Sunanda K. Datta-Ray | Can BJP govt get down to clean up graft in Bengal?

Such was Calcutta Corporation’s reputation when the eminent writer, Nirad C. Chaudhuri, went to work for it in the 1920s that the municipality was popularly known as “Calcutta Corruption”. Among non-English-speaking Bengalis, it was the “Chorporation”. Whether or not West Bengal’s new chief minister will be able to make any difference to this tarnished reputation, it isn’t the only institution that needs cleansing.

One reason why BJP spokesmen harp on the now ousted Trinamul Congress regime’s alleged waste of an astronomical Rs 25,000 crores on welfare, especially on non-existent or ineligible spongers, is to impress the public with a sense of chief minister Suvendu Adhikari’s good husbandry. Another is to pander to communal ideologues. It would be a feather in the Hindutva cap if some of these beneficiaries can be exposed either as illegal Bangladeshi migrants or Rohingya refugees from Myanmar, both being Muslim and anathema to the likes of Narendra Modi and Amit Shah, who would no doubt consider them “ghuspetiyas”, or intruders. These Hindutva stalwarts might also deem it logical to throw in a scattering of Bengali Muslims who can be accused of illicit trading in cattle or cattle flesh and who may even have benefited from Mamata Banerjee’s unseemly (since she bears a Brahmin name) generosity for those whom the twice-born dwija consider to be mlechhas.

But according to Paranjoy Guha Thakurta, probably India’s best known investigative journalist, and his professional partner, Ayush Joshi, the financial record of a Centre that sponsors Mr Adhikari is far from impeccable. They say that the State Bank of Sikkim, which was set up in 1968 by Royal Proclamation, is not subject to Reserve Bank of India audits and that there has been no federal oversight for decades. As a result, Mr Modi’s partial demonetisation on November 8, 2016 prompted a panic-stricken Pawan Chamling, the fifth chief minister of Sikkim, to write anxiously to the Prime Minister when he suddenly demonetised Rs 500 and Rs 1,000 notes.

The withdrawal of 86 per cent of the cash in circulation, as also ordered by Mr Modi, could bankrupt the 50,000 depositors who had deposited Rs 530 crores in the SBS. There would be a negative impact on no fewer than 1,800 elderly pensioners’ accounts. Mr Chamling warned, too, that Sikkim’s rural residents had “no alternative financial lifelines”.

When Indira Gandhi’s government annexed Sikkim in 1975 to make it the 22nd state of the Indian Union, a new Article 371F of the Constitution of India was enacted to discourage too many awkward questions. Article 371F guaranteed that all pre-merger laws would remain active until formally repealed by a competent legislature. Guha Thakurta and Joshi claim that the SBS, having been born out of a royal decree and not through standard corporate procedures, the Banking Regulation Act of 1949 did not apply to it. The SBS was essentially an “onshore-offshore” bank operating within India but outside the purview of the country’s banking laws.

The two investigative journalists, however. had access to new and hitherto unknown documents, including a letter dated September 20, 2012, in which Shashank Saksena, a director in the Union finance ministry, wrote in confidence to the RBI asserting that the SBS was “registered as a company under the Sikkim Companies Act”, and should therefore be regulated by the RBI.

It took the latter two years to correct this fundamental misunderstanding. On December 19, 2014, R. Gandhi, then an RBI deputy governor, wrote to the secretary, financial services, in the ministry of finance, to set the record straight. Mr Gandhi explained that the SBS was not a company under either the Companies Act of 1956 or the later Companies Act of 2013. It was a constitutionally protected corporate body that rendered standard regulatory enforcement applicable to other banks impossible.

The two journalists tell us that the SBS saga has now culminated in an ongoing case before the Bombay high court in the form of Writ Petition No. 2588 of 2017, Ashok Kumar Jain, vs Reserve Bank of India & Others. Mr Jain, an anti-corruption and Right to Information activist, and a former Damodar Valley Corporation employee, told Guha Thakurta and Joshi that he had learnt from “reliable sources” that certain past and present DVC employees had obtained illegal gratification and had parked their black money in the SBS to evade regulatory scrutiny. Without elaborating on the evidence, he then added somewhat mysteriously that “details will be disclosed at the appropriate time”.

Nevertheless, in his petition, Mr Jain had made a series of what he believes are more substantive allegations: the SBS was operating like “a domestic tax haven”, akin to a “Swiss bank”, that it was riddled with “Himalayan loopholes” and offered absolute secrecy while refusing to disclose the identities of its depositors. Mr Jain alleged that because SBS operated entirely outside the RBI’s and the Banking Regulation Act’s purview, it had become a “safe haven for ill-gotten wealth” and potentially even terrorist funds.

Ironically, these abuses were unknown in the Chogyal’s era. They are a phenomenon of India-controlled Sikkim. That is what makes cleaning the banking Augean Stables as necessary to restore confidence in India’s moral backbone as repairing and cleaning roads is essential to make everyday living less of an existentialist challenge. The new BJP government in West Bengal has not mentioned the simpler tasks of governing possibly because tackling them might not be guaranteed to earn popularity, there being little glamour about doing your duty. Instead, there is talk of shifting beneficiaries from the former chief minister’s “Lakshmir Bhandar” to her successor’s “Annapurna Bhandar”, as if merely switching names can alleviate poverty and ensure that everybody can greedily thrust their grubby fists into the same bag of scarce resources.

Calcutta (or Kolkata) is not unlike the Paris, of which the Emperor Napoleon’s arch enemy Field Marshal von Blucher is said to have remarked wonderingly: “What places to plunder!” True, there might be no obvious looting of the stately buildings that the British left behind and which are now called “Lok Bhavans” with mock humility, but the denuding is much the same.

Why does West Bengal’s new state government not commit itself to repairing pothole-ridden roads, restoring pavements, reviving the old British-Indian practice of sweeping and washing both at crack of dawn every day and replacing Kolkata’s ramshackle buses, dilapidated yellow taxis and badly dented bedbug-infested autos with decent transport? That would indeed be serving the people.