At that time I told him that over the two years there have also been a few posts that lauded the government - however I would not applaud empty announcements (often hyped up and largely intent not actions) but will do so on concrete steps/decisions/actions. He was not convinced. supporters never are.
And then front page of newspapers offered me a choice. Not just a choice - but it reminded me of another such step that even the supporters of Modiji overlooked as it did not catch the media attention. So here are the two recent developments that I wish to applaud the Modi government for
Case 1 : The curious case of "King of the Good Times" The fact that the noose is tightening around Vijay Mallya - the "live life kingsize" promoter of the now ailing Kingfisher Airlines. In many ways the case of kingfisher has become a classic case of crony capitalism in the public perception. It is widely believed that he diverted funds borrowed by the airline to other uses and that he is responsible for the airline drowning. Of course if true, this could not have happened without the connivance of the Bank officials who extended loans to his company. (here is a story that seems to cover most ground in the case). What has been frustrating is that while the airline staff was not paid salaries for months - in full public glare, Mr. mallya did not seem much concerned as he kept throwing lavish parties, launched calendars and bought IPL franchise. This even became a target of RBI governor Raghuram Rajan's comment on corporate responsibility.
The larger perception was that the UPA government dragged its feet in pursuing this case probably because of the political protection he enjoyed. So it is refreshing and welcome that multiple agencies
have moved towards bringing the guilty to the book. It is to the credit of the RBI Governor and to that of the Government that this case has reached this stage.
Of Course the Law should take its course and we must not pronounce Mr. Mallya as guilty and yet the action makes a forceful case for future defaulters to be cautious about their dealings. It is in the larger public interest that the case reaches its logical conclusion and the guilty be punished. If this happens - it would indeed be a first tiny step towards a revolution where the rich and the mighty might be cautious about cheating with impunity. In fact till about mid 2015 it appeared that Vijay Mallya would laugh his way out of the problem leaving the common man feel cheated and red faced.
So kudos to the Government in moving in the right direction in this case. Let's expect that more such cases/individuals will be pursued and be brought to books. Only, if that happens the country's financial system will undergo a revolution where genuine businessmen will one day be able to get capital more easily while willful defaulters will be brought to books speedily. The sceptic inside says this looks like a dream - well we need to wait for a couple more years to see if the Government allows similar and a few deeper cases to be brought to the books. However, this one is a great movement and so we need to remain hopeful.
Case 2 : The NSEL payments scam
On 13th Feb 2016 Government passed an order of merging National Spot Exchange Ltd. (NSEL) with its cash rich parent company Financial Technologies India Ltd. (FTIL). Of course many supporters (read bhakts) of the Modi Government would not even understand the import of this order - however it was a brave decision by Arun Jaitley led Ministry of Corporate Affairs (MCA). Here is the background
The Forward Markets Commission (FMC) in July, 2013 restricted NSEL from making fresh contracts available as they were likely in contravention of the Forwards Contracts Regulation Act. NSEL first changed its contract duration to comply, and then when it found customers leaving in droves, threw up its arms and shut down the exchange.
The trouble was - more than 5500 crores were due - and as things unfolded everybody realised that neither was there any money to payback nor were the spot trades backed by any real goods to settle the trades. Approx. 15000 investors were left in the lurch with no idea of how would they get back their returns. The role of the promoter of NSEL and FTIL Mr. Jignesh shah and of the CEO of NSEL Mrs. Anjanai Sinha and many promoters and industries behind the NSEL is doubtful and questionable. Read a detailed account of the scam here.
The fact is that while NSEL died as it was unable to honour the payments - its parent company FTIL is a cash rich and successful company. What this order means that the Government (MR. Jaitley)
has asked the Parent company to own up the liability of NSEL. In other words the Govt. is fixing the responsibility of the fraud on the management and owners of the company. Of course this will be challenged in the court by the FTIL management and they might have a valid case as well. But what is commendable is the stand that the MCA took in the case. They seem to have decided in the interest of the investors affected against the interests of the high and might again. What such steps do is repose faith or trust in the system.
Here again Law will take its own course - but the Government action has shown commitment to just and fair trading practices. If the stand is maintained consistently in the long run - this is good news for the Indian Economy. I think these are the changes (परिवर्तन) that Modiji stood for and must remain so. The pace and force in this direction has been slow and feeble and yet these two cases are a step in the right direction.
To be fair to the UPA Govt. both these steps were initiated by and during the tenure of the UPA government but in the larger public perception they were not going anywhere and the Government seemed to be lacking interest in pursuing the case. Also the NDA government did not seem to show much interest either in both cases and yet the bold steps taken in both these cases could not have come had they not have the support of the top leadership. So at least now NDA seems to be serious in taking concrete steps in that direction.
Whether these steps lead to a full fledged revolution upsetting the cart in the system, bringing about an attitude change among the high, mighty and corrupt - will be clear only with time. Yours truly remains sceptical that it would happen and yet these two developments keep the hope alive. Well done Jaitleyji and Modiji. Do ensure that the cases are presented strongly in the court so these people do not go free on technicalities. Please continue on the trail. Book more wilful defaulters - protect more investors - only then you will bring परिवर्तन successfully.