PM Modi, in his speech in Parliament, last year, outlined why it was not tenable to have Indian Administrative Service officers (“babus”) run enterprises of all kinds. During the run-up to the 2014 election too, Modi repeatedly emphasized that the government has no business to be in business. And while the pace of disinvestment and privatisation have been the subjects of much debate, there seems to be a clear policy push based on this worldview. The pandemic has also provided the government a reason, and an opportunity, to push ahead with larger second-generation structural reforms.
But the privatisation announcements have also led to a backlash — with Opposition parties and trade unions, in particular, raising issues of crony capitalism, undermining of worker rights, and employment prospects. Needless to add, however, that all these allegations by a fractious Opposition are completely baseless. Decades back, the balance of payment (BoP) crisis in the early 1990s changed the official narrative about PSUs — from “temples of modern India” to “the government has no business to be in business”. To bring the economy back on track, the then PM, PV Narasimha Rao’s government (June 21, 1991- May 16, 1996) launched measures to end the era of license-quota raj and encourage privatisation.
The Congress government, which mopped up a sum of Rs 2500 crore in 1991-92 through disinvestment of equity holdings in PSUs, made it clear that it would pursue the process of gradual disinvestment of government’s stake from public sector enterprises. “The disinvestment in public sector equity undertaken in the current year [1991-92] has been successfully completed. There is scope for continuing this process in 1992-93 with a view to raising non-inflationary resources for development,” the then Finance Minister Manmohan Singh said, in his Budget speech on February 29, 1992. If raising resources via disinvestment was right in 1992, why is it wrong in 2022? The rabid hypocrisy of Congress is out in the open. It opposes privatisation today, only because it is no longer in power.
The industrial policy announced on July 24, 1991 had already paved the way for privatisation: “Government will endeavour to abolish the monopoly of any sector or any individual enterprise in any field of manufacture, except on strategic or military considerations and open all manufacturing activity to competition.” The message of the industrial policy to PSUs was clear — perform or perish. Finance minister Singh gave out a revised disinvestment target in 1992-93 was of Rs 3500 crore. Equity varying between 5% and 20% in selected PSUs was disinvested in two phases — December 1991 and February 1992. The process continued and the target increased to Rs 7000 crore for 1995-96. In the three financial years ending March 31, 1995, the then Central government divested its equity stake by 0.26% in Indian Railways Construction Co. Ltd and by 31.46% in Bharat Heavy Electricals Ltd. In all, 39 PSUs saw disinvestment in some measure or the other to mop up Rs 9793 crore. By then, disinvestment was already an integral part of the economic policies of successive governments.
After assuming the charge in June 1996, the HD Deve Gowda government set up a Disinvestment Commission under GV Ramakrishna and 40 PSUs were referred to it for advice, which submitted its first report on February 21, 1997. The then Finance minister, P Chidambaram said in his Budget speech on February 28, 1997: “The Commission has submitted its first report. It has made specific recommendations in respect of three companies. We intend to proceed with the disinvestment in these companies along the lines suggested by the Commission.” If Chidambaram thought disinvestment was a correct economic policy stance way back in 1997, why is he maligning the Modi government for doing the same in 2022? The simple answer is again this: Congress chooses to oppose anything that PM Modi does, driven by no logic but only by a visceral hatred for the Modi government, as the Congress scion Rahul Gandhi realises he has been electorally vanquished for good.
The Atal Bihari Vajpayee government classified PSUs into two categories — strategic and non-strategic and decided to gradually offload its stake in non-strategic firms. Presenting the first Budget of the Vajpayee government on June 1, 1998, the then Finance Minister Yashwant Sinha said, “Government has also decided that in the generality of cases, the government shareholding in public sector enterprises will be brought down to 26%. In cases of public sector enterprises involving strategic considerations, the government will continue to retain majority holding.” Today the same Yashwant Sinha, who is now a member of TMC and no longer with the BJP, accuses the Modi government of selling off India’s crown jewels, which is again, just another preposterous allegation. If disinvestment was good when Yashwant Sinha was the FM, how can it be bad, now that Nirmala Sitharaman is the FM?
Finance Minister Sinha kept a disinvestment target of Rs 10,000 crore in 1999-2000. “This will help the government to fund the requirements of social and infrastructure sectors. Equally important, it will lead to improvements in productivity and profitability of these enterprises and also to the further development of domestic capital markets,” he said on February 27, 1999. The next Budget (2000-01), for the first time, used the word privatisation along with disinvestment, under Sinha. What a sad commentary of affairs that the TMC of which Sinha is a part of today, indulges in rabble-rousing against the Modi government, while hailing Sinha’s economic policies of yore! So when Sinha did it, privatisation was right, but today when Nirmala Sitharaman does it, privatisation becomes an anathema! Why?
“The procedure for privatisation of public sector enterprises has now been considerably streamlined. To maximise returns to the government, our approach has shifted from the disinvestment of small lots of shares to strategic sales of blocks of shares to strategic investors,” Sinha said while delivering his Budget speech on February 28, 2001. By then, the government approved the privatisation of 27 companies. These companies included among others, , Air India and Maruti Udyog Ltd. By February 2002, the government completed strategic sales in seven public sector companies and some hotel properties of the Hotel Corporation of India (HCI) and the India Tourism Development Corporation (ITDC).
Between 2001 and 2004, under the Vajpayee government and before the Congress took charge, India saw disinvestments of government’s stake in several companies, including strategic sale of Bharat Aluminium Co Ltd, CMC Ltd, Hindustan Zinc Ltd, three properties of HCI, 18 properties of ITDC, Indian Petrochemicals Corp Ltd (IPCL) and Paradeep Phosphates Ltd, with a total collection of a little less than Rs 21,200 crore.
The Manmohan Singh-led United Progressive Alliance (UPA), which had a significant presence of the Left parties, assumed power in mid-2004, actually had disinvestment of PSUs, enshrined in the National Common Minimum Programme (NCMP). Today that very Chidambaram and rabid Leftists are throwing baseless insinuations, that the Modi government is selling PSUs for a pittance, which is false. “Disinvestment and privatisation are useful economic tools. We will selectively employ these tools, consistent with the declared policy. As a first step, I propose to establish a Board for Reconstruction of Public Sector Enterprises (BRPSE). The Board will advise the government on the measures to be taken to restructure PSEs, including cases where disinvestment or closure or sale is justified,” said Chidambaram, as the FM, in the first Budget of the Manmohan Singh government on July 8, 2004. Chidambaram also announced selling a minority stake (5%) in Navaratna company NTPC Ltd to raise about Rs 4000 crore. In November 2007, the Congress government constituted the National Investment Fund (NIF) into which the proceeds from disinvestment of government equity in central public sector enterprises (CPSEs) were deposited. It was said that three-quarters of the annual income of the NIF would be used to finance select social sector schemes that promoted education, health, and employment. However, it is a different story altogether that disinvestment took a backseat in the first term of the Manmohan Singh government, and the money raised by NIF was frittered away by a corrupt Congress regime. The word disinvestment came back again under an inept Congress dispensation, in the interim Budget speech of then Finance Minister, Pranab Mukherjee, on February 16, 2009. He informed the House that a corpus of Rs 1815 crore could be collected in the NIF as on December 31, 2008.
The UPA-2 in 2011-12, under Pranab as FM, raised the disinvestment target to Rs 40,000 crore, but could not manage even half of it, putting thereby, pressure on the fiscal deficit.“The combined effect of lower tax and disinvestment receipts and higher expenditure, mainly on account of subsidies, has pushed the fiscal deficit to 5.9% of GDP in the Revised Estimates for 2011-12,” Mukherjee said in his Budget speech on March 16, 2012. The Narendra Modi government, which came to power in mid-2014 with a massive mandate, took a comprehensive policy for disinvestment by rechristening the administrative arm as the Department of Investment and Public Asset Management (DIPAM).In his Budget speech on February 29, 2016, Finance Minister Arun Jaitley said, “We will adopt a comprehensive approach for efficient management of government investment in CPSEs by addressing issues such as capital restructuring, dividend, bonus shares, etc. The Department of Disinvestment is being renamed as the ‘Department of Investment and Public Asset Management (DIPAM)’.” The department formally started functioning on April 14, that year. Jaitley also laid the basic contours of the government’s disinvestment policy. It was no longer limited to strategic sale or dilution of the government’s minority stake in the company. It also included monetisation of assets owned by CPSEs. “We have to leverage the assets of CPSEs for generation of resources for investment in new projects. We will encourage CPSEs to divest individual assets like land, manufacturing units, etc. to release their asset value for making investment in new projects,” Jaitley said, on February 29, 2016.
There was another structural change, the NITI Aayog took the place of erstwhile Disinvestment Commission, in identifying the CPSEs for strategic sale. Besides, the disinvestment targets became increasingly ambitious and achievable too. The Budget target for 2020-21 was R 2.10 lakh crore, but it was revised to Rs 32,000 crore mainly due to adverse market conditions because of the Covid-19 pandemic. Finance Minister Nirmala Sitharaman, on February 1, 2021, announced an elaborate roadmap for disinvestment in the coming fiscal year. “In spite of Covid-19, we have kept working towards strategic disinvestment. Several transactions namely BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited among others would be completed in 2021-22,” she said in her Budget speech, that year. She said, besides IDBI Bank, the government would take up the privatisation of two public sector banks and one general insurance company in 2021-22. Sitharaman announced a clear roadmap for disinvestment of all non-strategic and strategic firms. “We have kept four areas that are strategic where bare minimum CPSEs will be maintained and rest privatised. In the remaining sectors all CPSEs will be privatised,” she said. To cut to the chase, barring the COVID years, the Modi government’s achievement of disinvestment-related targets has been always on track, and that in turn ensured that the fiscal deficit was largely under 4.5% during PM Modi’s first term in office, which is again great news.
Coming back to the Congress, Indira Gandhi followed Nehru’s wrong footsteps. With effect from July 1969, she nationalised 14 banks through the Banking Companies (Acquisition and Transfer of Undertakings) Act. The law to that effect was enacted in March 1970. The so-called reasons for this nationalisation were to provide accelerated credit to agriculture, encourage small industry and boost exports. Unfortunately, none of these objectives were realised. Despite this policy disaster, Indira followed it up with another round of bank nationalisation in 1980, leading to the nationalisation of six more banks. Indira Gandhi also nationalised general insurance in 1972, via the General Insurance Business (Nationalisation) Act, 1972. She also nationalised coal mines and Coal India Limited (CIL) in 1973. Again, it is the Modi government that last year, denationalised CIL, to incentivise productivity and disincentive inefficiency.
Air India has come full circle, back into the arms of its founders, the Tatas. A bold and brave move by the Modi government and if done right, the deal could, in the long run, prove to be bountiful for the new owners too. Air India was founded by industrialist and aviator J.R.D. Tata in 1932 as Tata Airlines. In 1953 when the then government of Jawaharlal Nehru nationalised Air India, JRD fought valiantly against it. However, Nehru, a very bad listener who rarely listened to good advice, went ahead and decided to nationalise it, despite the fact that Air India was a solid, profit-making airline in 1953. What is worse, Nehru summarily merged a profit-making Air India with a bunch of other loss-making airlines, forming a large and clumsy State corporation that was destined to fail, right from the start. Almost seven decades after it was nationalised, with Air India now going back to the Tatas, Prime Minister Narendra Modi has showcased why he is both a staunch welfarist and a straight talking, outstanding reformist, blending the two roles, seamlessly. So is the Modi government selling family silver? No! Is the Modi government extracting the best possible usage of taxpayer funds by getting out of unproductive and loss making businesses? Yes! Suffice to say therefore that while the immediate aim of the partial disinvestment of the government’s stake in PSUs to institutional investors, has primarily been to raise non-inflationary resources, the long-term purpose of disinvestment is to bring in efficiency, accountability, and professionalism in these State-run enterprises. Indeed, the State has no business being in business and that has been best amplified by Prime Minister Narendra Modi, for good reasons and more.
(First part of the article was published last week)
The Writer is an Economist, National Spokesperson of the BJP, and the Bestselling Author of “The Modi Gambit”. Views expressed are the writer’s personal.
The Daily Guardian is now on Telegram. Click here to join our channel (@thedailyguardian) and stay updated with the latest headlines.
For the latest news Download The Daily Guardian App.
THERE MUST BE ACCOUNTABILITY FOR THE DELHI FIRE INCIDENT
The fire that broke out in an illegal factory in the Mundka Village close to the Delhi-Haryana border and claimed at least 27 lives has once again underlined the need for greater accountability. What has to be probed and ascertained is that how was this factory running in the native village of former Chief Minister, the late Sahib Singh Verma, and how did callous officials permit its functioning, knowing fully well that it did not have the required clearances. As always, the blame game has started between the Delhi government controlled by the Aam Aadmi Party and the BJP run, Municipal Corporation. The point here is that whoever is responsible must be identified and punished. Normally speaking the buildings that are constructed need to have the approval of the civic bodies. Whether this particular structure had those pre-requisite permissions must be found out.
The Delhi government has ordered a Magisterial probe while the BJP is demanding an inquiry by a sitting High Court Judge. The issue is that whoever conducts the inquiry would obviously reach the same findings. In the past, there have been incidents from which the authorities have refused to learn. It is only after something horrific happens that the bureaucracy wakes up and cracks the whip. There are a large number of buildings including many in the New Delhi Municipal Council area which do not have the clearances of the Fire Department but are fully functional. Why is this kind of oversight being permitted.
The Delhi Fire service along with the civic agencies and the relevant departments of the Delhi government must have a coordinated approach to the matter. One cannot be risking innocent lives just because the officials have been found napping. In the early 1980s, a major fire had broken out in the multi-storeyed Gopala Towers at Rajendra Place. The Fire department found itself inadequate since it did not have the equipment to tackle high-rise fires. A helicopter was pressed into service to sprinkle water but its rotors fanned the fire, making the rescue operations even more difficult. Subsequently, the government-sanctioned money to the Fire department for the purchase of the Snorkels and Turn Table ladder vehicles for such an eventuality. The Delhi Fire Service is comparatively better equipped than its counterparts in Gurgaon and NOIDA which both have multiple multi-storeyed structures. One cannot but shudder with fear to imagine a scenario if this kind of unfortunate happening was to take place. The Centre and the State must understand that the Emergency services should always be given top priority and kept in the best state of readiness. There is no purpose served if the authorities wake up after many lives have been lost. The Police Control Room vans are always available for emergency assistance but the Fire services and the Ambulances also need to be upgraded to meet any kind of untoward situation. The Mundka fire is a wake-up call which should ensure that the various agencies of the government instead of shifting the blame on each other, come together to have a foolproof solution in the future. The temperatures are soaring and the NCR is a burning furnace. Therefore, more fire incidents may take place. But there has to be preparedness to deal with the situation. A crackdown on structures lacking the permissions must be done without any delay and lives should not be jeopardized because of apathy of the officials.
Can India afford the scrapping of Article 124A?
Nobody would doubt the intention of Prime Minister Narendra Modi to review the Sedition Law (Section 124A), but creating a narrative to say that the law would be scrapped is juvenile. Sections of intelligentsia including judges have argued for review to check its misuse. And the review should not be projected as an exercise to scrap the law.
This Government has no love lost for archaic laws of the British Raj. It has already scrapped more than 1500 such laws from the statutes making the life of an ordinary citizen easier. A similar number of such laws is awaiting to be removed. More than 25,000 compliance burdens have been removed. The symbol of power depicted by red and blue beacon lights has been scrapped for most power structures in the Government including the ministers.
Why the sedition law stays is not a matter of surprise! First Prime Minister Jawaharlal Nehru who was imprisoned by the British and witnessed incarceration of freedom fighters due to misuse of this law saw virtue in bringing restrictions on Article 19 that championed freedom of speech and expression. The very first amendment to the constitution in 1951 was to curb this freedom in the guise of reasonable restrictions. The provision of the constitution of India had become effective from 26 January 1950. The first amendment was made on 18 June 1951.
The provocations were mainly two publications that criticized Nehru on different counts. The first was the Cross Roads magazine which published a series of articles in February 1950 criticizing the Madras government for indiscriminate firing that killed 22 Communist prisoners dead in Salem Central Jail. The State Government banned the circulation and distribution of the magazine. The Second was the Organizer Magazine which criticized the Government’s policy on Pakistan. They were asked to get prior clearance (pre-censorship) before publishing anything on Pakistan policy. The Supreme Court judgements in both cases on 26 May 1950 came against the Central Government. Reasonable restrictions on Fundamental Rights were Nehru’s response to these developments.
Indira Gandhi was unabashedly bold in asserting her authority against adversaries. She made Section 124-A a cognizable offence. Under the new CrPC of 1973, which came into force in 1974, the police could now arrest any person without a warrant. This was more stringent than the provision under the British that mandated a warrant from the magistrate. What was her provocation is not known but she was not liking the way her government was being criticized by the opposition? As a sharp lady who knew no limits to her political ambitions, she wanted to empower herself. She used this law indiscriminately during the Emergency 1975-77 to maim the voice of whoever opposed her government.
The five-judge bench of the Supreme Court in its judgement in the Kedarnath case in 1962 upheld the validity of this law even as it suggested precautionary measures to check its misuse. Kedarnath had accused the Congress of corruption, black marketing and tyranny. The Court held that the purpose of sedition law was to prevent subversion of a lawful government because “the continued existence of the Government established by law is an essential condition of the stability of the State”.
The purpose of Sedition law is to prevent subversion of the State. Let us look at what Section 124A says: “Whoever by words, spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards, the Government established by law in India, shall be punished with imprisonment for life, to which fine may be added, or with imprisonment which may extend to three years, to which fine may be added, or with fine.”
This gives wide powers to the Executive to use this provision against any of its critics. Whether one’s words or speech is creating disaffection is a matter of interpretation and subject to the Courts finding it to be valid which again is subject to interpretation depending upon the conscience of the Judge. The Supreme Court has said there must be “incitement to violence” or “disruption of public order”. What can incite violence in a country ridden with conflict and diversity is a matter or subjective interpretation.
Nehru was opposed to invoking the law of sedition but he did not do anything to remove the law from the statute. Even those who believed in his ideology found the law to be useful to tackle dissent. In recent times, sedition cases were lodged against 9000 people in 2012 when the United Progressive Alliance (UPA) government led by Congress was in power at the Centre. P Chidambaram and Kapil Sibal, who are vociferously advocating scrapping of sedition law were Home Minister and Law Minister respectively during the UPA regime. The agenda to scrap figured in 2019 in the Congress manifesto and not before that.
People were agitating in 2012 against the setting up of nuclear power plant at Kudankulam (Tamil Nadu). A fact-finding committee of independent people had documented that FIRs were lodged against 55,795 people for participating in the agitation. While close to 23,000 people were arrested, about 9000 were booked under Section 124A. The reason was “waging war against the Government of India”.
The sedition clause has indeed been used by the Modi Government as well. But the Government has been facing unheard-of opposition by vested interests backed by political forces that have lost out in the race for power. For example, what should the Government do if some vested interests come and opposed a law passed by both houses of parliament? The anti-Citizenship Amendment Act (CAA) had no basis and was based on speculation and supported by vested interests.
Not only there was an attempt to subvert a democratically elected Government’s right to legislate, but there was also a disturbance to public order since people came on the busy streets and not at designated protest sites to lodge their opposition. The same was the case with the issue of Triple Talaq. Should the Government not look at the ISI and Khalistan connection of the farmers’ agitation that shamed the country by its attack on the Lal Quila? Is mobocracy going to be the new norm in the name of democracy?
Modi has never criticized dissent. Also, criticism of the Prime Minister or various ministers and the Government’s policies never falls in the category of sedition. But if there is a conspiracy to weaken the country by presenting an image that damages our pride, the Government cannot sit idle. While anger or frustration must find a vent, it should not lead to becoming tools in the hand of anti-India forces. This is here that the law of sedition is important.
The misuse of law was evident when Rana couples in Maharashtra were jailed for threatening to recite Hanuman Chalisa in front of the chief minister’s residence. How can the chanting of Hanuman Chalisa disturb peace in a country where every Muslim knows the culture and tradition of the country. Similarly, how can a tweet by Tajinder Singh Bagga against Delhi chief minister Arvind Kejriwal become the ground for a sedition FIR? Intolerance of Mamata Banerjee, chief minister of West Bengal, has also found expression in lodging sedition FIR against critics.
The BJP too has its share of sedition cases. But such cases have not been lodged due to personal reasons or in acts of vendetta. Choices of abuse have been hurled by losers at Prime Minister Modi. These have not become the reason for any sedition FIR. It is only when someone shouted a slogan against the country’s unity or supported terrorism in Kashmir or Naxalism in other parts of the country that the cases have been lodged. Bhima Koregaon case is an example. There were provocative slogans and caste riots as a result of those slogans. The cases were not lodged due to animosities or political reasons.
People talk of the Disha Ravi case. She may be given the benefit of the doubt. But is it not true that she had been a part of the toolkit meant to support farmers’ agitation and defame the Government? Was Disha Ravi not aware that she was doing the wrong thing by aligning with Greta Thunberg who was also a tool of international operators sitting in Canada? Activist Yogendra Yadav has accepted that their job was to create a pitch to bring down the Yogi government in Uttar Pradesh but the batting was to be done by Samajwadi Party chief Akhilesh Yadav. Will it not come under sedition?
The Leftist echo system is such that they can make louder noise because of their presence in media and elsewhere. But this is good since this would allow everyone to have a fresh look at the sedition law. And the best is it is coming at a time when the country is celebrating Azadi ka Amrit Mahotsava on completing 75 years of the country’s independence. The Prime Minister has demonstrated that he is committed to reforms.
“The Honourable Prime Minister believes that at a time when our nation is marking ‘Azadi Ka Amrit Mahotsav’ (75 years since Independence), we need to, as a nation, work even harder to shed colonial baggage that has passed its utility, which includes outdated colonial laws and practices,” the government affidavit before the Apex Court said. The Court has also quoted extensively from the government’s affidavit and has shown appreciation to balance individual liberty with the country’s security concerns.
But those who are trying to create momentum for the scrapping of the law would be in for surprise. The country is against misuse and rightly so. While putting the law on hold, the Supreme Court said: “There is a requirement to balance both sets of considerations (security interests and civil liberties), a difficult exercise. The case of the petitioners is that this provision of law dates back to 1898, pre-dating the Constitution itself, and is being misused. The attorney general had also, on an earlier date of hearing, given some instances of glaring misuse of this provision, like in the case of recital of Hanuman Chalisa”.
The conviction rate under sedition law is indeed very less. It is also true that in most cases the law becomes a political tool to harass adversaries. But is scrapping the law the solution? Will it not be like throwing the baby out with bathwater? With the proliferation of social media, we have seen what it is capable of doing. If there is no fear there would be no disincentive to become a tool in the hands of breaking India forces. If some people are trying to break India and campaign actively for its disintegration, should it not fall under sedition? If some people try to defame the Indian army to damage its reputation, should it not fall in the category of sedition?
Is it not true that the country has witnessed the Partition and the wounds of partition is refusing to die? If the country gives asylum to Hindus and other persecuted minorities from Pakistan and Bangladesh and some vested interests oppose it as a part of a design to undermine the government, should it not fall within the category of sedition? The country has witnessed violent revolts against the Indian State whether in the North East, the Naxal belt of Central India, and terrorism in Jammu and Kashmir. Whether supporters of these divisive movements should not be booked under sedition?
Having a view of these issues is one thing but becoming a tool to strengthen these movements is another. The Indian State is the combined will of those who cherish liberal values and believe in democracy. Should their trust in the State be thwarted just to please certain sections of the society out to destroy the very fabric? This is the issue any review should undertake seriously.
Laws are made with the best of intentions. But when laws get misused, checks and balances are created as per the situation that evolves. The sedition law also needs a similar look. An example is 498A. The law was enacted with the best of intentions to given justice to women folks. Soon it became a tool of exploitation due to false cases being lodged causing a lot of hardship to families. The Court intervened and came up with guidelines to check its misuse.
The writer is the author of “Narendra Modi: the GameChanger”. A former journalist, he is a member of BJP’s media relations department and represents the party as spokesperson while participating in television debates. The views expressed are personal.
The sedition law: Congress versus BJP
PM Modi’s historic decision to seek a re-examination of the archaic sedition law qualifies as a transformative moment in the quest for the fine balance between free speech and national security.
In a significant development, the Modi government told the Supreme Court via an affidavit on May 9, 2022, that it has decided to re-examine and reconsider Section 124A of the Indian Penal Code (IPC) which criminalises the offence of sedition (SG Vombatkere vs Union of India). “The government of India being fully cognizant of various views being expressed on the subject of sedition and also having considered the concerns of civil liberties and human rights, while committed to maintain and protect the sovereignty and integrity of this great nation, has decided to reexamine and reconsider the provisions of Section 124A of the Indian Penal Code which can be done only before the competent forum,” the affidavit said.
The affidavit was filed in response to a batch of petitions challenging the constitutionality of the colonial provision. In the affidavit, the Modi government requested the Supreme Court not to invest its time in examining the validity of Section 124-A for the time being and to await the exercise of reconsideration being undertaken by the government of India.
The Supreme Court had while issuing notice in the matter in July 2021 questioned the Central government on whether the law was needed 75 years after independence. The Court had also sought the assistance of the Attorney General in the matter. The Court is currently considering whether the matter should be referred to a Constitution Bench of five or more judges. This is in view of the 1962 verdict of the top Court in Kedar Nath Singh versus the State of Bihar, in which a 5-judge Constitution Bench upheld the validity of Section 124-A. The current case before the apex Court is being heard by a 3-judge Bench. The Central government’s second senior-most law officer, Solicitor General, Tushar Mehta had earlier filed a note before the Court stating that the Kedar Nath Singh judgment has stood the test of time and was applied till date in tune with modern constitutional principles. The SG pointed out that only a bench of co-equal strength of Kedar Nath Singh can therefore pose any doubts on the verdict.
Beyond the semantics, it is to the Modi government’s credit that over 1500 outdated laws and over 25000 archaic compliance burdens that reeked of a colonial mindset have been scrapped since May 2014, when PM Modi stormed to power. Various offences which were causing mindless hindrances to people have been de-criminalised, including many sections of the Company Law. The Modi government, contrary to what jaded Leftist historians peddle, has always been open to both criticism and scrutiny. On sedition, concerns of civil liberties and human rights’ activists have been taken on board by PM Modi at regular intervals and the petition filed in May 2022, in the apex Court, amplifies as much.
In the Kedar Nath Singh vs State of Bihar case in 1962, a Constitution bench had upheld the sedition law. The Centre in its initial affidavit had said the Kedar Nath verdict came after testing the constitutional validity of 124-A from angles. So is the Centre now deriding the Kedar Nath case verdict? Absolutely not. All the Centre is doing now, is to ensure a fine balance between national security and free speech, within the broader framework of what the Kedar Nath verdict sought to do in any case. The direction to “re-examine and reconsider” the provisions of the sedition law came directly from Prime Minister Narendra Modi and the government will “suitably” take into account the views of stakeholders and ensure the sovereignty and integrity of the country is preserved while looking into Section 124A of the IPC, Union Law Minister Kiren Rijiju reiterated. “The government will reconsider and change the provisions as per the need of the present time. Because there are lots of views coming up,” Rijiju, further added. Clearly, PM Modi, a true champion of civil liberties, has, by putting his personal weight behind the need for whittling down the sedition law, shown why he is not only a progressive thinker but is also far more contemporary and modern than what his critics credit him with.
The Congress Party and its ecosystem of the Tukde Tukde gang infamy, have no right to give sermons to others. During the Anna movement, those who were not toeing the UPA line were subjected to bullying, harassment, intimidation and arrests. All this happened under the watchful eyes of the UPA. Needless to add, if there is one party that is the antithesis of freedom, democracy, and respect for institutions, it is the Indian National Congress. This Party has always stood with Breaking India forces and left no opportunity to divide India. Who brought in the First Amendment? None other than Pandit Nehru in 1951! It was Sangh ideologue SP Mookerjee & the Jana Sangh which stood in opposition to this measure, aimed at curtailing freedom of expression. Nehru also dismissed the democratically elected government in Kerala. It was the Indira Gandhi government that made Section 124-A a cognisable offense for the first time in India’s history. This happened in the new Code of Criminal Procedure, 1973, which came into force in 1974. Has Congress ever bothered to even express regret,for crushing the democratic ethos of this nation repeatedly? The answer is, no.
When it comes to trampling over free speech, Indira Gandhi was second to none. We all know about the horrific 1975 Emergency but does anyone also know that she imposed Article 356, over 50 times? She came up with the idea of a “committed judiciary” to weaken the Judiciary, our third pillar! What an irony that Congress acolytes are today preaching about an independent judiciary! If any government has indeed upheld the sanctity of the judiciary,it is undoubtedly, the Modi government. The UPA government has the worst track record of filing sedition cases. In 2012 alone, over 56000 people were arbitrarily detained, over 23000 were arbitrarily arrested, with over 9000 slapped with sedition charges and all this for simply protesting against an upcoming nuclear power plant that was coming up in Tamil Nadu, at that time. The debate here is not about harnessing nuclear energy for productive purposes– of course with checks and balances,nuclear energy needs to be harnessed for the greater good.The debate here is about the fact that the Congress government used the sedition law as a vicious tool to curb dissent.In sharp contrast,under the Modi government ,there were barely 326 sedition cases that were filed between 2014 and 2019.
Senior advocate Mohit Mathur said that while it falls within the Court’s domain to test the constitutionality of a legal provision whenever a challenge is raised before it, the Centre may be allowed to examine the issue at its end. Advocate Sherbir Panag, a financial crimes’ lawyer, called the Centre’s stand a “step worth being applauded” as he claimed that it is better if the law of sedition is dealt through the “legislative process” in a time-bound manner. One can argue back and forth but the hard truth is that no government in India, since independence, has come out and openly talked about a review of the sedition law that was put into effect by Thomas Macaulay, way back in 1870. Hence, for the Modi government to take the bold and progressive stance of wanting to re-examine the sedition law, speaks volumes about its commitment to free speech. Those who claim the Modi government preempted the apex Court in wanting a review of the sedition law are clearly missing the point. Do not forget that, in any case, it is the duty and the right of the Central government to frame laws and legislations. The apex Court, has the right to strike down or modify or build in statutory safeguards, as the case may be, only if the laws framed by the Central government are challenged on valid grounds.
The Supreme Court has been hearing a clutch of pleas challenging the validity of the law on sedition which has been under intense public scrutiny for its alleged misuse to settle political scores by various governments in the past. The top Court in 1962, upheld the validity of the sedition law while attempting to restrict its scope for misuse. Even in the May 2022 observation, all that the apex Court said was that, the government must seek to restrict the use and scope of the sedition law. Nowhere did the apex Court say that the sedition law stands scrapped or that it is irrelevant. Some parts of it may need a re-examination, is all that both the Modi government and the apex Court are saying, at this point.
“Whoever, by words, either spoken or written, or by signs, or by visible representation, or otherwise, brings or attempts to bring into hatred or contempt, or excites or attempts to excite disaffection towards, the government established by law in [India], shall be punished with imprisonment for life, to which fine may be added, or with imprisonment which may extend to three years, to which fine may be added, or with fine,” reads section 124-A (sedition) of the IPC. Unfortunately, the sedition law has been misused with rabid impunity by the Opposition ruled States. For instance, MP, Navneet Rana was charged with sedition, for simply wanting to recite the Hanuman Chalisa, outside Matoshree, the residence of Maharashtra’s CM, Uddhav Thackeray. How can recitation of religious texts, even if it is outside the CM’s residence, be an act of sedition? By that logic, one is tempted to ask Mr Thackeray, what about the thousands of Muslims, who offer Namaz every Friday, on roads and railway tracks and even in public toilets? If offering Namaz in a public space is not sedition, why should recitation of Hanuman Chalisa,be made into a cognizable offence? Public property including surrounding roads outside Matoshree are not private, but public spaces.
AIMIM chief Asaduddin Owaisi’s younger brother Akbaruddin Owaisi visited and offered prayers at the Mughal emperor Aurangzeb’s tomb on May 12, 2022. Younger Owaisi’s act of bowing before Aurangzeb to show respect is an act of betrayal and insult to Hindus. How can we forget history?
Despotic and rabid bigot, Auranganzeb, had harassed and schemed against the great warrior king Chhatrapati Shivaji Maharaj. He brutally tortured and killed Sambhaji Maharaj.
It is not surprising that Owaisi went to Aurangzeb’s tomb. The thinking of Nizam, Razakars (the paramilitary volunteer force deployed by the Nizam of Hyderabad to resist the princely State’s integration with India during 1947-48) and the earlier Islamic dynasties, is much the same. Aurangzeb, in his barbaric and bloodthirsty, 49-year rule, slaughtered to death 4.6 million Hindus and forcibly converted or took captive, an equal number, besides of course imposing the discriminatory and draconian, Jiziya tax on non-Muslims. If reciting Hanuman Chalisa qualifies as sedition, should younger Owaisi’s act not be seen as a deliberate act to provoke disaffection towards the Indian State, moreso when the Gyanvapi mosque videography issue is underway. The Rana couple were later granted bail after a Court observed that mere expression of derogatory or objectionable words was not sufficient ground to invoke the sedition charge. But the moot point is, those who accuse the BJP of scuttling free speech, are actually the very lot that has zero tolerance to any narrative that does not suit their Hinduphobic taste buds. The Congress and its allies would therefore do well to stop waxing eloquent about the virtues of free speech, because they don’t believe in it.
The BJP has always endeavored to strike a balance between Article 19, that is, freedom of speech and maintaining public order. While Article 19 (1) (a) guarantees freedom of speech and expression, equally, Article 19 (2), speaks of reasonable restrictions. In fact, every fundamental right is subject to reasonable restrictions pertaining to public order, morality, and health.
The Congress Party has time and again abused the sedition law for unfair advantage. In 2019, for instance, an innocent man was charged by the Bhupesh Baghel-led government for sedition for simply raising his voice against the infuriatingly repeated electricity power cuts in Chhattisgarh. More recently, the Congress Party, in Rajasthan, to stifle the voice of the media, invoked sedition charges against a news anchor, Mr. Aman Chopra and continued to hound him, despite a Court order to the contrary. Only last week, Marathi actress Ketaki Chitale was booked and arrested for a purportedly derogatory Facebook post against Sharad Pawar, by the MVA regime. BJP leader, Vinayak Ambekar was also beaten up by NCP goons, for an innocuous Facebook post. Also, how can one forget rabble-rouser Mamata Banerjee, whose corrupt TMC regime, arrested Jadavpur University professor, Ambikesh Mahapatra in 2012, for simply forwarding a harmless spoof on Mamata.
In a historic development, the Supreme Court on May 12, 2022, ordered that the 152-year-old sedition law under Section 124A of the Indian Penal Code should be effectively kept in abeyance till the Modi government reconsiders the provision. In an interim order, the Court urged the Centre and the State governments to refrain from registering any FIRs under the said provision, while it was under re-consideration.
In the final analysis, while by July 2022, things pertaining to the sedition law will be a lot clearer, what cannot be denied is the fact that for decades, the Congress Party which ruled India for the longest time, misused and abused this law to checkmate dissent and to clip the wings of political opponents. Sometimes, Congress went to ridiculous lengths to checkmate dissent, the arrest of cartoonist Aseem Trivedi in 2012, being one such example. Trivedi was later pardoned once the Modi government took charge in 2014. On May 15, 2022, at the “Chintan Shivir” of the Congress Party in Udaipur, Rahul Gandhi said, the only alternative to the conversation between people, is violence between people. The incompetent Congress scion further added that the Modi government is encouraging violence by muzzling democratic institutions. Well, maybe Rahul is suffering from selective amnesia and needs to be reminded that be it bringing in the draconian 66-A in 2008 to curb free speech, or the Maintenance of the Internal Security Act (MISA) or overturning the 1985 Shah Bano judgment of the Supreme Court, if there is one Party that repeatedly made a mockery of India’s electoral process and the judiciary, it was the Congress Party.
The Maintenance of Internal Security Act (MISA) was a controversial law passed by the Indian parliament in 1971, giving the administration of Rahul Gandhi’s grandmother, Indira Gandhi, very broad powers – indefinite preventive detention of individuals, search and seizure of property without warrants, and wiretapping – in the quelling of civil and political disorder in India, as well as countering foreign-inspired sabotage, terrorism, subterfuge, and threats to national security. Under the garb of quelling terrorism, however, the MISA was used with brazen impunity to hound free-thinking and curb the voice of free thinkers, by Indira. The law was amended several times during the subsequently declared national emergency (1975–1977) and used for quelling political dissent. Finally, it was repealed in 1977, when Indira Gandhi lost the 1977 Indian general election and the Janata Party came to power. To cut to the chase, therefore, it is preposterous to draw a false equivalence between Congress and the BJP. While the BJP has used the sedition law with great restraint and very sparingly in only the rarest cases, Congress used the sedition law as an instrument of vendetta politics.
Sedition law is very, very old but is it time to completely abandon it? The answer is, no. Don’t forget, the catch here is, to use it sparingly. Should it be used against those protesting constructively against government policies? No. Should it be used against those seeking to conspire against the government of the day, in such a way that it harms the country’s territorial integrity? Certainly yes. So known Maoist sympathiser, Binayak Sen, should certainly be behind bars for sedition and so should Sharjeel Imam, who sought to cut off “the chicken’s neck” from the rest of India. The lobby that says the BJP is as bad as the Congress, as both have misused the sedition law, are woefully wrong. The BJP and the Modi government have faced vitriolic opposition bordering on the defamatory and in many cases very perjurious too. Yet, PM Modi, as is typical of him, has always shown extraordinary grace and that is precisely the reason,no sedition charges were slapped against those protesting at Kundli, Singhu and Tikri borders, though their actions often bordered on the grossly unacceptable, given that often during these protests anti-India slogans were raised and Bhindrawale posters were flashed. Discretion is the better part of valour, they say. And the inclusive Modi government has showcased why a re-examination of the sedition law, is the need of the hour, without dismantling it, so that the law is made stronger and more in line with contemporary India’s democratic ethos. Martin Luther King Jr. famously said: “Our lives begin to end the day we become silent about the things that matter”. Indeed, PM Modi’s historic decision to seek a re-examination of the archaic sedition law qualifies as a transformative moment, in the quest for that fine balance between free speech and national security.
The writer is an Economist, National Spokesperson of the BJP, and the Bestselling Author of ‘The Modi Gambit’. Views expressed in the piece are the writer’s personal.
RENAMING OF STREETS AND PLACES CANNOT ALTER HISTORY
Earlier this week, certain right-wing activists demonstrated in the Mehrauli area of South Delhi demanding that the historic Qutab Minar should be renamed Vishnu Sthambh. Simultaneously another group of people wanted that the names of Shah Jahan Road and Tughlak Road in the Lutyens zone to be changed. Everyone is aware that Delhi is amongst the oldest capitals of the world and there is history buried under every brick and stone. Therefore, even if one was to change the names of every monument or street, one would not be able to erase historical facts. Successive governments have resorted to this futile exercise of renaming places, which other than adding to the confusion has served no other purpose. Being a Delhite from my birth till now, I can tell you that such initiatives undermine reality. How can anyone ever wish away the Mughals for instance who were on the throne of Delhi for several centuries? Red Fort, Jama Masjid and Hamayun’s Tomb are a part of their legacy and attract a large number of tourists every year. The Mughal Gardens at the Rashtrapati Bhawan recognise their stamp over the city and the special Delhi cuisine from Karim to Jawahar eateries is a part of what they have left behind.
The first war of Independence in 1857 resulted in the last Mughal Emperor, Bahadur Shah Zafar being arrested and externed to Burma. Similarly, Tughlaks played a major part in the evolution of the city. Tughlakabad Fort and Feroze Shah Kotla are monuments that cannot be wished away. In fact, one of the three Ashoka Pillars in the city is located at Ferozeshah Kotla and the famous Cricket ground in the capital where Sunil Gavaskar scored his 29th century to surpass Sir Don Bradman’s record was also a part of this stadium. As far as Qutab Minar goes, like so many other important landmarks, it is also a heritage monument. It honours the Slave dynasty and also reminds people of India’s first woman empress, Razia Sultana. Yes, some dispute that many of these structures were originally Hindu and thus should be recognised as such.
P.N.Oak was the first right-wing historian who spoke on these lines in the late 1960s. If his thesis was right, he should have been honoured by the central governments that have been there in the past 50 years. Congress made the biggest folly when it renamed Connaught Place as Rajiv Chowk. Although this name has gained acceptance, thanks to the Metro services which stop at this station, yet for Delhiites, Connaught Place would always be CP. St Mary’s road was over 60 years ago renamed as Rafi Marg. Most people who live in the city believe that this road was named after the legendary singer Mohammad Rafi when the fact is that it was in memory of Rafi Ahmed Kidwai, a nationalist and freedom fighter who was a part of Jawahar Lal Nehru’s Cabinet.
Delhi has also gone by several names in its hoary history. Hastinapur, Raisina, Indraprastha, Shahjahanabad, Tughlakabad are some of these names. There has been an attempt by governments to also erase the British imprint on the capital. How can this be possible unless, the entire University system, the railways, the English language etc gets changed also? I am not a supporter of colonial powers but India was a British-ruled colony is undeniable. When we celebrate Independence Day, it is to mark our freedom from the British, an acknowledgment of sorts. Let us spend more time strengthening our country and its economy rather than indulging in divisive politics.
Understanding misappropriation of assets at workplaces
Asset misappropriation is the most common type of occupational fraud. It occurs when an employee steals or misuses the organisation’s resources such as cash, fraudulent billing, inventory, or inflated expenditure reports.
One of the most significant delinquencies many businesses face today is the incidences of fraudulent acts commissioned by employees. The growing number of reported occurrences of fraud and its detrimental impact on corporate subsistence continue to draw the attention of auditors and fraud examiners around the world. According to the Association of Certified Fraud Examiners (A.C.F.E.) report to the nations on occupational fraud and abuse 2020, organizations lose roughly 5% of their revenue to fraud each year. This is the worldwide data available. One thing pertinent to note is that this is what is reported. What is not reported, obviously, has not been counted. While the fraud can be perpetrated both externally and internally, recent studies show that internally perpetrated fraud by employees, management, and sometimes owners (occupational fraud) has been more prevalent in recent years than the former. The majority of these researches have primarily focused on financial statement fraud, with little attention paid to other types of occupational frauds. An employee commits occupational fraud during the course of their occupation. Sometimes, it is further referred to as employee fraud. According to A.C.F.E., there are three categories in which an employee may commit fraud on an employer or organization viz, Asset misappropriation, Corruption, and Financial Statement fraud. Briefly speaking, when an employee swindles with cash or other assets belonging to the organization for personal use without authorization, it is called Asset misappropriation. Corruption is wrongful acts by employees designed to cause unfair advantage to the perpetrator, including bribery, kickbacks, economic extortion, collusion, etc. Corruption is a vast term and includes the wrongful use of influence by a person to benefit the actor or any other person. On the other hand, financial statement frauds are usually perpetrated by management against potential users of financial statements. Hence, it is an intentional act whereby the perpetrators usually get little or no financial gain; instead, they are committed to showing the better standing of the company on paper.
Despite the importance of financial statement fraud in the fraud discussion, empirical studies have shown that the frequency with which employees engage in other types of fraud, particularly asset misappropriation, dramatically outnumbers the former. Asset misappropriation accounted for 86 percent of all reported fraud instances during 2020, according to A.C.F.E. Surprisingly, even after the incidences of asset misappropriation continue to rise, most studies have been concentrated only on financial statement fraud.
Why do employees commit fraud against the organization which provides the bread and butter? What induces them to do such an act? Ultimately, the loss of the organization is the loss of an employee. Few theories have been developed over time to understand why people commit fraud, especially occupational fraud. However, these theories have also undergone many developments, e.g., the fraud triangle with three elements to the S.C.O.R.E. model with five elements. Different sociologists have asserted different rudiments in their studies. However, according to these different models, Pressure, Rationalization, capability, opportunity, and ego are prime elements that motivate individuals to commit any fraudulent behavior. However, all these elements may not hold equal weightage in their relevance behind a fraud. In almost all the studies, the opportunity has been perceived as the most crucial factor behind the fraudulent behavior, which triggers the lack of internal controls within the organization.
As mentioned earlier, asset misappropriation is the most common type of occupational fraud. It occurs when an employee steals or misuses the organization’s resources such as cash, fraudulent billing, inventory, or inflated expenditure reports. In almost all such cases, the perpetrator uses techniques of deception or trickery to steal or misappropriate the organization’s assets. According to Dr. Steve Albrecht, “Asset theft, concealment, and conversion must all be present for asset misappropriation.” Asset misappropriation is the most common type of fraud because it is usually the easiest to commit, albeit it does not always result in significant direct losses.
On the other hand, it deprives businesses of resources that could have been used to improve their productivity and profitability. The A.C.F.E. further divides asset misappropriation schemes into cash misappropriation and misappropriation involving inventory and other assets. Aside from its domination, asset misappropriation is a significant phenomenon in the accounting discipline, particularly in auditing. International Standards on Auditing (I.S.A.) 240 inflates the auditor’s responsibilities for fraud detection to encompass asset misappropriation. Hence, asset misappropriation is an issue that deserves the immediate attention of major stakeholders, i.e., management, auditors, and shareholders.
SOME ELEMENTS OF OCCUPATIONAL FRAUDS ARE:
Pressure or stimulus is a non-shareable problem that motivates a person to engage in acts that would help alleviate such pressures. When individuals face financial and non-financial pressures, they may feel compelled to engage in fraudulent activity (Cressey, 1953).
Another significant aspect that motivates persons to commit fraud is the availability of opportunities to engage in fraudulent conduct. Fraudulent activities in the workplace are frequently the outcome of a lack of internal controls within the organization. Hence, the stronger the entity’s internal control system, the fewer individuals participating in fraudulent or other illegal activities. If firms fail to seal possibilities for fraud due to overtime, certain employees may see this as a sign of corporate culture and eventually take advantage of these opportunities.
Fraudsters frequently have an outlook that leads them to fabricate justifications to justify their acts. In the fraud literature, this mentality or attitude is known as Rationalization and is one of the tenets of the fraud models. Rationalization is defined as a person’s mentality that allows them to excuse immoral behavior as not being criminal. As a result, Rationalization allows fraud perpetrators to justify their acts to protect their belief and self-image as honest, innocent people who were unfortunate enough to be caught up in a critical circumstance rather than criminals.
Wolfe and Hermanson (2004) brought the notion of capability into the fraud theory, defining it as persons’ characteristics and abilities that significantly impact whether or not fraud occurs. For a fraudulent act to occur, an individual’s capacity to detect an opportunity to take advantage of it is critical. As a result, a fraud perpetrator should be in a position inside the organization that allows them to commit the fraudulent act or have the skills and abilities to execute it.
The ego determines what is moral and what is not. Because of their ego, people are concerned about what others think of their behavior. People work hard to establish a reputation, and they do everything they can to retain it. Some people engage in various actions, including deception, to maintain their egos. Vousinas (2019) demonstrates that some people enjoy the feeling of outsmarting the world when their initial crimes are successful and unnoticed, boosting their ego. As long as they are not caught, such individuals are encouraged to engage in such fraudulent actions repeatedly. Individual ego might thus determine whether or not a person will commit fraudulent acts such as wealth misappropriation.
The fraud model (S.C.O.R.E.) describes the effect of Pressure, Rationalization, capability, opportunity, and ego on asset misappropriation while controlling for the impact of ethical values on asset misappropriation from a theoretical perspective. Additionally, the effect of these elements on an individual’s propensity to misappropriate assets is highly dependent on how individuals perceive an organization’s internal control systems.
PRESSURE AND ASSET MISAPPROPRIATION
As a general tendency, when people are faced with financial or non-financial difficulties that they do not want to share, they misappropriate assets. Because these forms of Pressure are non-transferable, such people will go to any length to get rid of them, including committing fraud. Individuals may have high work expectations and targets, putting them under a lot of stress. Organizations may also encounter pressures that are passed on to personnel. Apart from this, conditions outside the workplace, e.g., at home or family, may cause some stress. Individuals who have family and friends who rely on them financially may feel under Pressure to meet their requirements. Some individuals may exploit the organization’s assets as a means of lessening or controlling such demands. According to Steve Albrecht, people typically participate in fraudulent activities when they are under duress. Every fraud perpetrator must have been under Pressure to perpetrate fraud. Pressure has been discovered to be a significant influencing factor in the occurrence of fraudulent behaviors. According to various fraud models, pressure is a factor that causes persons to engage in fraud. According to these studies, individuals misappropriate assets at work when under strain, whether personal or work-related, financial or non-financial, to alleviate such stresses. Hence Pressure has a substantial impact on asset misappropriation.
RATIONALIZATION AND ASSET MISAPPROPRIATION
Most people who engage in asset misappropriation excuse their actions by believing that such activities are necessary or do not damage others. Misappropriating assets at work is simple for certain people because they fabricate explanations to justify their acts and maintain the belief that they have done nothing wrong and are still trustworthy. Often, an organization’s internal culture is a fertile environment for some employees’ rationalizations for committing fraud. People defend their fraudulent behavior at work, for example, by claiming that “bribery is a prevalent culture here” and “everyone does it, so why not me?”
Several empirical research has concluded that rationalization has a significant impact on the prevalence of fraud and that people who cannot justify their wrongdoings are less likely to commit fraud. With first-time fraud offenders, rationalization is even more prominent. According to Donald Cressey (1953), most of those who engaged in some deceptive behavior for the first time justified their actions. As a result, the ability to rationalize wrong actions may be a key predictor of why some employees misappropriate funds at work. Hence Rationalization has a significant and positive effect on asset misappropriation.
CAPABILITY AND ASSET MISAPPROPRIATION
When the perpetrator is in a position where they have access to the firm’s resources, it is generally easier to commit fraudulent crimes like asset theft. Individuals must also possess specific personal characteristics and abilities that allow them to misappropriate assets at work without being discovered. As a result, simply recognizing the existence of an opportunity is insufficient to commit the fraud unless the individual is well-positioned to take advantage of it. As a result, a fraud perpetrator must possess the skills and abilities to conduct the deception. Individuals misappropriate assets when they can comprehend and exploit internal control mechanisms so that they are not found. If they are caught, they are sure that they will be able to handle any stress that follows. Existing fraud research has discovered a positive link between fraud and capability.
PERCEIVED STRENGTH OF INTERNAL CONTROL SYSTEMS
The strength of a company’s internal control systems can either create opportunities for fraud in the organization or close loopholes that could lead to fraud. Robust internal control systems are frequently capable of identifying wrongdoing, whereas poor internal control systems are not. As a result, how personnel within an organization view the internal control systems in their organizations is critical. This is because a person’s perception of internal control can lead to them engaging in fraudulent behavior. Individuals may, for example, misappropriate assets at work if they believe the workplace’s internal control systems are poor and so will not be noticed.
On the other hand, internal controls act as a deterrent to fraud when they are strong. Individuals do not have the opportunity to misappropriate money since they know that internal procedures will expose them. Hence, strong Internal Controls have a negative relationship with asset misappropriation.
EGO AND ASSET MISAPPROPRIATION
Because of their ego, an average person places some importance on what other people think of them. Individuals frequently wish to establish and maintain social standing. People may engage in particular actions solely to preserve their ego because they value and do not want to lose their status, especially if it is one of power. According to the findings of some existing studies, fraudsters are frequently egoistic, and ego appears to be a recurrent theme in some of the most recent striking frauds. People who have a strong attachment to their social standing are more prone to engage in wrongdoing such as misappropriation of their organization’s funds. This is because such persons may be willing to participate in potentially fraudulent conduct to maintain their social lifestyle. The ego and asset misappropriation have a favorable association.
Various industries and professional organizations have adopted codes of conduct that apply to all companies. As a result, most businesses adopt these codes of ethics to create ethical standards that will guide how their employees behave in the workplace. Some people’s activities are also influenced by their ethical lookout. What is right or wrong, good or bad, depends entirely on one’s moral perspective. According to the findings, people commit fraud because they lack ethical beliefs or do not follow the ethical rules in their jobs. Individuals with strong ethical convictions, on the other hand, rarely perpetrate fraud. Moral principles significantly influence asset misappropriation.
PERCEIVED STRENGTH OF INTERNAL CONTROLS SYSTEMS
Internal controls make or break a company’s ability to commit fraud. When internal controls are tight, all gaps that could allow fraudulent workplace actions are closed, lowering the rate of fraud in the workplace. People can take advantage of the opportunity presented by the loose systems to engage in fraudulent activities when internal controls are insufficient.
A thief also avoids breaking into a house that has a watchdog. Internal controls can also be perceived the same in an organization. Individuals would not misappropriate assets at work if adequate internal controls were in place. Individuals in senior positions in companies, on the other hand, may not be bothered by internal control measures because they can usually circumvent them to hide their transgressions. Understanding the push factors, i.e., Pressure, rationalization, capability, and ego, is crucial for management and policymakers in developing solutions targeted at eliminating workplace fraud. Having proper and robust internal control systems in place is one of the most effective approaches to reducing the occurrence of asset misappropriation.
The writer is a finance and forensic accounting professional and is currently associated with the education industry in the capacity of a finance officer. The views expressed are personal.
Civil Services’ recruitment process, training need reform
Civil Services’ recruitment process, training need reform
Another Civil Services day has passed. Varied people gather to give speeches on this day, and request the Civil Servants to take the country forward, that was a euphemism for not obstructing it.
A former President, the present Prime Minister, and hordes of people from the technical field, creative people in pursuit of India’s development, reformers, teachers, and businessmen are always very anxious about the quality of people inducted into services to implement the policies of the government. People who had had a rendezvous with Civil Servants have been very critical of them and indicted them also to have been responsible for holding the progress of the country.
Civil Services in India suffer from a far deeper malaise than normal citizens know and feel. The common citizenry has got so accustomed to the daily grind and its problems that an abysmal quality of life imposed on them seems normal, and they’re completely oblivious of the people who are responsible for it.
The issues that the Civil Servants face in India are related to everything one can imagine— from the quality of intake to their training, their working inefficiency, their commitment towards the country and its people, and most importantly the way their non-accountability for everything they do derail the progress of the country.
The different questions that are asked include: Do the Civil servants act as Civil servants or Masters? Do they really care for the services or people? Do they still have colonial-type thinking? Don’t they enjoy without accountability at the expense of taxpayers’ money? Does the present system of selection for the Civil Services Examination (CSE) conducted by UPSC do justice to fulfilling the objective of choosing candidates with some ethical standards? Does it recruit the best talent or better still best attitudinal traits? Is a 3-hour examination on Ethics, Integrity, and Aptitude and Interview adequate to test the character of candidates? Is it really needed to have different services? Why can’t a common pool of candidates be selected and then allocated services based on their aptitude, interest, and performance? Do the Civil Services aspirants know how narratives can harm the country and do they have their observations sharp enough to identify it? What are sleeper cells and their roles in perception management? What are the differences and cross-cultural comparisons emanating out of the use of words considered to be synonymous like Dharma and religion, spirituality and religion, temple and mandir, pooja and worship?
The Indian Civil Servant is a fatal mix of contradictions having some very favourable as well as the obnoxious mix of characteristics to run or “down run” the country and these characteristics are both acquired and inherited.
No institution has harmed the country more than the British legacy of Civil Services. When the ancient Chinese decided to live in peace, they made the Great Wall of China. They thought no one could climb it due to its height.
During the first 100 years of its existence, the Chinese were invaded thrice, and every time, the hordes of enemy infantry did not need to penetrate or climb over the wall, because each time they bribed the guards and came through the doors.
The Chinese built the wall but forgot the character-building of the wall guards.
This is what the Civil Services in India are. They are the wall built to protect, but, they allow to demolish every wall, that may be created, and they can be fatally apathetic to the feeling of India and a true epitome of what the British wanted to do and what they left behind, a true reflection of colonial powers’ intention to bring about a thorough mismatch between India and its structures.
A statesman rightly pointed out, “India has the most lethal missile, indestructible but capable of destructing everything efficient but capable of delaying any progress, it is called the Civil Servant—it doesn’t work and can’t be fired.”
THE PRESENT BUREAUCRACY
It is indeed an irony that the country has progressed and has grown up, looked up, brightened up and still moving forward. Even though we may not have tasted development, but at least we tasted growth, and all this despite the bureaucracy. The Indian economy has grown despite the bureaucracy. The bureaucracy has not managed the aviation sector despite the enormous inertia being available by way of Air India… so what? Air India may have been ruined, but the aviation sector developed without bureaucracy. The bureaucracy has almost completely devastated the Shipping Industry… so what? Indian exports have picked up. HEC Ranchi, and other public sector units have fallen from grace… so what? A lot of state-of-the-art industrial centres have come up that mock HEC. Every road-block the bureaucracy can put up, despite that the road transport has shown growth— qualitative as well as quantitative. The Indian software industry has exploded, despite the bureaucracy, and the quality of ‘education’ (read information and literacy) has improved at least quantitatively if not value-wise, despite the bureaucracy. The Milk Revolution, the Amulya experiment headed by V. Kurien, the Telecom revolution orchestrated by Sam Pitroda, Satellite and Space Technology growth directed by ISRO, the UID and Aadhar conceptualised and implemented by Nandan Nilekani, The Konkan coastal Railway, the Metro by E. Sridharan all grew up only because there was no bureaucratic involvement. Many sectors have shown an improvement despite obstacles put by bureaucracy. Had the bureaucracy only worked, not obstructed the work, the Country would have been a much better place to live in.
It is left to anyone’s imagination what would have happened with a responsive, efficient bureaucracy having a feeling for the country and its people, and what would have been done. The country’s economy would have shown progress unparalleled in the whole of Asia, and we would have been a power to reckon with.
Ceteris paribus, one of the reasons is the selection process. The chosen candidates are billed as the best talents we have, but is it the talent that has to be enough for bureaucracy or attitude?
HOW ARE THE CIVIL SERVANTS RECRUITED?
The already selected candidates selected out of the present procedure need not be made to think that they are the most talented candidates, because they do not supplement it with their ability and attitude to administering. Is it not that talent without an aptitude, attitude, and without any value cannot take the country forward?
The Civil Servants need to be learners not judgmental, but must have a sense of judgment based on their capability of logical and emotional differentiation.
The anomaly between what is required and what is tested. So we have grown despite bureaucracy. There are reasons to believe that. There are two aspects to consider here, despite the prevalence of terrific talent, why do we lag in taking the best administrators in bureaucracy and second, after selection, why do even the best become unfit for the country, unresponsive to the people and obstructive. To a large extent, the selection process has to be blamed. There are grave anomalies between traits required and the selection procedure prevalent.
A trait that is required for selection into bureaucracy is an attitude for administration but what is tested is examination technique, a trait that is needed for selection into bureaucracy is administration ability, and what is tested is information base; if the requirement is empathy for the people, the chosen candidates are trained to be arrogant, if the requirement is honesty, there are minimal ways of evaluating their ethical dimension, where the trait required is objectivity, the selection has no means to prevent students who have taken all their decisions based on perception and rumors, when the selected people require to have an understanding for their country and who know their country and feel for the people, the candidates who come out of academy are a replica of their colonial masters and which during their training got even more strengthened in the Academy.
Why does this happen? The selection and the training procedure are still very colonial.
The Bureaucracy is protected by Articles 311 and 312, meaning that even for their deadliest mistakes, deliberate mistakes they will not be punished and they are not accountable. In a situation where the country is, where PM is accountable the MPs are accountable, the teacher is accountable, the technocrat is accountable, and the creative people are accountable why the Civil Services, in particular, the IAS cannot be accountable? Once recruited, they do take the country and its people for granted.
Moreover, how does the same examination test the candidates for different services, which require different aptitudes and attitudes for different services like IAS, IFS, IPS, IRS, and that too through one single examination? Even this exam doesn’t test the candidates for their personality and their administrative ability but rather their memory and examination presentation techniques.
We take talent, but forget whether that exceptional talent has character and values or not. We forget the basic dictum, “Values and Morality can compensate for an intellectual and talent shortage, but talent and intelligence can never make up for lack of values and morality”
WHAT CAN BESUGGESTED?
It is in this light that the government’s decision to accord merit list, services and cadre after their training in Foundation Course that holds some meaning and credence. It is a prudent idea provided the training at Foundation Course gets modified and is reformed to an extent as not to allow the training candidates to have a ‘paid holiday’ and does not become subjective.
There are three stages of reform that are needed to prevent UPSC from being called as “Unpredictable Public Service Commission”.
Everything is ok at the prelims stage except for the fact that it has been so unpredictable that no one is sure that even a single mistake can cost their attempt to help the poor souls to restart an arduous journey of insipid preparation for one more year. The quality of intake also leaves a lot to be desired and becomes a gamble of sorts to prevent even the best of administrative talents to sit out. A good idea then will be the reintroduction of options to make three tests, instead of two, one for optional and two papers of CSAT. Optional will help some really good students who lack in test techniques, but with observational analytical skills to find their way. The significance of knowledge will be reinforced, and whichever way the student has academically lived till his graduation. Of course, the chance factor will be minimized and UPSC’s job also made easy. This suits easy identification of talent as well. As of now, the prelims exam has become more of a gamble because the margin of error, in this case, is so low. So much so that even within a range of 1 mark more than 10000 students can be weeded out, So it has become more a test of exam practice, a test of elimination rather than any effective aptitude test. It serves no purpose other than to eliminate some of the brightest students as well.
At the Mains level, there have been a good number of innovations in the type of questions asked that are good and relevant, but what the students are doing is they are packing their facts in a sack and depositing it to get marks. The test of language, flow, coherence of thoughts, analysis and its ability to go deep are not tested. This should precisely not be the hallmark of a candidate’s ability, indeed what is tested very well is the student’s ability to pack facts in their answers like jute sacks. The structure of the question paper needs to be changed to include not only 150-word answers but also one 600-word, two 400 words, three 300 words, and many 150 and 100 and 50 words as well. This will test many aspects of candidates and expose their ability as well. The examiners also have to be instructed and trained to check the language, analysis, coherence, and arrangement that is a part of the answer and not only the facts arranged in disarranged manner. The answer has to be checked in a manner that the students can’t be doctored in a coaching institute and masquerade themselves as knowledgeable students.
At the Interview level, major reform is required. The Interview at present by one single board doesn’t do justice to the selection procedure. A half an hour is not enough to test the personality of the candidate. There are two options— the best option is making it in the form of CDS and NDA. Here a candidate is kept for five days and observed intricately. Isn’t it ironical that the selection procedure for the CDS and NDA is more stringent than the people whose dictates they need to follow and whose decision imposition lacks coherence, rationality, and ethics? The other is making the personality test two stages conducted by two different boards with a greater allocation of marks with as much weightage as Mains marks. This will be a far better method to check the administrative abilities and associated attitude.
Finally, in the training stage for foundation, the training procedure must be completely revamped, extended, and restructured. A three-month training may not be sufficient to assign services to candidates and understand either their administrative abilities, policing capabilities, diplomatic understandings and underpinnings, negotiation abilities or accounting abilities. Service allocation has some objectivity imparted when the candidates are closely scrutinized for more than 3 months to allocate different services based on their attitude, interest, and desirability.
The best suggestion perhaps will be to recruit the potential Civil Servants at the grass-root level after +2, keep them in-field training for three years, and give them a degree in Administration in the same manner as Graduation. This way the chosen candidates can be trained and guided in a manner that the country requires them to be. They will be less arrogant, more flexible, and more empathetic, and since they would have gone through the lowest hierarchy to the one hierarchy where they are recruited now, they will understand the problems better.
Also, they can be made to understand the country better and they will be a far better candidate to learn. They will also be far more flexible and far more responsive with all the traits required in bureaucracy that can be easily poured into them.
Any argument against this has to take into account whether the 35 years of service to the country is more important than the three years of difficulty in making them. Whatever the difficulties in revamping, the whole selection procedure is more worthy.
The writer is a strategic thinker, educationist, earth scientist, author, mentor, and advisor to various governments. Views expressed are the writer’s personal.
Opinion2 years ago
South Block’s mistakes will now be corrected by Army
Sports2 years ago
When a bodybuilder breaks Shoaib’s record
News2 years ago
PM Modi must take governance back from babus
Spiritually Speaking2 years ago
Spiritual beings having a human experience
News2 years ago
Chinese general ordered attack on Indian troops: US intel report
Legally Speaking2 years ago
Law relating to grant, rejection and cancellation of bail
Sports2 years ago
West Indies avoid follow-on, England increase lead to 219
Royally Speaking2 years ago
The young royal dedicated to the heritage of Jaipur