From: bond@jupiter.sun.csd.unb.ca (Girish Bonde)
Subject: CORRUPT : Is the Narsimha Rao regime losing its sheen?
Organization: University of New Brunswick
Date: Tue, 1 Sep 1992 22:49:26 GMT


       "CORRUPT : Is the Narasimha Rao regime losing its sheen?"
        =======================================================

            ( An article from "Sunday", 9-15 August, 1992 )

Narsimha Rao appears to have shifted his attention from the economic agenda
- the PM has sacrificed commerce minister P. Chidambaram - to concetrate on
battling Sharad Pawar and Arjun Singh.
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Events gathered their own momentum over the  last  week.  Defence  Minister
Sharad  Pawar  became  the focus of concentrated attacks in Parliament over
his alleged involvement in a Bombay land scam. The CBI joint  director,  K.
Madhavan,  who was investigating the stocks and securities scam, put in his
papers for retirement mid-way through the probe. His friends said  that  he
was  disgusted  by  the pressure being put on him by the government to back
off from investigating politicians and ministers. In  Madhya  Pradesh,  the
BJP  govt.   continued  its  own  investigations into Arjun Singh's various
deals. Hot on the hills of the Churhat lottery probe came a new  inquiry  -
into  the  human  resource  development minister's marble mansion at Kerwa,
with his political opponents wanting to know where Arjun Singh had got  the
funds to build such an impressive residence.

As if in response to this, Arjun Singh launched his own offensive. He wrote
to  the  PM's  political  secretary,  Jitendra  Prasad,  asking  for a more
aggresive approach to the BJP. Though the wily Thakur was careful to praise
Rao's  handling  of  the  recent  crisis  in  Ayodhya, the letter virtually
amounted to a challenge to PM Narasimha Rao's style of functioning.

Suddenly, things were beginning to hot up.

The peices first began to come unstuck when the  scam  broke.  The  amounts
involved  in  the  stocks  and securities scandal - going upto thousands of
crores - were much larger than any previous sums involved  in  such  scams.
The  Bofors kickbacks, for example, amounting yo Rs. 64 crores, seemed like
chickenfeed in comparison.  And with several high  ranking  bank  officials
being  asked to proceed on leave or even being suspended for their involve-
ment in the scandal, while kingpin Harshad Mehta was  taken  into  custody,
the scam seemed to put entire financial system into discredit.

The dimensions of the scandal soon increased to include  several  ministers
in its ambit. Victim number one was commerce minister P. Chidambaram, whose
resignation was virtually snatched out of his hand  by  PM  Narasimha  Rao,
once  he confessed that he had invested in Fairgrowth Financial Services, a
company included in the scam investigations. While most  people  maintained
that  Chidambaram  had been shabbily treated, this did not stop speculation
about the other ministers who were allegedly part of the scam.

Such speculation raged within the Congress itself.  Rajiv  Gandhi's  former
factotum,  R.K.  Dhavan,  apparently  drew  up a list of ministers who were
involved in the scandal and gave it to newly elected MP  Rajesh  Khanna  to
circulate  in Parliament. Khanna was dissuaded from doing so by some senior
Congressmen, who adviced the formar film star not to get involved  in  such
campaigns.

R.K. Dhavan did not stop at that. He went to the extent of  stopping  steel
minister  Santosh  Mohan Dev in the Parliament lobby to inform him that his
name was being mentioned in connection with the securities  scam.  Dev  was
understandably upset, and later alleged that such rumours were being spread
by some politicians who wanted him to bend  the  steel  ministry  rules  to
benefit  them.  Since he had refused to do so, they were extracting revenge
by making such wild charges.

But despite the allegations and counter-allegations, Rao  managed  to  keep
himself  above the scandal. And ensured that the government's image was not
besmirched by giving the  impression  that  it  was  his  regime  that  had
unearthed  the scandal, and was pursuing the investigation with great zeal.
All of Rao's utterances seemed to convey that the government had nothing to
hide.

It is in this connection that Madhavan's  action  gains  significance.  The
joint  director  of the CBI is well known to the press and politicians from
the days when he was involved in the Bofors probe. An excellent but careful
officer,  Madhavan  is  known  to  tape all his phone conversations. Hence,
Opposition members feel, he would not have threatened to put in his  papers
unless  he  had  conclusive  proof  that  pressure was being applied by the
government to go slow on the investigation.

What makes matters worse from Rao's point of view is  the  allegation  that
pressure  was  being  applied  by the Prime Minister's office (PMO) itself,
with principal secretary A. N. Varma's name being mentioned most  often  in
this  connection.  Also,  there was some talk that PM's son, Rajeshwar Rao,
was also involved.

Until now, Rao had managed to use the scam to ease out Chidambaram  and  to
keep  his  ministers  at  check,  using the scam like Brahminical Damocles'
sword. But now, there were signs that this strategy was backfiring on  him.
Madhavan insisted that he would only stay on if Rao calls him up to confirm
that the investigation would not be  interfered  with.  But  Rao  showed  a
remarkable  reluctance  to do so and even indicated that if Madhavan wanted
to go, he wouldn't stop him.

In his first intereview to 'Sunday' after becoming PM,  Narasimha  Rao  had
said that he would like to be remembered as an honest man who has done what
he could.  And certainly,  there  was  not  even  a  whisper  of  financial
impropriety  where  the  PM was concerned. But Rao's political strategy was
based on using allegations of corruption and the threat  of  dissidence  to
keep potential rivals in check, just as Indira Gandhi had done before him.

Thus, the attack on Sharad Pawar after the Bombay High Court judgement  was
coordinated  by  Narasimha  Rao's men. And Arjun Singh believed that it was
Rao's closeness to the BJP which was making Patwa's government in MP launch
an investigation into his affairs.

But corruption is a double-edged sword, and its use only makes sense in the
short  term.  If  you keep suggesting that your ministers are corrupt, then
these charges soon rub off on the entire government. In the end, nobody  is
going  to  sit around and be accused of corruption; sooner or later politi-
cians will fight back.

Arjun Singh has already launched an offensive against  Rao,  by  writing  a
letter to his political secretary questioning the PM's attitude to the BJP.
And nor is Pawar inactive. His supporters are threatening to cause problems
in  the  Maharashtra  unit  of  Congress(I), and make life difficult for CM
Sudhakarrao Naik.

Ultimately, Rao's own techniques appear to be backfiring on him. And in the
final  analysis,  the  scam  may be the Narasimha Rao government's Fairfax.
Just as Rajiv Gandhi had lost his enthusiasm for liberalisation after Fair-
fax  and  descended into the realm of 'realpolitik', so it seems to be with
Narasimha Rao. Rajiv had junked economic reform and joined battle with  his
defence  minister  V.  P. Singh. Narasimha Rao also appears to have shifted
his attention from the economic agenda - witness him cheerfully sacrificing
his  commerce  minister  P.  Chidambaram - to concentrate on battling 'his'
defence minister Sharad Pawar - not  to  mention  human  resource  minister
Arjun Singh.

Rao has already launched his counter-offensive. One of his principal confi-
dants,  communications minister Rajesh Pilot, has written a letter to Arjun
Singh, criticising his missive to Jitendra Prasad and objecting to the fact
that  the  human  resource minister appeared to have released the letter to
the press. Pilot sent copies of this letter  to  all  the  members  of  the
Congress Working Committee (CWC).

At the moment, though, Arjun Singh appears to be playing  the  game  better
than  Narasimha  Rao.  The  wily Thakur has succeded in shifting the agenda
from liberalisation to countering the BJP, a move that is to his advantage.
But  whether  this suits the country and Rao, whose principal claim to fame
has been his commitment to economic reforms, remains to be seen.

Certainly, his government has lost its pristine sheen.

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