Politics & chit fund kitties

The battle lines have been drawn. This is evident in the joint parliamentary committee (JPC) examining the 2G spectrum allocation scam. There’s a demand to remove JPC chairman P.C. Chacko who had allegedly leaked the panel’s draft report to the media.

Simultaneously, another fresh controversy erupted in the Coalgate scam as the CBI filed its affidavit in the apex court. The Supreme Court has rightly slammed the CBI on sharing its report with law minister Ashwani Kumar and senior officials of the PMO. The Opposition demanded the resignation of Mr Kumar, but was duly rejected by the UPA. While there will be usual debates and a great deal of smoke and thunder, we will have to wait for the facts to emerge. The apex court’s view on the matter will initiate a flow of decisions.

We have had coalition governments for well over three decades and, perhaps, over the next two general elections, we may have a different trend unfolding as power-sharing deals are inherent in a coalition and are difficult to control. It makes little difference whether party A or party B is in power. This, however, is only the case at the Centre. Regional voters favour majority rule.

We have witnessed this trend in Uttar Pradesh. In 2007, the Bahujan Samaj Party won the Assembly elections, but in April 2012, the Samajwadi Party won in a similar manner. In Tamil Nadu, the All-India Anna Dravida Munnetra Kazhagam decimated the Dravida Munnetra Kazhagam in 2011. In West Bengal, the Trinamul Congress defeated the Left. The Congress won in Himachal Pradesh, the BJP won in Goa and retained power in Gujarat, and the Akali Dal again won decisively in Punjab. In the recent Assembly elections in Nagaland, Tripura and Meghalaya voters opted for singleparty rule and now Karnataka will go to the Congress. Wherever there is a credible Opposition, it will be voted into power as antiincumbency is very strong. I think it would be a serious error if the Congress took victory for granted in Rajasthan and Delhi, and the BJP took the voters of Chhattisgarh and Madhya Pradesh for granted.

My estimate for next year’s general election is that the Congress will get 130-140 seats and the BJP 130-135 seats. I see the regional parties getting 270 seats with three serious contenders for the top job — Mulayam Singh Yadav, J. Jayalalithaa and Nitish Kumar — though there may be a 100 odd MPs who may not like any of the three and insist on giving outside support.

Parties won’t be looking for a supreme leader but for an acceptable leader. Another messy coalition at the Centre will start the move for majority votes for a national party and I think this will take place in the next two elections with the trend moving towards consolidation at the Centre.

West Bengal chief minister Mamata Banerjee is making a serious mistake in playing the blame game in the chit fund fraud. Rather, she should order a CBI inquiry as Saradha Group is not the only defaulter. One can expect a string of disasters as investors will try to withdraw their money and the agents, who have received 15-30 per cent commission, will be look- ing to save themselves from angry investors.

No one can stop the flood of panic as the very nature of the Ponzi scheme is based on continuous fraud. The moment the money stops, collapse is inevitable. This can lead to a serious law and order problem.

Chit funds may be concentrated in Bengal (there are 73) and the Northeast, but they exist in every state and this is nothing but a Ponzi scheme. There are others camouflaged as multi-layer marketing schemes that have swindled thousands of crores of rupees.

The government, of course, is to blame. But the agents, who get a huge commission, are equally guilty and will face the wrath of the very poor. There are a huge number of agents. This was evident when around 300-odd chitfund agents staged a demonstration near the chief minister’s residence in Harish Chatterjee Street demanding the arrest of the CMD Sudipta Sen.

It is no surprise that most of those under investigation are going to the courts. But it’s only a matter of time before the Supreme Court intervenes.

Ms Banerjee should not be defensive about the fact that she knew Sudipta Sen. But if she acts firmly against the fraudsters then the benefit of doubt should be given to her. To stop further damage, the RBI, Sebi, the Centre and the state governments should start a strong media campaign on the dangers of investing in chit funds.

Positive action by Ms Banerjee is far more important and recent allegations against her nephew, Abhishek Banerjee, should be quickly clarified. Bihar took the lead and raided 14 chit funds. Other states would be wise to follow this drill before it destroys many innocent investors. Profit and loss is a part of business but a chit fund is little more than a swindle.

The media will dig up all the details. Blaming others is no longer an option. In any case this is not what a leader should be doing at any level. No one is invincible in the court of the public. The panchayat elections are due in Bengal. Will these take place as scheduled in the month of May or will Ms Banerjee avoid these elections?

Events in Bengal can take a violent turn and the Centre has to keep a very close watch on the situation. We are looking at a serious law and order issue as every village in Bengal will be involved in the chit fund menace.

Thousands of agents are running for cover and some have committed suicide. The agents will face pressure as they are the ones who took the money from the poor. Violence can erupt at any time and without warning. Does Ms Banerjee have it in her to keep her fiery temper in check and stop the violence from spiralling? Sudipta Sen is lucky that he is in jail. The writer is a former

Union minister