The fundas behind the funds

via HARAN.B.R published on June 10, 2008

In the last four years, the UPA government’s performance has been pathetic in almost all fronts and the ‘economy’ of the nation has not been handled well despite the presence of experts like Prime Minister Manmohan, Finance Minister Chidambaram and Planning Commission Chairman Montekh Singh Aluwallia. Though the GDP growth is steady, the inflation and price rise are alarming and unknown external forces are manipulating the stock market. The flow of funds, purportedly made with ulterior motives, into this country through such unknown sources is reportedly unnoticed. The UPA government’s attitude towards both corruption and terrorism has been appalling since the beginning. The government is guilty of not only ignoring them but also of alleged abetting of both.


It is alleged that the Congress led government has been neglecting the inflow of foreign funds for terrorist activities inside India. It is reported that the funds invested in capital market through Foreign Institutional Investors (FIIs) using Participatory Notes (P-notes or PNs) allegedly act as a derivative tool for indirect investments. Former SEBI (Securities and Exchange Board of India) Chairman M Damodaran had recently opined that he was not entirely comfortable with the foreign investments through the P-notes, which form almost one fourth of the capital market. He had even suspected the genuineness of the sources of those huge funds and doubted if they could be either domestic black money routed through P-notes or terrorist outfits. It may be recalled that the National Security Advisor M.K.Narayanan had also stated that terrorist outfits have been manipulating the stock markets to raise funds for their operations.



Though the FIIs are registered with the SEBI, their beneficiaries to whom the P-notes are issued are not registered, but those beneficiaries can invest in Indian Capital market. There is another factor called ‘Hedge Funds’, the money borrowed cheaply from western markets and invested in emerging markets like India, which play havoc in the stock market, thereby enjoying most of the rising local currency. They also flow through the P-notes from unknown sources. Even the RBI seems to be apprehensive about the rerouting of slush funds. The Prime Minister and the finance Minister, both being advocates of globalisation and market economy, seem to have absolutely no idea on whether the p-note facilities are abused by unknown sources and whether they are going to result in acute danger.  


There is a lot of substance in the concerns expressed by parties like BJP and AIADMK, and the UPA government cannot afford to ignore them as yet another ranting of the opposition, because, the issue has captured the attention of the nation. A retrospection of some of the events in the last four years of UPA rule would be suffice to understand the fact that the UPA has not been serious and that the concerns expressed by the opposition need stern attention.


While the country has seen the UPA’s record on corruption through the facilitated escape of the Italian fugitive Quattrocchi in Bofors scam, and, the demeaning Volcker Papers in the Oil for Food scam, its latest indifference over the huge black money stashed in the banks of the tax haven Liechtenstein, Germany has only added to its dubious track record. While the German authorities say that they would give details of the account holders to any government that asks, the UPA government has been simply maintaining a deafening silence. Other countries including US, UK and France have all sent their request letters to Germany. The Times magazine in its issue dated June 7, 2008 has reported that US Justice Department is trying to force the Swiss Bank UBS to reveal clients’ (20,000) names in a drive against tax avoidance, as the US Government believes that the Swiss bank has helped some of the wealthiest Americans to evade $300 million (£152 million) in taxes.

    Only after the opposition leader Adwani’s letter to the Prime Minister on May 16 and when the BJP raised the issue publicly on May 21, the Finance minister came out with an explanation that the GOI had already written to the German authorities in February itself asking for the details of Indian account holders. He had said that the German authorities would disclose the details once they get hold of the records from the Liechtenstein bank. One wonders why the government has not made it known to the nation, even after three months! The fact that Germany has not sent the details even after three months has indeed cast a doubt on FM’s statement and if this government would seriously and sincerely pursue the case.


With regards to terrorism, the UPA government’s pathetic record is evident from the increase in frequency of terror attacks on Indian soil. Terror outfits have to be financially sound and only then they can carry terror attacks. The alarming increase in terror attacks in India shows that huge terror funds are flowing across the country and the government is either absolutely blind or deliberately turns a blind eye. While the Home Minister is clueless, the National Security Advisor is callous. Despite the assertion of the NSA that the terror outfits are manipulating the stock markets and that they are likely to target ports, defence establishments, atomic research centres and IT Companies/MNCs, the government has not made any headway to arrest the flow of funds and it has also acted as if it has not taken note of his assertions.


With the involvement of one particular community becoming obvious in terror activities, the UPA government’s repeated pandering towards that community determining its appeasement policies and vote bank politics has become a great cause for concern. The motives of certain pseudo-secular and left-oriented socio-political organisations, NGOs, individual intellectuals and liberals, who indulge in raising their voice in support of terrorists in the name of human rights and secularism are suspicious and they might act as facilitators in transacting the slush funds. This area needs to be focused and the government must ensure that such organizations and individuals are brought under the intelligence scanner. The government has also been restraining the intelligence agencies and curtailing the investigating agencies from going deep into the areas dominated by the terror community, which indirectly facilitates the mushrooming of sleeper modules aiding terrorists and abetting terrorism.


The UPA’s ‘portentous negligence’ is threatening and the UPA must realize that ‘Appeasement leads to Anarchy’ and ‘Negligence leads to Devastation’!  

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