Series of scams could hurt Modi’s election prospects
India is seized with another banking scam. At the centre is Punjab National Bank (PNB), a nationalised bank. The culprit is diamond jeweller (or, as he prefers, “diamantaire”) Nirav Modi. The amount involved is Rs114 billion (approx $1.8 billion). PNB has localised the blame to a two low-level officials, who allowed diamantaire Modi over several years to freely use the restricted SWIFT code, meant for international inter-bank transactions. Despite red flags over foreign exchange violations since 2015, the PNB hierarchy did nothing. What emerges now is that unlike private sector banks in India, most public sector banks have avoided the hassle of adopting modern banking software technology to install checks and balances against fraud and deception. Ironically, PNB has been awarded by the vigilance authorities in the banking system even while this scam festered.
The deception began in 2011, but snowballed with momentum in 2015. While Prime Minister Narendra Modi likes to say the scam began during his predecessor Manmohan Singh’s time, the fact of the matter is that Nirav Modi has never been photographed with Manmohan Singh, either in a group or singly, as happened at the World Economic Summit in Davos, Switzerland, recently. This has given rise to many social media memes, including one parodying the Bollywood farce Bade Miyan, Chhote Miyan as Bade
Modi, Chhote Modi (Senior Modi, Junior Modi). The government is so rattled that the information and broadcasting minister had to publicly warn anyone using the hashtag #ChhotaModi would be liable for defamation (the threat remains unfulfilled, as the government possibly realises it would be counterproductive). Another popular meme refers to current economic crimes as “modis operandi”.
With diamantaire Modi having escaped India with his family — he apparently pulled his kids out of school, mid-session, something any Indian would religiously avoid — the suspicion is that the government tipped him off to the impending raids. With another Modi having absconded earlier, cricket businessman Lalit Modi, who then proceeded to maintain contact with External Affairs Minister Sushma Swaraj and Rajasthan Chief Minister Vasundhara Raje Scindia, and with the flight of BJP-supported Rajya Sabha parliamentarian and beer-king Vijay Mallya, memes openly call this government as crony-capitalist as its predecessor. This week, Vipul Ambani, a cousin of Mukesh and Anil, was arrested in Nirav’s case — only furthering the impression that PM Modi’s suit-boot ki sarkar, as Congress President Rahul Gandhi put it back in 2014, governs in favour of a few Indians, who also happen to be from his home state Gujarat.
Adding to PM Modi’s woes is an investigation into how diamantaire Modi laundered Rs 900 million of his “important” clients’ cash on November 8, 2016, hours before PM Modi announced the demonetisation of high-value currency. The former Reserve Bank of India (RBI) Governor, Raghuram Rajan, who advised against demonetisation and was for his troubles not offered the usual extension of term, had red-flagged the banking scam back in 2015, and had asked the PM’s office to investigate it. This is on the record.
PM Modi, who despite being in power now for almost four years tends to blame everything on India’s first prime minister Jawaharlal Nehru, has blamed the banking scam on his predecessor (who, had he been as abrasive, would have blamed the telecom scam on his predecessor AB Vajpayee, etc). It is much like US President Donald Trump blaming his predecessor Barack Obama for the Russian hacking and manipulation of the US 2016 elections. Let us accept that to be true; shouldn’t Trump, in the 400 days he’s been in power, pursued the Russians with a vengeance? Instead he spends his time on Twitter whining about the Special Prosecutor’s investigation into this very matter. It is ironic how the very men who come to power proclaiming to be tough and strong, etc, engage in whinging and finger-pointing instead of taking tough action.
This scam comes at a time when clearly the mood of the nation has changed. Yes, PM Modi still has tremendous support among the megapolis middle-class, but it is eroding rapidly. Soon only finance, high-tech and NRIs will remain as his support. India’s newspapers are reporting the scam with gusto, though some are the very newspapers who refused to publish the same scam when approached by whistle-blower Hari Kumar in 2016. Some of it appears motivated by people within PM Modi’s own cabinet, who smell an opening.
In the next parliamentary elections, the BJP expects to suffer losses due to the ongoing rural distress. The thinking is, if the BJP gets around 200 seats (needing a majority of 272), the allies will dump PM Modi because of his cavalier treatment and look for a more amiable candidate.
This means two things. A frequent eruption of scams till the elections is likely. For instance, in Mumbai there is talk about the corruption of a young and “powerful” minister who is regarded as a “fast-track” governance wunderkind. Two, expect the next elections to be held this November (clubbed with four state assembly elections), as PM Modi attempts damage control. Truly, as the saying goes, the worm has turned.