 Hello and welcome to NewsClick. I am Paranjoy Ghooratakurtha and with me here in the studio, I have Dr. E.A.S. Sarma. Dr. Sarma is a former civil servant. He retired. He took early retirement from the Indian administrative service in November 2000. The last position he held was Secretary of Economic Affairs in the Ministry of Finance. He is an activist. He is involved with people's movements, trying to help the underprivileged, the poor, as a litigant, as an activist. Dr. Sarma, thank you very much for giving us your time. I want to discuss with you issues relating to crony capitalism in contemporary India. But before I ask you a few questions on that topic, I want to first ask you a personal question. Why did you leave the Indian administrative service and what made you the social activist that you are? Paranjoy, when I quit the Indian administrative service in November 2000, perhaps the best reason I could give you is that I felt fatigued, mentally fatigued. Because I find that in government, when you point out the legal position and say something cannot be done, very often you are overruled. And then you always felt that should you really continue in government, you keep on doing this. And the second thing was crony capitalism. I find government after government, I have nothing to do with political parties. Successive governments, I find that they get elected by the people in the name of democracy. But once they get elected, I find them going totally hand in glove with some of these corporate houses. And perhaps the reason for that is that the corporate houses, many corporate houses in India, they fund elections. So it's some kind of an excess which seems to exist. And very often the business interests which actually drive the government, they supersede. Would I be correct in presuming that one of the reasons why you left what many would consider to be one of the best positions, Secretary of Economic Affairs in the Ministry of Finance, one year ahead of your retirement, because you antagonized some very influential people and some very rich people. Would I be correct in presuming that there was a lot of pressure on you? There was. In fact, I resigned from the, I took voluntary retirement from the government when I saw my posting on the TV. You know, they tried to shift me from Economic Affairs to coal. And obviously there was, there were some, you know, interests within the government. And I had some basic differences with the Prime Minister's office at the time. And this was the Prime Minister, this was Dr. Manmohan Singh at that point? No, it was Mr. Bajpayee at the time. Sorry, I stand corrected. I am nothing against Mr. Bajpayee. He was a very good listener. He was a very dignified person. But the Prime Minister's office, trying to interfere in many policy issues is the odd thought. After all, the Prime Minister is a senior colleague in the cabinet and there is a principle of collective responsibility. But tell me, would you like to name some names? Who were these in the Prime Minister's office? I would not. And who were these big business houses who you antagonized? No, I would not like to do it for one reason. If I mention one business house, it should not mean that other businesses or houses are not guilty. And if I mention one office's name, other offices should not feel that they are let off. So actually as a system, as an institution today, Prime Minister's office has to interfere. Whereas, you know, in a cabinet everybody is equal and there is a principle of collective responsibility. One of the reasons they said that the UPA government lost power in 2014 was because of crony capitalism. There was one scandal after another scandal, big ticket scandals, 2G spectrum scam, coal gate scam, commonwealth game scam. How have things changed? I mean, Prime Minister Narendra Modi talked about na khaunga na khanedunga. But I mean, do you see crony capitalism continuing? Is it the same or has there been a change? Because this present government claims that instances of big ticket corruption are not taking place. You know, actually I have seen governments one after the other. I saw the Bajpayee government at that time, succeeded by UPA-1 and UPA-2 and the present NDA government. I don't find much of difference. Crony capitalism continues, unabated. Exactly the same modalities, exactly the same business houses, exactly the same problems, lack of transparency, lack of competition and wherever there is competition you choke it. So, there is not much of difference actually. Would you like to cite instances why you believe the present government is no different from earlier governments as far as cronyism is concerned? I'll give an example. You know, you take the case of elections, which is the mother of all corruption. Now, electoral funding, I think in my view, it is the beginning of corruption in India. Now, if you see the political parties, all the major political parties in India, they get contributions from business houses. Now, I try to analyze this. And there are domestic corporate houses and foreign companies funding elections. And in most cases, there is iron ore mining and iron ore export. You find under invoicing of iron ore. Why only iron ore? Any mineral for that matter. In fact, my analysis shows that most minerals in India are sold outside the country for prices which range from one-sixth to one-tenth, such is the large difference of the market price. What should be the market price? Of the market price, global market price. You take bauxite, alumina, aluminum. You take iron. You take any other granite, for example. You take beets and minerals, any one of these things. Now, here this money gets deposited in foreign accounts, which are probably reported in Panama papers and paradise papers. And some of these companies, they bring back this money and they give it to political parties as donations, sometimes transparently as through electoral trusts, sometimes directly. And the government has changed with retrospective effect. The foreign contribution really changed. Two things happened. You know, when the India government said that they will ramp up the electoral system and remove corruption, I was hopeful. But what really happened was, surprisingly, you know, in the Companies Act, company donations to political parties are allowed. But there is a ceiling of seven and a half percent. That was done away with? That was done away with. You know, in 1960s, I think it was one of the opposition MPs at the time questioned a 40 lakh donation to a cement association, 40 lakh donation given by cement association to Congress party. And he wanted to introduce a private members bill saying that you should ban all company donations. Then the government at the time, Congress government responded positively and said, no, we will ban it and they banned it. But subsequently, this election spending has become so profligate. Now, you see two other examples. One is the retrospective. No, I'm coming to that. All right. So what happened was, subsequently, what they did was they amended the Companies Act to legalize political donations to corporate donations to political parties. Then they put a ceiling. Now, there's a little bit of hesitation, seven and a half percent of profits. That was a ceiling. Now, India government, surprisingly, did two or three things. You know, 1976, they brought in this Foreign Contribution Regulation Act. No political party, no political candidate can accept donations from foreign companies. It's banned. But all the major political parties in India were accepting donations, illegal donations from foreign companies, violating the Foreign Contribution Regulation Act. So I went to the Delhi High Court along with another NGO, Association for Democratic Reforms. We filed a case saying that these are all illegal donations. So you must take action against BJP and Congress for violating the... And the Delhi High Court gave a favorable judgment. And because of that, Mr. Arun Jaitley... No, no, no, there's another thing. You see, what happened was the Delhi High Court said, within six months, take action under FCRA against the two political parties. So both the political parties filed appeals in the Supreme Court. They lost. They lost Congress and the BJP. They lost the case. Then I issued a notice to Government of India, Ministry of Home Affairs, saying that, look, you have not taken any action within six months as directed by Delhi High Court and Arun Jaitley. So why I should not file a contempt petition against you? They did not respond. So I filed a contempt petition in the Delhi High Court. Then, while this was happening, the present NDA government openly, they retrospectively amended Foreign Contribution Regulation Act. Obviously, with a view to, you know, somehow get out of the judgment. And they've got away. And they've got away. And then many trust... So many have been trusted by Vedanta Group. No, then along with this, what they've done was, just note the Foreign Contribution Regulation Act. They lifted the ceiling of 700%. And then Mr. Modi and Mr. Jaitley and all these people talk of reforms and all that. They should make electoral contributions transparent. They introduced electoral bonds, which are made the donor and the donor anonymous. So many things have been... But what I mean, the State Bank of India knows who's the person who's purchased those bonds, isn't it? The State Bank of India is a part of the government. The government. Article 12. So it's not actually making the situation, I mean making political funding or campaign financing more transparent. Not at all. Not at all. In fact, they have introduced, I think, greater anonymity into the whole thing, the NDA government. Now, I filed a case questioning the Retrospective Amendment. That's a different issue. So my point is, when a political party, you know, no political party wants to come within the purview of their Right to Information Act, even though there is a Sentinel Information Commission order to that effect, any political party worth its salt should come and say, look, I'll come within the ambit of RTI voluntarily. No, that's not happening. That's not happening. You're not considered a public institution. Yeah. But today, you see the analysis done by the Association for Democratic Reforms. The ruling political party, ruling BJP, which is the leading NDA, they've got more donations from all these foreign companies and other domestic companies compared to other political parties. Thank you so much, Dr. Sarma, for giving us your type. Thank you for being with us and keep watching NewsClick.