From Manmohan-vintage rouble scam to Narendrabhai's 'ethical incapacities'

javid Chowdhury records that the indo-us Rupee-Rouble trade Agreement was negotiated and many revisions made in the period when Manmohan Singh held a series of positions in the financial sector.

Published: 19th May 2013 06:56 AM  |   Last Updated: 21st May 2013 01:11 AM   |  A+A-

Reminiscences by civil servants are often marred by the ‘I’ factor. The eagerness to justify their mistakes usually detracts from the credit side. Javid Chowdhury (The Insider’s View-Penguin) falls outside the pattern. He does talk about the positions he held, but mostly to illustrate the wider philosophical view he presents about governance. His canvas is large and his approach analytical. This earns him the reader’s trust.

He pays touching tributes to the government servants he came to admire—from Atmarambhai, the headclerk so experienced and diligent that he was known as the ‘working collector’, to the famous  M G Pimputkar, held in awe by IAS trainees for his sense of integrity. But he also criticises the tendency among sections of the higher civil service to butter up Corporate Captains for post-retirement sinecures. He decries lobbyists for not  contributing “a lawful or ethical value addition” to   cases under consideration. The lobbyist operates “through a mix of trade-offs and pay-offs”.

Chowdhury shares with the reader the insights he gained from his vantage position. In the notorious Jain hawala case, 62 politicians and 18 government servants were found to be receiving hawala payments on a regular basis. These were not bribes on a quid pro quo basis as many of the recipients were not in positions of power at the time. In other words, there was no evident corruption in the transactions, but there were serious violation of foreign exchange laws.

Yet the CBI pursued the cases under the Prevention of Corruption Act and the cases “were thrown out by the court at the threshold itself”. Chowdhury cites provisions of the much stricter Foreign Exchange Regulation Act and asserts that prosecution under FERA would have produced immediate results. So why didn’t the CBI do so? Good question.

For that matter, how many of us knew that the Indo-USSR Rupee-Rouble Trade Agreement was “the largest value foreign exchange scam using a single modus operandi that has been played out in the history of India”? It led to “the draining away of about 40 million US dollars from the country in one year”.

India imported defence equipment from Russia against rupees, but under an arbitrarily denominated exchange rate. Russia built up a huge credit balance which it surreptitiously auctioned off for payment in US dollars. Officials in both countries benefited and so did the Russian government and financial fixers. The losers were Indians.

Chowdhury, who was Director of Enforcement then, proposed a simple solution to keep out the racketeers. An unusually quick reply from the Department of Revenue expressed outrage at the suggestion. Evidently, top officials were interested in the racket.

Somewhat shyly, Chowdhury records that the Rupee-Rouble Agreement was negotiated and many revisions made in the period when Manmohan Singh held a series of positions in the financial sector, from Secretary of the Department of Economic Affairs to Finance Secretary and finally Finance Minister. He makes no comment other than that the nature and size of the scam were known to the top people.

Chowdhury is a Gujarati and he has much to say about Narendra Modi’s ideas and actions. He says it with his usual adherence to the facts he knew. Here’s a gem. He was Secretary in the Union Health Ministry at the time of the 2002 riots. Modi did not allow the Union Health Minister to visit Shah Alam relief camp; the state health minister threatened to jump out of the car if the Central minister insisted on visiting the camp.

Providing a succinct account of the caste history of Gujarati politics, Chowdhury says that “Narendrabhai is from a sub-sect (of the OBC category) that is particularly excluded from the power structure” which makes his rise in the upper-caste oriented BJP “a freak deviation”. He faults Modi for “his several ethical incapacities”. But his main criticism is that Modi has little concept of the science of public administration, that his centralised model of governance will eventually leave Gujarat an administrative wasteland. In this year of election hype, who has ears to hear?

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