A joint parliamentary committee is not the perfect but the best option to inquire into the cesspool that Indian cricket seems to have become, CPI(M) MP Sitaram Yechury tells Aditi Phadnis
The government set up a joint parliamentary committee (JPC) to inquire into the 1992 Harshad Mehta stock market scam. In its action taken report, it said: “The main regulator of stock exchanges, Sebi, has been in place since 1988, and should have been able to regulate the liberalised market more efficiently. If Sebi had continued to improve its procedures, vigilance, enforcement and control mechanisms, it could have been more effective in a situation where the stock market became unusually volatile, leading to an unprecedented surge and subsequent depression…”
As to the ineffectiveness of JPC as an institution, you forgot the one into the Bofors scam that whitewashed the whole matter.
Despite this JPC, a similar scam broke out in 2000 when Ketan Parekh manipulated the markets to cause the collapse of Madhavpura Mercantile Bank. Two JPCs, and two identical scams. What will a JPC on the Indian Premier League (IPL) achieve that government agencies won’t?
But, when we asked for a JPC, our point was simple. We are looking at the Central Board of Direct Taxes to conduct its own inquiries. The Enforcement Directorate and the Income Tax (I-T) Department are also questioning and surveying companies and individuals. All these are compartmentalised, piecemeal pursuits. We don’t think that actual truth will come out if so many agencies are pursuing their own leads.
Those behind IPL were misusing Indian people’s fondness and affection for cricket to make mega profits through a huge commercial event like IPL. That whole economy was not just held up by cricket and lovers of the game, but various franchisees, media houses, etc. It isn’t just about taxes and money. It is also about influence. If the whole plot, in its entirety, is to be unearthed, you need more than CBDT and I-T inquiries. That’s why we suggested JPC.
There’s another thing. Whatever these agencies find should be under public scrutiny. After all, at this point, whatever these agencies find, whatever they unearth, is the property of government.
They will make public what they want to and hide what they want to. As it is, so far, all we’ve been getting are selective leaks by various agencies. So, even for the public persons involved, there will be public scrutiny if a JPC is set up.
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If past JPCs are any indication...
Yes, I concede that. We’ve seen the Bofors JPC. The Harshad Mehta JPC produced nothing that could prevent a second similar scam. There were vested interests, pressures, people wanting to hush up the matter.
But just because our past experience has not been good, should we give up on JPC as an institution and let the government function in its wisdom?
Also, consider the current atmosphere where individuals, it seems, are being shielded from exposure. A JPC will be universal for all (major) parties. Everyone will be represented. It will ensure a higher degree of transparency.
It is important to restore the people’s faith in the system. I said in Parliament that we live in a society where one section has IPL and the other BPL (below poverty line).
But IPL is all about cronyism. Do you seriously believe that a JPC will be able to nail people who are one among you and share the same seats as you in Parliament? Isn’t this just somewhat refined cronyism?
Yeah, but what is the answer? There are political parties which are not so clean, and others that are above all this and can bring correctives to the system.
Prime Minister Manmohan Singh has said on a number of occasions in Parliament that one vice India cannot afford is crony capitalism. IPL is a savage expression of crony capitalism. Since he himself has said that, his sincerity is under test.
When, as finance minister, Yashwant Sinha signed the double taxation avoidance treaty with Mauritius, we said it would be used as a conduit for illegal money. A double taxation avoidance system works between countries which have the same tax system. But Mauritius doesn’t have a capital gains tax, unlike India. So, this helped individuals and companies avoid tax.
If you look at the bids and the net worth of companies, there is a huge mismatch. From a superficial study, it appears IPL is a way to drive up valuations of companies. What is not clear is what these valuations would have been leveraged for.
That’s exactly the point. A company has a paid-up capital of 4 crore but gets a bid of Rs 150 crore. Whose money was it? How was it being laundered ?
Several state governments have waived entertainment tax on sports. Do you support this?
We believe sports should be encouraged and are not in favour of taxing it as a general rule. But when sports is an avenue for fast and easy money and an arena for illegal money, we think it should be taxed. Tickets sell at Rs 40,000 a piece. There is clear money-making. Anything that yields profits should be taxed.
Are you serious and realistic in your demand for nationalisation of cricket ?
We wouldn’t want the sport to be nationalised. But we’re for treating cricket and IPL differently.