to maintain favorable relations with the ruling administration.
3. **Risk of Unchecked Corporate Influence**:
The scheme allows unlimited corporate donations, even from shell companies, without public accountability. Critics argue that this creates a situation where corporations can use donations to exert policy influence, and those refusing to contribute may face pressure or unfavorable treatment. This setup raises concerns that political parties, especially those in power, could implicitly pressure corporations into funding their campaigns to secure future contracts or avoid regulatory challenges.
4. **Supreme Court Rulings and Observations**:
In its recent ruling declaring the scheme unconstitutional, the Supreme Court highlighted the risks posed by anonymous and unlimited donations. The Court noted that these conditions undermine political equality and allow for opaque financial flows, which can lead to unethical pressures on donors and potential misuse of political influence to obtain funding.
While there is no concrete evidence of extortion linked directly to electoral bonds, the system’s opacity and concentration of control have led to widespread concerns that it could be exploited to coerce donations indirectly, especially from corporations dependent on government contracts or licenses. This concern underscores why many advocates are calling for reforms to ensure greater transparency and accountability in political funding.
The
Electoral Bonds Scheme in India has been criticized as potentially functioning
as an "extortion racket" for the ruling government, but this claim is
based on perceived risks rather than documented evidence. Concerns stem from
the lack of transparency and centralization of donor information, which critics
argue could allow the ruling party to pressure or coerce corporate donors. Here’s
a breakdown of the major points fueling this perception:
1. Centralized
Donor Information and Potential for Coercion:
Since only the State Bank of India (SBI) and
the government can access donor identities, critics argue that this creates an
opportunity for the ruling government to subtly pressure corporations into
donating, especially those with significant government contracts or regulatory
dependencies. The fear is that the anonymity to the public combined with
government access might be used to "reward" loyal donors or to
pressure others into contributing to avoid unfavorable treatment.
2. Increased
Dependence on Corporate Funding:
With the removal of caps on corporate
donations, there’s concern that corporations might feel obligated to donate
large sums to the ruling party to secure favorable policy outcomes or avoid
negative attention. This could theoretically create an environment where
corporations feel "forced" to donate to remain in good standing with
the government, making the scheme appear as a tool for coercive influence.
3. Uneven
Distribution of Funds:
Reports indicate that a significant majority
of electoral bond funds have gone to the ruling Bharatiya Janata Party (BJP).
For instance, between 2019 and 2024, it’s estimated that the BJP received more
than 60% of the funds distributed through electoral bonds, raising questions
about whether other parties are unable to attract similar donations due to the
ruling party’s advantage in controlling donor information. Critics argue this
disparity hints at possible coercive tactics or implicit expectations from
donors aligned with the ruling party.
4. Supreme
Court’s Concerns:
In its February 2024 judgment declaring the
scheme unconstitutional, the Supreme Court emphasized that the Electoral Bonds
Scheme lacked transparency, undermined political equality, and had the
potential to facilitate unethical influence over donors. The Court pointed out
that donors might feel pressured to donate to the ruling party, suggesting that
the scheme could indeed be misused to favor those in power, thus indirectly
enabling an environment that could be perceived as coercive.
While the term "extortion racket" might be strong, the criticisms focus on the potential for misuse of the scheme’s anonymity and centralization features, creating an environment where donors may feel coerced into supporting the ruling party to maintain favorable treatment. These concerns have driven calls for greater transparency and legislative reforms to ensure fairer political funding practices.
The Electoral Bonds Scheme in India has been criticized as potentially functioning as an "extortion racket" for the ruling government, but this claim is based on perceived risks rather than documented evidence. Concerns stem from the lack of transparency and centralization of donor information, which critics argue could allow the ruling party to pressure or coerce corporate donors. Here’s a breakdown of the major points fueling this perception:
1. **Centralized Donor Information and Potential for Coercion**:
Since only the State Bank of India (SBI) and the government can access donor identities, critics argue that this creates an opportunity for the ruling government to subtly pressure corporations into donating, especially those with significant government contracts or regulatory dependencies. The fear is that the anonymity to the public combined with government access might be used to "reward" loyal donors or to pressure others into contributing to avoid unfavorable treatment.
2.
**Increased Dependence on Corporate Funding**:
With the removal of caps on corporate donations, there’s concern that corporations might feel obligated to donate large sums to the ruling party to secure favorable policy outcomes or avoid negative attention. This could theoretically create an environment where corporations feel "forced" to donate to remain in good standing with the government, making the scheme appear as a tool for coercive influence.
3. **Uneven
Distribution of Funds**:
Reports indicate that a significant majority
of electoral bond funds have gone to the ruling Bharatiya Janata Party (BJP).
For instance, between 2019 and 2024, it’s estimated that the BJP received more
than 60% of the funds distributed through electoral bonds, raising questions
about whether other parties are unable to attract similar donations due to the
ruling party’s advantage in controlling donor information. Critics argue this
disparity hints at possible coercive tactics or implicit expectations from
donors aligned with the ruling party.
4. **Supreme
Court’s Concerns**:
In its February 2024 judgment declaring the
scheme unconstitutional, the Supreme Court emphasized that the Electoral Bonds
Scheme lacked transparency, undermined political equality, and had the
potential to facilitate unethical influence over donors. The Court pointed out
that donors might feel pressured to donate to the ruling party, suggesting that
the scheme could indeed be misused to favor those in power, thus indirectly
enabling an environment that could be perceived as coercive.
While the term "extortion racket" might be strong, the criticisms focus on the potential for misuse of the scheme’s anonymity and centralization features, creating an environment where donors may feel coerced into supporting the ruling party to maintain favorable treatment. These concerns have driven calls for greater transparency and legislative reforms to ensure fairer political funding practices.`
The Supreme
Court of India declared the Electoral Bonds Scheme unconstitutional, primarily
because it enabled opaque political financing and potentially compromised
transparency and accountability. Initially introduced in 2018, the scheme
allowed individuals and companies to buy bonds anonymously from the State Bank
of India (SBI) and donate them to political parties without disclosing donor
identities publicly. Although designed to reduce cash transactions and ensure
cleaner political funding, the scheme's structure allowed for anonymity, which
the Court found was against citizens’ right to know the sources of political
funding.
Key issues that led to this ruling include concerns that the scheme disproportionately favored the ruling party, as donations could be directed by major corporations and business interests without public scrutiny, potentially skewing the political landscape. Additionally, critics and the Court highlighted the lack of transparency, which allowed corporate donors to exert influence over political parties in ways the public could not see or regulate. Recent data, released as per Supreme Court orders, showed that the ruling Bharatiya Janata Party (BJP) received a significant majority of these funds, which fueled accusations of unfair advantage and raised further ethical concerns about how the scheme could be misused.
This landmark decision aims to ensure political parties maintain accountability to the public and adhere to transparent financial practices. The Supreme Court mandated that all data related to these bonds be made public by SBI, a measure intended to restore transparency and reduce the risks of undue influence and potential misuse of anonymous political donations.
For further details, the Association for Democratic Reforms (ADR) has been actively documenting the impact of the Electoral Bonds Scheme on political funding in India.
The Congress
recently questioned the Election Commission's (EC) decision to order the
removal of social media posts related to the controversial Electoral Bonds
scheme. This directive came after the platform X (formerly Twitter) removed
posts from multiple political figures, including those from the Aam Aadmi Party
(AAP), YSR Congress, and Bihar Deputy Chief Minister Samrat Choudhary, under
instructions from the EC to uphold the Model Code of Conduct for the 2024
elections. Congress spokesperson Supriya Shrinate criticized this action,
asserting that it appeared to suppress discussions on electoral bonds, an issue
that, according to the opposition, "makes the government extremely
uncomfortable."
The Congress
argued that this selective censorship reflects a larger trend in which the
government allegedly leverages regulatory mechanisms to curb online criticism
while being more lenient toward hate speech and inflammatory content. Shrinate
claimed that donations through the Electoral Bonds scheme often lead to quid
pro quo arrangements, benefiting government allies or halting investigations
against significant contributors. The opposition insists that electoral bonds
are a means for political fundraising that lacks transparency, accusing the
ruling party of disproportionately benefiting from these anonymous donations.
Furthermore, they allege that government pressure on social media platforms
targets unfavorable narratives, a trend reportedly seen during the farmers'
protests and other political movements as well.
This
instance underscores ongoing debates over the Electoral Bonds scheme and
concerns over political interference in regulating online discourse during
elections, highlighting the opposition's call for greater transparency and
impartiality in election oversight.
The Election Commission of India (ECI) and the State Bank of India (SBI) have been scrutinized for their roles in managing and implementing the Electoral Bonds Scheme, with accusations from opposition parties and transparency advocates suggesting that they may have enabled a lack of transparency, which some critics label as concealing potential misuse or corruption.
Here’s a closer look at the criticisms surrounding their roles:
1. **Limited
Transparency and Donor Anonymity**:
The scheme allows anonymous donations, with
only the government and SBI having access to detailed information about the
purchasers of electoral bonds. The ECI, which is responsible for ensuring free
and fair elections, faced criticism for permitting a system where the public
lacks access to information about who is funding political parties. This lack
of transparency, critics argue, disproportionately benefits the ruling party,
as large corporate donors may contribute without public accountability, thus
skewing democratic processes and potentially pressuring donors to support the
government in power.
2. **Concerns Raised by the Election Commission Itself**:
Initially, the ECI raised objections to the
Electoral Bonds Scheme, warning that the anonymity feature could undermine
transparency and the fairness of the electoral process. The ECI highlighted
that such anonymity would enable corporations, including shell companies, to
channel undisclosed funds to political parties, raising concerns about
accountability and fairness. Despite these concerns, the scheme was
implemented, leading some to argue that the ECI’s lack of further action
contributed to concealing the details of political funding.
3. **Supreme
Court and Public Criticism**:
The Supreme Court recently struck down the
scheme as unconstitutional, criticizing its lack of transparency and potential
for misuse. The Court noted that while SBI is tasked with issuing the bonds, it
lacks mechanisms to ensure that the scheme is not used for unethical practices,
such as favoring the ruling party with anonymous funds. This ruling underscored
that the ECI, along with SBI, played roles in enabling a system that lacked
sufficient oversight and accountability.
4. **SBI’s
Role in Data Control and Information Limitation**:
SBI’s exclusive control over issuing and
tracking the bonds, without disclosing donor details publicly, has been called
into question. Opposition parties argue that the lack of public access to donor
data, while the government has access to it, creates an uneven playing field. SBI’s
role, therefore, is seen as central to facilitating a process that could
potentially be exploited for political gain without public scrutiny.
The
controversy continues to highlight concerns over the opaque nature of the
Electoral Bonds Scheme, with critics alleging that both the ECI and SBI,
through their roles, allowed a system to persist that could enable the
government to benefit from unaccountable political funding. This has fueled
ongoing calls for reforms to ensure greater transparency and public
accountability in political donations in India.
==
The arrest-related order involving Finance Minister Nirmala Sitharaman over allegations tied to the Electoral Bonds Scheme stemmed from a complaint filed in a Bengaluru court. The court directed an FIR against Sitharaman and others under allegations of "extortion" and "criminal conspiracy." According to the complaint by Adarsh R Iyer of the Janaadhikaara Sangharsha Parishath (JSP), Sitharaman, with support from Enforcement Directorate officials, allegedly facilitated an extortion process, under the guise of electoral bonds, resulting in large financial benefits for certain political figures and officials at both state and national levels. This complaint cited the scheme’s lack of transparency and alleged misuse for political funding.Following the complaint and the recent Supreme Court ruling that struck down the electoral bond scheme as unconstitutional, the case gained renewed legal and political attention. However, the details of the investigation and possible actions remain under deliberation as per procedural law, with opposition figures calling for accountability, though the ruling party dismissed calls for resignation, asserting there was no personal misuse by Sitharaman.
====
30. SEBI AND ADANI GROUP
The SEBI investigation into the Adani Group and
related allegations of irregularities has been a prominent issue in India’s
financial and regulatory landscape in recent years. Concerns were raised about
alleged stock manipulation, opaque offshore funding, and potential violations
of securities laws in the group’s trading practices. Here’s an overview of the
situation:
1. Background
of the Allegations
- In early
2023, the U.S.-based investment research firm Hindenburg Research released a
report accusing the Adani Group of stock price manipulation and accounting
fraud. The report claimed that the conglomerate used offshore shell companies
to artificially inflate stock prices of its listed companies, thereby
misleading investors.
- The
report led to a sharp drop in the share prices of Adani Group companies,
erasing billions of dollars in market value. This raised concerns in India’s
financial circles, prompting regulatory scrutiny from SEBI and other
authorities.
2. Role of
SEBI in the Investigation
- Regulatory
Oversight: SEBI, as the primary securities market regulator, took on the
responsibility of investigating the allegations to determine if any laws or
securities regulations had been violated. SEBI’s focus was to uncover any
irregularities in stock price manipulation, related-party transactions, and the
use of offshore entities.
- Offshore
Funding Scrutiny: One of SEBI's main tasks was to look into the sources of
funds for the offshore entities reportedly connected to the Adani Group.
According to SEBI regulations, foreign investments in Indian companies require
a high level of transparency, especially regarding beneficial ownership.
- Investor
Protection: SEBI is responsible for safeguarding retail investors. Following
the report's publication and the subsequent crash in Adani’s stock prices,
there was an increased emphasis on investor protection, with SEBI initiating
steps to examine if adequate disclosures had been made to investors by Adani
Group companies.
3. Key
Allegations Under SEBI’s Review
- Stock
Manipulation: The Hindenburg report alleged that the Adani Group manipulated
the stock prices of its companies to inflate valuations artificially. SEBI
investigated if these practices involved "pump and dump" schemes,
where prices are inflated to later be sold off at high valuations.
- Opaque
Offshore Entities: The report claimed that the Adani Group used offshore shell
companies, particularly in Mauritius, to route funds back to its entities in
India. SEBI examined if these offshore entities complied with Indian laws on
foreign funding, beneficial ownership, and market disclosures.
- Related-Party
Transactions: There were allegations of significant transactions between Adani
companies and entities allegedly controlled by family members or associates.
SEBI looked into whether these transactions were disclosed as required under
the law, and if they represented a conflict of interest.
4. Supreme
Court Intervention
-
Following the release of the Hindenburg report, the Supreme Court of India
intervened and directed SEBI to conduct an in-depth investigation. The Court
also appointed a special committee to oversee the investigation and ensure its
integrity.
- The
committee included former judges and financial experts tasked with reviewing
SEBI’s progress and findings. This judicial oversight underscored the
seriousness of the allegations and aimed to ensure a thorough and transparent
investigation.
5. Challenges
in the SEBI Investigation
- Lack of
Transparency in Offshore Structures: SEBI faced difficulties in tracing
beneficial ownership structures, particularly when funds flowed through
jurisdictions like Mauritius, the UAE, and the Caribbean, known for banking
secrecy laws.
- Cross-Border
Jurisdiction: Since much of the alleged irregularities involved foreign
entities, SEBI had to rely on international regulatory cooperation. This
created hurdles in accessing information promptly.
- Market
Volatility: The Adani case significantly impacted investor sentiment,
especially in sectors where the Adani Group has a dominant presence (e.g.,
ports, power, and renewable energy). SEBI had to balance its regulatory
response to prevent market disruptions while maintaining a transparent
investigation.
6. Adani
Group’s Response
- The
Adani Group denied the allegations, asserting that the Hindenburg report was
“maliciously mischievous” and intended to harm its reputation. It claimed full
compliance with SEBI and other regulatory norms in India.
- The
Group also initiated legal proceedings against Hindenburg Research, arguing
that the report was misleading and aimed at short-selling to profit from the
fall in Adani stocks.
7. Outcomes
and SEBI's Recommendations
- Disclosure
Requirements: SEBI has emphasized the need for stronger regulations surrounding
disclosure of beneficial ownership, particularly for entities with large
foreign investments.
- Investor
Safeguards: SEBI has worked on introducing new measures to protect retail
investors from sudden price crashes in cases where irregularities are
discovered in large companies. For example, margin requirements and circuit
limits are being reconsidered for high-volatility stocks.
- Strengthened
Regulatory Framework: To prevent similar situations in the future, SEBI has
been evaluating its rules on related-party transactions, insider trading, and
the use of offshore entities for Indian stock market investments.
8. Current
Status and Broader Impact
- As of
the latest updates, SEBI is in the advanced stages of its investigation and is
expected to submit a detailed report on its findings. However, the impact of
the case continues to be felt, as it has raised questions about corporate
governance, transparency, and the regulatory landscape in India.
- This investigation has led SEBI to propose more stringent regulatory checks on foreign inflows, high-risk stocks, and disclosure norms, which could shape the future of Indian markets.In summary, the SEBI and Adani irregularities investigation represents a significant test of regulatory oversight in India, shedding light on the complex relationship between large conglomerates, offshore funding, and the financial system.
==
The
accusations against the Sebi chief range from alleged financial misconduct and
conflicts of interest to claims of a toxic work environment. As these
allegations pile up, it's not just external forces like opposition parties or
explosive short-seller reports causing trouble. India’s market regulator is
facing a threat to its credibility after a barrage of allegations against its
chief, top fund managers have told in press report. Multiple charges, mostly around conflict of
interest, have surfaced against Madhabi Puri Buch, chairperson of the
Securities and Exchange Board of India (Sebi), from at least four different
corners over the past month. She has denied most of them and not publicly
responded to some. This comes amid a
bull run in India’s equity markets, which are among the world’s best performing
this year.
Foreign
investors have pumped in over $6bn (£4.5bn), while millions of new mom-and-pop
investors have opened electronic accounts to invest in a mutual funds and
initial public offering (IPO) frenzy.
Trouble for
Ms Buch began in August when US-based short-seller Hindenburg Research accused
her and her husband of holding investments in an offshore fund used by the
Adani Group, implying it was why Sebi was dragging its feet on an investigation
against Adani over allegations of accounting fraud and market manipulation. Since then a number of other accusations have
come to the fore.
The main
opposition Congress party has accused Ms Buch of receiving rental income from a
company she was investigating. It has also alleged that she held an
"office of profit" at ICICI Bank, one of India’s largest private
lenders, continuing to earn large sums of money through Employee Stock
Ownership Plans (Esops) long after her stint with them was over. Subhash Chandra Goyal, the chairman emeritus
of media giant Zee Entertainment Enterprises, blamed her for the collapse of a
merger between his company and Sony Enterprises, stating "I am convinced
that the Sebi chairperson is corrupt" and calling her
"vindictive" in a press conference. He is currently facing regulatory
action, charges of fund diversion and is barred from holding key posts in
listed firms.
But perhaps
most damaging of all is growing internal dissent within Sebi, which has now
spilled out into the public domain. On 5
September, furious staff members staged a rare protest outside the regulator’s
headquarters demanding Ms Buch’s resignation. Around 1,000 employees had
reportedly complained of a toxic work culture in a letter to the finance
ministry earlier, local media reported. They complained of "immense
pressure" and "shouting, scolding and public humiliation” becoming a
norm in meetings. Sebi has publicly
rejected the claims as “misplaced”, adding that “junior officers have been
misguided, perhaps by external elements”.
However, protesters on Thursday called for an immediate retraction of
this statement.
“This is
unprecedented,” says Hemindra Hazari, an independent business analyst. “Until
yesterday it was allegations from the outside, now internal problems have
become public. Something is seriously wrong.”
Ms Buch has strongly defended herself, denying any conflict of interest
claims in the Hindenburg case, while ICICI Bank has denied paying her a salary
or Esops and said she only received her retirement benefits after she left the
bank. The Sebi chief has so far not made a public statement on protesting
employees or the criticisms levelled at her by Mr Chandra. An alumnus of India’s premier management school,
Indian Institute of Management Ahmedabad, Ms Buch is a trailblazer in many
ways. The youngest and first female chairperson to lead Sebi, she became the
first chief to have come from a private corporate background. Despite being credited for reforming Sebi
with stricter insider trading rules and auditing frameworks, allegations of a
lack of transparency in her own financial affairs raise serious concerns about
whether Sebi holds its top officials to the same standards it expects from
public companies, experts say. “The crux
of the issue is about disclosure rules governing the senior-most officials at
regulatory bodies, given their access to unpublished price-sensitive
information. Their orders and decisions can dramatically impact stock prices,
raising the stakes for stringent disclosure and compliance norms,” writes
Sucheta Dalal, a veteran financial journalist, in a column for Moneylife
magazine.
Standards
for heads of regulators are much more stringent in developed countries where
they are required to, for instance, “divest from direct holdings in entities
that could post conflict of interest”, says Ms Dalal, adding that certain
discrepancies in the statement put out by ICICI Bank about its Esop policy have
complicated rather than clarified matters.
Regulators like Sebi typically have political appointees and lateral
hires from the private sector. Sebi is run by a board with members from the
finance ministry, the central bank and others nominated by the federal
government.
The Buch episode is a “learning” not just for Sebi, but also for other Indian regulators like the insurance watchdog or the Competition Commission to apply more robust disclosure processes, says Shriram Subramanian of the proxy advisory firm InGovern Research. For the moment, investors seem unperturbed by the events of the past month. “Global investors already pay a regulatory risk premium when they invest in India, they will ignore this,” said a veteran trader. But things could take a turn for the worse if the controversy snowballs further, says Mr Hazari.
“Institutional
money can flee if internal warnings go out around compliance issues. And then
retail investors will slowly start pulling out of the market,” he adds. With pressure mounting from both outside and
inside Sebi, some say Ms Buch is now faced with the very real question of
leaving her post. Her position was
"untenable" a few weeks ago, but has become increasingly
"unsustainable" now, Subhash Garg, a former finance secretary, told
journalist Barkha Dutt on Mojo Story, a digital outlet. A resignation or a suspension would be seen
as an admission of guilt, which neither Ms Buch nor the government would want. At least three market experts the BBC spoke
with said the most likely outcome of the controversy will be that Ms Buch's
appointment won’t be renewed. Her current three-year tenure as chairperson ends
in February 2025. “For me what’s most
astounding is that the government has been totally silent. They need to step in
now. When serious allegations are made against the head of a regulator, the
government or the judiciary are the only higher authorities which can authorise
a credible investigation,” said Mr Hazari.
An executive at a foreign fund house who spoke to the BBC on condition
of anonymity said global investors will watch the way the government handles
the matter, and how swiftly it acts.
==
Madhabi Puri Buch is the current Chairperson of the Securities and Exchange Board of India (SEBI), appointed in February 2022. She is notably the first woman to head SEBI and also the first person from the private sector to lead the organization. Her tenure is seen as transformative, with an emphasis on improving transparency, technology adoption, and market integrity.
Background and Career
- Education: Madhabi Buch holds an MBA from the Indian Institute of Management, Ahmedabad.
- Professional Experience: She has an extensive background in financial services, having worked in various leadership roles within the private sector. She was an executive director at ICICI Bank and has served on the boards of several financial companies and regulatory bodies.
- Experience with SEBI: Prior to becoming SEBI’s chief, she served as a Whole-Time Member (WTM) at SEBI from 2017 to 2021, during which she oversaw several portfolios, including market surveillance, investment management, and regulation.
Key Initiatives and Regulatory Focus
Under Madhabi Buch’s leadership, SEBI has undertaken various initiatives aimed at strengthening the Indian capital markets, particularly focusing on investor protection, transparency, and the use of technology.
Technology and Data Analytics:
- Enhanced Surveillance: Buch has emphasized the use of data analytics and artificial intelligence for market surveillance to detect suspicious trading patterns, insider trading, and stock price manipulation.
- Digital Transformation: SEBI has increased its digital capabilities, making it easier for investors to access information and for SEBI to monitor compliance in real time.
Investor Protection and Transparency:
- Strengthening Disclosure Norms: She has focused on enhancing disclosure requirements, especially in areas such as related-party transactions, beneficial ownership, and ESG (Environmental, Social, and Governance) compliance. This initiative aims to improve transparency for investors.
- Retail Investor Safeguards: Buch has initiated reforms to protect retail investors, including regulations on investment advisors, improved access to corporate information, and limiting risks associated with high-volatility stocks.
Corporate Governance and Accountability:
- Board Independence and Accountability: SEBI, under her leadership, has been pushing for more stringent norms around independent directors and the responsibilities of boards in listed companies.
- Tighter Regulations on Mutual Funds and Alternative Investments: SEBI has also implemented regulations to prevent conflicts of interest and improve disclosures in mutual fund and alternative investment sectors.
31. Educational institutions have become the political chair of the Modi government :
Whether it is the appointment of Baldev Sharma, the former editor of RSS mouthpiece Panjjanaya, as Chairman of the National Book Trust, or the appointment of the Chairman of the Hyderabad chapter of the RSS-run, Akhil Bharatiya History Compilation Scheme, Y Sudarshan Rao, (who is not famous as a historian) as Chairman of the Indian Council for Historical Research (ICHR), whether it is the appointment of Modi’s admirer and supporter Zafar Sareshwala as Chancellor of Maulana Azad National Urdu University, or it is the appointment of Gajendra Chauhan, a close aide of BJP as the Chairman of FTII, whether it is the appointment of BJP-RSS’ favorite and formerly associated with ABVP, Prof. Sanjay Dwivedi as the Director General of the ‘Indian Institute of Mass Communication (IIMC), or it is the appointment of BJP MP and National Vice President, Vinay Sahasrabuddhe, as the Chairman of the ICMR, or it is the appointment of the National President of the ‘Bharatiya Shikshan Mandal’ of the RSS, Dr.Satchidanand Joshi, as Secretary of Indira Gandhi National Center for Arts (IGNCA) or it is the appointment of RSS-BJP people as Vice Chancellors or Registrars in Central Universities across the country – There are many examples of this. 15. New Education Policy - Privatization of education and ‘digital divide’ for middle class and poor! The main focus of Education Policy 2020 is ‘Online Education’. In this, it has been claimed to increase the average of students studying through online education from 26 percent to 50 percent. But due to non-availability of computers and internet, students from poor, Dalit, backward, tribal and rural areas will be isolated and a new ‘digital divide’ of the country will be born. The ‘New Credit Policy’ will divide the university and college into separate graces and encourage privatization.
32. Use of ED, CBI, INCOME TAX etc., and for electoral bonds in india
An analysis of firms which feature among the top purchasers of
electoral bonds throws up many curious patterns. One of the common links is
that a significant number of companies in the top donor list were under the
Enforcement Directorate’s or the Income Tax (I-T) department’s scanner at some
point of time in the past five years. In some cases, a chunk of the bonds were
bought by these firms, in the days following such searches. The Future Gaming and Hotel Services PR was
the largest donor to political parties via the electoral bond route, with a
cumulative sum of ₹1,368 crore. In May 2023, the ED had carried out searches at
the residence of Santiago Martin in Chennai, the well-known lottery magnate and
the Managing Director of the company. The ED had also conducted searches at the
business premises of the company in Coimbatore under the provisions of the
Prevention of Money Laundering Act (PMLA). A year earlier, on April 2, 2022,
the ED had attached movable assets worth ₹410 crore under the PMLA in the case
of lottery scam against the company and its subsidiaries. Interestingly, five
days later, on April 7, 2022, the company made a significant purchase of
electoral bonds worth ₹100 crore, marking one of their largest transactions on
a single date. Of the ₹1,368 crore worth bonds purchased by the company, 50%
were done before the ED searches and 50% after the searches.
===
33. Adani Group, a private involvement in the power sector
The Adani Group is made one of India's largest private sector power producers with political mileage, with a significant presence in both conventional and renewable energy generation. Adani’s power plants are part of Adani Power Limited, a subsidiary of the Adani Group, which operates across multiple states in India. Key Power Plants and Projects. Many questions were raised by the main Opposition political parties that misuse of power ..
# 1. Mundra
Thermal Power Plant (Gujarat)
- Capacity: 4,620 MW (the largest coal-based
power plant in India)
- Details: Located in Mundra, Gujarat, this
plant is Adani Power’s flagship project. It uses supercritical technology to
improve efficiency and reduce emissions.
- Significance: It serves as a major supplier of electricity to various Indian states and exports power to neighboring countries like Bangladesh.
# 2. Tiroda
Thermal Power Plant (Maharashtra)
- Capacity: 3,300 MW
- Details: Located in Tiroda, Maharashtra,
this plant also uses supercritical technology to ensure higher energy
efficiency.
- Significance: Tiroda is among India’s larger coal-based power plants and caters to Maharashtra’s high electricity demand.
# 3. Kawai
Thermal Power Plant (Rajasthan)
- Capacity: 1,320 MW
- Details: This coal-fired power plant,
located in Kawai, Rajasthan, is equipped with advanced technology and plays a
crucial role in meeting Rajasthan’s power needs.
- Significance: The Kawai plant contributes to stabilizing the electricity supply in northern India.
# 4. Udupi
Thermal Power Plant (Karnataka)
- Capacity: 1,200 MW
- Details: Located in Udupi, Karnataka, this
is a coal-based plant originally set up by Lanco Infratech, later acquired by
Adani Power.
- Significance: Udupi is one of the major power sources in the southern grid of India and supplies electricity to the state of Karnataka.
# 5. Godda
Power Plant (Jharkhand)
- Capacity: 1,600 MW
- Details: This thermal plant is under
construction in Godda, Jharkhand. Once operational, it will primarily supply
power to Bangladesh under a long-term power purchase agreement.
- Significance: Godda is strategically important as it supports India's goal of strengthening ties with Bangladesh through energy trade.
# 6. Solar
and Wind Energy Projects
- Solar Power: Adani Green Energy, the
renewable energy arm of the group, has over 20,000 MW of solar power capacity
(installed or under construction) across states like Rajasthan, Gujarat, and
Tamil Nadu.
- Wind Power: Adani has also invested in
wind power projects, contributing to India’s renewable energy capacity with
facilities in states like Gujarat.
- Significance: Adani aims to become the world’s largest renewable energy producer by 2030, in alignment with India’s commitment to transitioning towards clean energy.
Future Plans and Expansion
- Green Hydrogen: The Adani Group has
announced plans to produce green hydrogen, aiming to establish India as a major
player in the global hydrogen economy.
- Hybrid Renewable Projects: Adani is also working on hybrid renewable projects that combine solar and wind power to provide stable, round-the-clock renewable energy.
Environmental and Regulatory Challenges
- Environmental Concerns: Adani’s thermal
power plants have faced scrutiny over environmental impacts, especially in
coal-based projects. There have been calls for better management of emissions
and coal ash.
- Community and Legal Issues: Some projects have encountered opposition from local communities and activists concerned about land use, water consumption, and air quality.
====
34. CJI Chandrachud and Politics in India:
Chief Justice of India (CJI) D.Y. Chandrachud, who became the 50th Chief Justice of India in November 2022, has been known for his judicial independence, progressive views, and focus on safeguarding constitutional values. While the judiciary in India, especially the Supreme Court, is designed to function independently of political influence, the role of the Chief Justice often intersects with political issues because of the high-profile and impactful cases that come before the court. CJI Chandrachud’s tenure has highlighted the judiciary's role in India's democracy, particularly in interpreting the Constitution and preserving the balance between the judiciary, executive, and legislature.
Key Judicial Interventions and Views of CJI Chandrachud
1. Protection of
Constitutional Rights and Civil Liberties:
- CJI Chandrachud has consistently
emphasized the importance of protecting individual freedoms and civil
liberties, especially for marginalized groups. He has championed cases that
uphold the fundamental rights enshrined in the Constitution, often ruling in
favor of protecting personal freedoms against potential government overreach.
- Significant Judgments: As a judge, prior to becoming CJI, Chandrachud delivered landmark judgments on privacy (Puttaswamy vs. Union of India), decriminalizing homosexuality (Navtej Johar vs. Union of India), and expanding reproductive rights, particularly for women.
2. Commitment to
Judicial Independence:
- Justice Chandrachud has maintained a firm
stance on judicial independence, which is essential for the rule of law. His
commitment is especially relevant in India, where there are frequent calls for
reform and closer scrutiny of judicial appointments and functions.
- Collegium System: Chandrachud has defended the collegium system, which involves the judiciary appointing its own members rather than political or legislative influence. He has advocated for increased transparency in appointments, while also affirming that judicial independence is paramount and should remain separate from executive control.
3. Handling of
Politically Sensitive Cases:
- During his tenure, the Supreme Court has
handled numerous politically sensitive cases, such as issues related to Article
370 (the revocation of Jammu and Kashmir's special status), freedom of speech,
media regulation, electoral bonds, and cases concerning religious freedoms.
- In politically charged cases, CJI Chandrachud has emphasized the importance of impartiality, frequently underscoring that the court’s duty is to uphold the Constitution without succumbing to public or political pressures.
4. Role in Electoral
and Democratic Integrity:
- CJI Chandrachud has recognized the
judiciary’s role in maintaining democratic integrity. His comments on electoral
reforms, including transparency in political funding and ensuring that election
laws are fair and balanced, reflect his belief that the judiciary has a duty to
strengthen democratic processes.
- Electoral Bond Scheme: The scheme, which allows anonymous donations to political parties, has raised concerns about transparency in political funding. CJI Chandrachud has acknowledged these concerns and pushed for judicial scrutiny of policies that might affect the fairness of elections.
5. Digital and Media
Freedom:
- Justice Chandrachud has shown strong
support for media freedoms and digital rights, especially in the face of
digital censorship and surveillance. Recognizing that an independent press and
freedom of expression are pillars of democracy, he has argued for balancing
national security concerns with citizens' rights to information and free
speech.
- Internet Freedom: He has spoken on the significance of digital freedom, emphasizing that the right to access information is integral to personal liberty and should not be unduly restricted without compelling reasons.
6. Legal Reforms and
Access to Justice:
- CJI Chandrachud has been vocal about
making the judiciary more accessible and efficient. He has promoted the
digitization of court processes and virtual hearings, aiming to make justice
delivery faster and more accessible, especially in remote areas.
- Digital Courts Initiative: Under his
leadership, the judiciary has made significant strides in using technology,
such as video conferencing and digital filing systems, to expedite legal
proceedings and improve access to justice.
7. Social Justice and
Equality:
- CJI Chandrachud has advocated for judicial
decisions that promote social justice, equality, and inclusivity. His judgments
and statements reflect an emphasis on advancing the rights of women, LGBTQ+
individuals, and economically marginalized groups.
- His stance has resonated with many who believe that the judiciary plays a role in shaping a more just and equitable society, especially when legislative action falls short.
Interaction with Politics in India
While CJI Chandrachud
himself does not engage directly in politics, his decisions and views
frequently impact the political landscape, as the Supreme Court’s rulings can
either uphold or challenge government policies. In India’s current context,
where political power is centralized and public institutions face challenges to
their autonomy, the judiciary, under leaders like CJI Chandrachud, serves as a
critical check on government power.
CJI Chandrachud has faced some criticism from political figures and sections of the media, especially over decisions perceived as counter to the government’s stance. Additionally, the judiciary’s involvement in high-stakes political cases places it in the public eye, sometimes leading to accusations of judicial overreach. Despite this, CJI Chandrachud’s focus on transparency, constitutional rights, and judicial independence has largely been seen as reinforcing the judiciary's critical role in upholding India’s democratic principles. Cases of SIT formation for investigations on Electrol bond, Court judgement on Babri masjid, Court judgement on murder or death of Judge Loya and other doubtful death of related Judges. Delay in grant of bail to political sufferers.
Conclusion-CJI Chandrachud’s tenure has highlighted the judiciary's role as a pillar of Indian democracy, committed to constitutional values and judicial independence. His leadership has underscored the importance of protecting civil liberties, ensuring the transparency of government actions, and upholding democratic processes—all of which can impact the political dynamics in India by holding authorities accountable and reinforcing the constitutional framework. His approach reaffirms that, while the judiciary may intersect with political issues, it stands to protect the rule of law and democratic values above all.
35. 'Bulldozer Justice is Unacceptable': SC Directs Action Against Yogi's Officials For Illegal Demolition.
If “bulldozer justice” was
permitted, the constitutional recognition of the right to property under
Article 300A would be reduced to a dead letter, the court observed in a strong
indictment of the arbitrary demolition of properties in BJP- ruled Uttar
Pradesh. “Justice through bulldozers is
unknown to any civilised system of jurisprudence. There is a grave danger that
if high handed and unlawful behaviour is permitted by any wing or officer of
the state, demolition of citizens’ properties will take place as a selective
reprisal for extraneous reasons,” the apex court said. Court directs UP
government to pay compensation of Rs. 25 lakh to senior journalist. A three-judge Bench comprising outgoing Chief
Justice of India D.Y Chandrachud along with Justices JB Pardiwala and Manoj
Misra made the observations on November 6 while directing the Yogi
Adityanath-led Uttar Pradesh government to pay senior journalist Manoj Tibrewal
a compensation of Rs 25 lakh after his ancestral house and shop were unlawfully
demolished by officials for widening a road.
Tibrewal had in October 2019
written to the court complaining of the unlawful demolition of his property in
Mohalla Hamid Nagar in Maharajganj district. The court had registered the
complaint as a suo motu writ petition and in 2020 issued notice to the District
Magistrate and Superintendent of Police Maharajganj.
After going through the
disclosures made by the government, the Supreme Court ruled that the
“demolition was high-handed and without the authority of law.”
“The demolition was preceded only
by a Munadi (public announcement through drum beating). There was no written
notice; and no disclosure of the basis of demarcation or the extent of the
demolition to the occupiers. Even in respect of the area allegedly encroached
no due process was followed and a written notice was not issued,” said the
court.
https://inc.in/congress-sandesh/economy/8-years-8-frauds-bjp-government-failed
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