India: dynasty, corruption and plunder

A short history of looting and dynastic power in India

The Government of India’s Central Bureau of Investigation (CBI) Chief Mr. A P Singh on February 13, 2012 has acknowledged that Indians are the largest depositors of illegal money in banks abroad. With an estimated $500 billion, close to $ 40 billion in lost revenue, the money has been hoarded in tax havens. The colossal amount of money has been extorted out of the sweat, blood and tears of the metaphoric ’99 per cent’ of Indians.

In his magnum opus Discovery of  India(1946),the first prime minister of free India Jawahar Lal Nehru expressed his own anguish in detail about the corruption prevailing during British Rule. According to Nehru, ’loot’ (plunder) was the only objective of early British India colonials. The teeming millions of India were awfully poor and growing poorer while the microscopic minority was prospering under colonial rule. “Corruption, cruelty, callousness and a complete disregard of public welfare flourish and poison the air”, Nehru observed.

In 1950, A.D.Gorwala’s report observed that quite a few of Nehru's own ministers were corrupt. The Santhanam Committee, 1962 also pointed to the fact that ministers had enriched themselves illegitimately through nepotism. The Government of India tried its best to shield its ministers. V K Krishna Menon, Indian high commissioner to Britain in the early 1950s, bypassed protocol to sign a deal worth INR(Indian Rupee) 8 million with a foreign firm for the purchase of army jeeps. While most of the money was paid upfront, only a part of the total volume was supplied.  Jawahar Lal Nehru, now prime minister of India, forced the government to accept them. Soon after, in February 1956 Krishna Menon was inducted into the Nehru cabinet.

Nehru’s ‘benevolence’ at the expense of the country’s professed policy of aspiring to a socialist pattern of society, might have been aimed at securing his daughter’s smooth elevation to the highest prominence in Indian politics. To sustain such an ambition, other dynastic projects were also encouraged. Tavleen Sigh in her 2011 article “Time for dynastic democracy to die”, has judiciously observed that:

 “ When a parliamentary constituency becomes an inheritance, it becomes a private estate whose purpose is to benefit the family who owns it. And, the reason why most of our political parties have been turned into private property is because politics is the easiest way to make money in India." 

Thus mass-scale distribution of favours and concessions coupled by reciprocal favours, concessions, bribes, etc. triggered various corruptions and, inter alia, dependence on crimes and criminals became inevitable. The findings of British historian Patrick French in his 2011 survey are still quite consistent with the prerequisites of a dynastic democracy. Every Indian MP under the age of 30 is hereditary and two-thirds of Indian MPs under the age of 40 are from political families.

During the early 1950s, Indira Gandhi served as an unofficial personal assistant to her father Jawahar Lal Nehru, the then prime minister. In 1955, she became a member of the Congress Party's working committee and within four years, president of the party. This was a formative period, both for the country and the emerging Nehru-Gandhi dynasty. To mimic the tenets of a socialist democracy, massive investments were diverted in building social infrastructure like dams, national highways, mines, and so forth, dubbed as “temples of modern India”, seeming to replicate the Soviet model of planning. The licensing machinery was often the prime mover behind the parallel economy of corruption and black money.     

Nehru died in 1964, and was succeeded as prime minister by Lal Bahadur Shastri. In 1966, Prime Minister Shastri died unexpectedly during his official visit to Moscow. Indira Gandhi became the new Prime Minister. By 1973 vast areas of northern India, including the capital city, New Delhi, were rocked by demonstrations against high inflation, the poor state of the economy, rampant corruption, and poor standards of living. In June 1975, the High Court of Allahabad declared her guilty of illegal practices during the last election campaign, and ordered her to vacate her seat. There were demands for her resignation and Indira Gandhi's response was to declare a state of emergency to suspend democracy for an indefinite period. Political opponents were imprisoned and press was subjected to strict censorship.  During the emergency, Indira Gandhi’s second son Sanjay's influence on Indira and the government increased dramatically. According to Mark Tully, "His inexperience did not stop him from using the draconian powers his mother, Indira Gandhi, had taken to terrorise the administration, setting up what was in effect a police state.”

Indira Gandhi, holding both the posts of the Prime Minister and party president, herself controlled the party funds, creating the precedent for engendering money power in politics. After Indira Gandhi’s assassination in October 1984, her elder son Rajiv Gandhi was the ‘natural’ choice to grace the office of prime minister of India. V.P. Singh, Rajiv’ Gandhi’s finance minister, appointed an American detective agency, Fairfax, to investigate the illegal stacking of foreign exchange overseas by Indians. Rajiv promptly transferred V.P. Singh from finance to defence.  When as Defence Minister V.P.Singh, ordered another enquiry into various transactions, this was regarded as a body blow directed at the ‘first’ family of the nation, since Prime Minister Indira Gandhi herself had been defence minister in 1981. There was criticism of Singh’s conduct in the Cabinet meeting, and he soon resigned from government. A few days later, on 16 April 1987, the Bofors scandal surfaced.

Rajiv Gandhi and several others were accused of receiving kickbacks, and there was speculation that the amount was to the tune of INR.400 million, from Swedish company Bofors AB in reward for a contract to supply the Government of India with 155 mm field howitzer guns. Sten Lindstrom, Sweden's special prosecutor investigating the pay-offs associated with the sale of weapons by Bofors to the Government of India, revealed that a close friend of Rajiv Gandhi’s Italian wife Sonia Gandhi, Ottavio Quattrocchi had received kickbacks in the millions. Quattrocchi, in spite of substantial evidence against him, had managed to escape prosecution in India. Rajiv gave no public denial of his and his family’s involvement. Meanwhile, Sonia Gandhi has been ranked in the eleventh position in the list of world’s most powerful people by a Forbes report, August 2011.

The grand event of the New Delhi Commonwealth Games in 2010, was flooded by allegations of corruption. The Indian Vigilance Commission has found massive discrepancies in tenders and misappropriation of funds out of the budget of INR 700 billions. Next came the 2G Spectrum scam of INR 1760 billion in 2011, the  biggest scandal in India up to that point, involving the allocation of unified access service licenses. The former Telecom minister A.Raja in 2008 reportedly has breached norms at every level to allocate dubious 2G license awards at a throw-away price, pegged at 2001 prices.  Allegations that the Indian Home Minister, P Chidambaram was also guilty are undergoing investigation. Meanwhile, India dropped 11 places to be ranked 95th in the Transparency International Corruption Index, December 2011.

The present Nehru-Gandhi Dynasty supremo and Chairperson of the ruling United Progressive Alliance(of which the Congress Party is the major partner) - Sonia Gandhi - installed her most trusted man Manmohan Singh, a non-political economics teacher turned technocrat, as Prime Minister in 2004.  Apparently helpless and hesitant to tackle the mega-scams, Dr. Singh is in office until the 2014 general election, when the dynastic heir, the present General Secretary of the Congress party, Rahul Gandhi, is expected to be sworn in as prime minister of India. The game-plan has already been activated as the flattery of Congress politicians gets under way, projecting Rahul as the next prime minister, while  Rahul himself, of course, repeatedly denies that he has any such ambition. This comic strip episode reminds us of similar theatrics staged decades back when Congress leaders were busy discovering Rajiv Gandhi’s rare qualities as future prime minister despite the chorus of Rajiv Gandhi’s protestations.

Nehruvian socialism has been criticized in a 2011 article by Amartya Sen and Jean Dreze as it failed miserably to rise to such basic challenges as school education and healthcare. The evidence is certainly damning, to take just two examples. Binayak Sen in his 2011 paper ’Ethics, Equity and Genocide’ has observed that neonatal low birth weights “occurs far more commonly in specific communities, obeying the pressures of inequity and social injustice”. A 2011 New York University school of Law report estimated that more than a quarter of a million Indian farmers have committed suicide since 1996—“the largest wave of recorded suicides in human history”.

Shalini Randeria in her 2003 paper has categorically described India as a "cunning state". The cunning state’s nexus with transnational and national capital facilitates accumulation through dispossession in India under the pretext of economic growth. The erection of the so-called temples of modern India has been made possible through developmental terrorism to uproot the downtrodden population from their socio-ecological setting. Amit Bhaduri in his 2007 article ‘Development or Developmental Terrorism?’ also appeals for the envisaging of an alternative path of development.  

Could there be an Occupy Movement for the metaphoric ‘99 per cent’ of Indians waiting in the wings?

About the author

Arun G.Mukhopadhyay (arungm10@gmail.com) is formerly of the Indian Institute of Management, Calcutta.