Don't bother with a JPC on Scam-2001 At best it would be a source of amusement, at worst a waste of time (9 April, 2001)
Congress spokesperson Jaipal Reddy
is doing a great disservice to the nation by demanding a Joint Parliamentary
Commission (JPC) to investigate Scam-2001. Reddy was a member of the 1992 JPC,
as was Finance Minister Yashwant Sinha; so who better than them to know that a
JPC serves no real purpose? It is probably the reason why the government was
willing to accept Mr. Reddy’s suggestion with such
Let us look at what happened last
time. At least two-thirds of the 30 JPC members neither understood the scam nor
cared to do so; they attended occasional hearings, usually surfacing when they
had a specific interest in an individual or group that was being interrogated.
Some them even caused a lot of merriment by snoring during the interrogations.
The entire financial system was put
through enormous harassment, trying to furnish answers, in approximately 35
copies plus Hindi translations, to the questions posed by the honourable
representatives of the people handpicked to be in the JPC. Many of the questions
were utterly frivolous, but involved mining mountains of data and generated
mounds of paper. Most of this information was simply junked by the members and a
large portion of it was routinely available for a price. This circus was hidden
from the Indian public under the pretext of absurd banking secrecy rules. The
media was barred from the hearings and only given a carefully edited briefing at
the end of each day.
The problem started with the JPC
members setting out on a mission to be the financial experts, instead of
concentrating on the larger policy issues of governance, regulation and
supervision. The report is replete with details about specific transactions – a
job that was already discharged by the multi-agency Janakiraman
Once the long and meandering
hearings for data collection were over, the remaining 37 JPC sessions dwindled
into mere horse-trading. Members, who had made little contribution until then,
were suddenly at the centre of intense politicking, influencing who to nail and
who to let off.
Finally, the JPC report paid lip
services to all aspects of the scam, but played up needless detail and relegated
some crucial issues to the “notes” attached to the main report.
For instance, it commented on the
‘worrisome tendency of the entire government machinery to transfer
responsibility downwards’ but did not attempt to fix responsibility at the top.
Also, empty righteous observations like -- “if a system is devoid of the moral
quotient, or a common sense appreciation of right from wrong, of a sense of
public duty particularly when entrusted with public funds, it cannot work”, only
evoked contemptuous sniggers then, as it will now. After all the role of
politicians in Scam-1992 as well as Scam- 2001, is a common knowledge; as is the
fact that they get away unscathed every time.
In 1992, only one Minister B.
Shankaranand was implicated and forced to resign even though a dozen ought to
have been in the dock. In Shankaranand’s case too, all investigations were
dropped in return for him volunteering to be the sacrifical lamb. Mothballing
the P. V. Narasimha Rao bribery allegation by Harshad Mehta is even more
reprehensible, but more of that later.
The JPC specifically held the
Reserve Bank of India (RBI) responsible for ignoring warning signals since 1986.
It said: “Red alerts were ignored, reports consigned to the backburner and
market intelligence treated with disdain”. This statement could well be cut and
pasted in the JPC report on Scam-2001. But the Deputy governor, named in the JPC
report and other officials were not touched. The Department of Supervision
initially envisaged as a powerful and independent supervisory agency dwindled
into just the DBOD in another avatar. It is headed by a deputy governor
curiously on his second extension and unknown for stringent supervisory action.
The JPC had identified foreign
banks as the main culprits of Scam 1992 and ordered “stringent penalties
including suspension of licenses” and legal action to be pursued in India and
abroad. No licenses were cancelled, the stringent penalties were less than a
slap on the wrist and only repatriation of profits were disallowed for a few
years. A few heads at the top rolled, but none have been called for evidence
during the scam trial in the Special Court at
The most serious issues were
relegated to a slew of notes attached to the report. These included Harshad
Mehta’s charge of having bribed Narasimha Rao, his confession that he had bribed
other politicians as well (but had no proof), the Andhra Bank-Goldstar case
involving Narasimha Rao’s sons and stock broker Hiten Dalal. In connection with
the bribery charge, a note by 13 opposition MPs, including Jaipal Reddy and
several members of the present government had called for a detailed
investigation under the Commission of Enquiry Act to be held and submitted to
parliament within six months. The MPs themselves failed to follow up their
demand. Allegations against Romesh Bhandari, then Governor of Tripura were also
allowed to vanish even after the JPC noted his “attempts to influence witnesses
and tamper with evidence” and had called his conduct “highly incriminating”.
Also, despite a detailed recording of references to specific“hawala” payoffs to various scamsters
and bankers, these investigations were never pursued. An investigation into
hawala dealings is clearly one can of worms which politicians don’t want to
Another aspect that was relegated
to the notes and subsequently dropped was collusion of industrialists with
Harshad Mehta. Reliance Industries, Apollo Tyres and United Breweries were
specifically named but this trail too was dropped. After all, industrialists are
as important to politicians for greasing the wheels of government and their own
The previous JPC, had pulled up the CBI for failing to investigate the connection between brokers and “politically important persons”. The next JPC too will voice similar sentences and which are written and quickly forgotten.
Maybe Jaipal Reddy and those demanding a JPC should first outline to the people how they will make this one different from the previous one. Preferably, they will do so on the floor of the parliament, rather than on television shows or at mob meetings. But preferably also, they will learn from the past, and realise that only a public inquiry of the sort conducted by Justice M. C. Chagla into the Haridas Mundhra episode of the late sixties really works. This time, they should get someone like G. V. Ramakrishna, who has an unimpeachable track record and the requisite experience to head such a commission.
-- Sucheta Dalal