Full text: Former bureaucrat EAS Sarma writes to Modi on 5 steps to take against black money

Dr EAS Sarma, 1965-batch IAS officer of the Andhra Pradesh cadre, was transferred 26 times in his 35-year tenure as a bureaucrat because of his refusal to toe the government line on policies he believed to be anti-people or unconstitutional.

He served as secretary in the Ministry of Finance (between 1999 and 2000) and quit over differences with the AB Vajpayee-led National Democratic Alliance government over public policy issues.

Post-retirement, his public interest litigation along with sociologist Nandini Sundar, historian Ramachandra Guha and others eventually led to the Supreme Court declaring the Salwa Judum – a private militia to fight the Maoists in Chhattisgarh – unconstitutional.

He had earlier been a member of the expert group constituted by the planning commission to study “development challenges in extremist-affected areas” and later moved “the Supreme Court because neither the Centre nor the state government acknowledged our findings on the war in the heart of India”.

During the United Progressive Alliance government’s tenure, Sarma also wrote regularly to then Prime Minister Manmohan Singh on various issues, including what he considered as the flawed government policy on Krishna Godavari basin.

Sarma is a post-graduate in nuclear physics from Andhra University and in public administration from Harvard University. He also has a doctorate from IIT-Delhi.

Sarma has been fighting against projects affecting environment and public health, including the setting up of power projects along the coastline and illegal mining in Adivasi areas.

This is the text of the letter he has written to Prime Minister Narendra Modi on the latter’s policy initiatives against black money.

EAS Sarma
Visakhapatnam

To

Shri Narendra Modi
Prime Minister

Dear Shri Modiji,

Subject:- Drive against Black Money

I write this in continuation of my recent letter dated 12-11-2016 on the subject. I enclose a copy of that letter for your ready reference.

I thought that I should bring to your notice a BBC news report (Lavish wedding angers cash-strapped Indians) that appeared today at a time when the common man/woman in the country is asked to join your grand campaign against black money and, therefore, bear the pain and trauma of demonetisation. In case your office has not shown this report, I enclose a copy of that report for your perusal.

The lavish wedding is that celebrated by Shri G Janardhana Reddy, a former BJP Minister of Karnataka. In the past, one of your present Cabinet Ministers took help from him for contesting elections. He continues to enjoy BJP’s blessings as evident from the fact that several of BJP’s bigwigs in Karnataka are already seen rubbing shoulders with Shri Janardhana Reddy at the pre-wedding functions.

The cost of the wedding is estimated at more than Rs 500 crores, a figure that not many ordinary Indians can even imagine! The invitation for the wedding is gold-plated fitted with LCD screens, costing crores of rupees. The wedding sari costs Rs 17 crores and the wedding jewellery Rs 90 Crores. There are 3,000 “bouncers”, 300 and odd policemen, sniffer dogs and bomb squads deployed to maintain “law & order” at the wedding premises. When Indian soldiers are fighting on the border and many losing their lives, this is something that should rouse the conscience of any patriotic Indian.

Despite a CBI investigation going on against this person and despite your grand “surgical strike” against black money, he seems to be at no disadvantage whatsoever in finding mountains of ready cash and resources for all this obscene display of affluence.

Shri Janardhana Reddy was quoted in the BBC report as saying that “he had mortgaged properties in Bangalore and Singapore to raise money for the wedding and that all payments were made six months ago when the planning started”. Which are those properties in Bangalore and Singapore? Have the Enforcement Directorate, CBDT, Serious Fraud Office, CBI etc. investigated this? How much of undeclared cash is available for such a lavish wedding? When the Income Tax Dept is hounding smaller traders all over the country, why have they remained non-committal in this particular case?

Many persons standing in long queues in front of banks and ATMs are heard expressing surprise and anguish at the likes of Shri Janardhana Reddy not being seen anywhere in any of the queues, when the ordinary citizen is forced to wait and get tired for drawing his or her own money in the name of fighting the common cause propounded by you in the speeches that were broadcast nationwide during the last few days.

Will BJP formally announce that all those in its own ranks attending such a lavish wedding, especially at a time when you have subjected the masses to the demonetisation distress, will be asked to quit the party to send a clear message that the party is against black money holders?

You cannot run with the hare and hunt with the hounds at the same time. If you wish to flush out black money in real earnest, Mr Prime Minister, you have to flush it out from the bigger sharks nearer home, not the petty cash hoarders. If you wish to tell the nation that you mean business, the people of this country wish to see some big fish apprehended, their benami properties confiscated and an example is set to deter the others from violating the law of the land.

I had earlier suggested tangible steps for you to consider. 

1. Kindly revoke the retrospective amendment to Foreign Contributions Regulation Act, as the amendment compromises the national interest. 
2. Proceed against those Chief Ministers, Ministers and other public functionaries who have illicit offshore accounts. 
3. Trace their benami properties and get them attached. 
4. Order an independent investigation into both election funding and election expenditure of all political parties for the last three years. 
5. Announce that your party at least will subject itself to the RTI Act. 

Without these minimal measures, the commendable drive you have displayed in demonetising higher currency notes may lose its momentum.

Regards,

Yours sincerely,

EAS Sarma
Former Secretary to GOI
Visakhapatnam
16-11-2016

Following is the full text of Sarma’s November 12 letter to the prime minister.

EAS Sarma
Visakhapatnam

To

Shri Narendra Modi
Prime Minister

Dear Shri Modi,

I am happy that you have taken the bold step to demonetise higher denomination currency notes as an important effort to flush out black money. Such a step will yield better results if your government also simultaneously addresses the systems that breed black money and correct those systems. Instead of addressing the symptoms alone, it will be more effective to address the root causes of the disease of corruption.

I understand that you have made a statement from Kobe in Japan that your government would take further action not only to curb black money generation but also step up the campaign against corruption. It is a welcome statement.

In that connection, I suggest that you consider the following approaches that can enhance the credibility of your government.

• In the guise of inviting investors, most State governments have been giving away public lands, precious scarce minerals and other public resources of great value to private companies at highly subsidised rates, allowing those companies to profiteer at the cost of the public exchequer, thereby creating scope for generation of black money. You should take the lead in building a national consensus on putting a stop to this regressive approach forthwith. As far as possible, the governments which are merely public trustees of such resources, should conserve those resources and refrain from doling out natural resources at rates less than their market value, as rightly directed by the apex court in the 2G Spectrum case. 
  
  
• The Companies Act permits companies to make political contributions upto 7 1/2% of their profits, whereas the threshold for contributing funds for societal needs (corporate social responsibility) is only 2% of the profits. This is not only a warped provision intended to promote crony capitalism but also a retrograde provision that has resulted in the governments granting quid pro quos to the donor companies, violating the law of the land. If you can abolish political contributions altogether and replace the same by State funding, you will be getting at the root of electoral corruption and cleanse the system once for all. Simultaneously, you should help the Election Commission of India (ECI) in curbing lavish election spending.
  
  
• In this context, though the Foreign Contributions Regulation Act (FCRA) prohibits political parties and politicians from accepting donations from foreign companies, many political parties including BJP have blatantly violated the FCRA. I filed a writ  [WP(C) 131/2013] before Hon’ble Delhi High Court who directed your government, in their Order dated 28-3-2014, to proceed against all political parties violating the FCRA and prosecute the errant foreign companies. Accepting donations from foreign companies compromises the national interest and I feel distressed that both the major political parties, namely, Congress and BJP, should have committed such a highly distressing offence! Your government has not only dragged its feet in implementing the court order but has gone one step backwards by introducing an amendment to the FCRA retrospectively through the backdoor of the latest Finance Bill and got it enacted by the Parliament. In other words, your government has no qualms in seeking donations from foreign companies to the detriment of the national interest and has gone to the extreme extent of getting the FCRA amended to accommodate such a highly objectionable provision. Mr. Prime Minister, unless you get this regressive amendment revoked forthwith, the people at large may not have confidence in the steps being taken by you to campaign against corruption. I have written about this to the Cabinet Secretary vide my letter dated 3-402016 (copy forwarded here) but I am not sure whether he has acted on my letter at all.
  
  
• Black money is stashed away by both political leaders and other public functionaries in the form of benami land and other real estate property in different States. You need a specialised investigating agency to trace those properties and force the culprits to face the law of the land. Demonetising higher currency notes alone may not suffice.
  
  
• As far as black money stashed away in offshore (foreign) accounts is concerned, I have alerted your investigation agencies about several State Chief Ministers and others having such accounts but the investigating agencies under the control of your own government have not responded till date. Inaction on the part of your government in this matter has already eroded public confidence in the earnestness with which your government has conducted itself in fighting corruption in high places. You may have to hasten to correct this public perception, not through sloganeering, but through tangible action.
  
  
• One way to curb corruption in government is by enforcing the sanctity of sovereign contracts in letter and spirit. I find that contracts are routinely allowed to be violated by way of political patronage, as it has happened in the case of the Production Sharing contracts (PSCs) of the Ministry of Petroleum & Natural Gas. Strict contract management is one of the ingredients of good governance and you could send a strong message in that direction.
  
  
• One source of corruption that has become rampant these days is the political patronage involved in PSU banks dispensing credit to corporates without exercising due diligence. One glaring example of this was the manner in which State Bank of India had flippantly signed an MOU in your presence in Australia to grant a billion dollar loan to the Adani group, without carrying out any due diligence. Under public pressure, SBI had to withdraw from that MOU but it is public knowledge how these PSUs banks have misused the so-called “Capital Debt Restructuring “ scheme and other versions of that scheme to expose public funds to the risk of becoming NPAs. There are conflict-of-interest situations between RBI and the PSU banks and the Finance Ministry and the PSU banks which need to be removed and PSU bank reforms undertaken urgently.

I hope that you will act on these suggestions so that your efforts to campaign against corruption and black money may yield the desired outcomes.

I am circulating this letter widely hoping that it will generated the much needed discussion and debate on this important subject.

Regards,
Yours sincerely,
EAS Sarma

Former Secretary to GOI
Visakhapatnam
12-11-2016