September 14, 2014
Expectations from Narendra Modi's trip to the United States need to be more realistic
September 14, 2014 Last Updated at 21:50 IST
Expectations of Prime Minister Narendra Modi's visit to the United States later this month need to be modulated with stiff doses of reality. Structural weakness in the United States means that it cannot offer much; and what can be offered is further limited by India's inability to leverage it to advantage.
In contrast to the last few years, there is a perceptible shift in the dynamics of the relationship between the two counties. Although President Barack Obama had developed a warm and personal relationship with former prime minister Manmohan Singh, the latter's manifest political weakness meant that this personal chemistry yielded few tangible results.
Now, when Mr Modi heads to the United States, the shoe is on the other foot. While the jury is still out on his domestic policies and programmes, there is little doubt that he has shown purpose and dexterity on the foreign policy front - both wooing and lining up suitors - while the United States has by and large remained a bystander. A confident Indian prime minister faces a beleaguered and distracted United States president. On the domestic front, President Obama's dreadful relationship with the Republican-controlled Congress has stymied him at every step. And on the international front, he is distracted by crises - from Ukraine to the West Asia to the South China Sea - where the limits to American power are palpable and its mystique is eroding.
The emerging structural weakness of American power means that a key lubricant of power in the modern age - money to underwrite programmatic initiatives - is simply not there. Both Japan and China are willing to commit - at least in principle - to considerable amounts of money to build India's infrastructure. Of course, there is self-interest involved on the part of both governments. Sadly in the United States' case, not only are American firms more expensive but government financial support ranges from minimal to non-existent. Even the modest tools that the United States has such as the Exim Bank face the threat of being shut down by a Congress unwilling to renew its charter.
To take another example, the United States and India may differ on the specifics of controlling carbon emissions, but both have a common interest in undertaking serious research on mitigation and adaptation. Not only is there little money to develop new initiatives, instead, economic fears are keeping the pot bubbling on major irritants in the relationship - such as the United States Trade Representative (USTR)'s crusade on pharmaceutical intellectual property rights, or the unwillingness to sign a totalisation agreement, or periodically vilifying the H1-B visa programme. Money is not the answer - but it is helpful in finding answers.
The structural weaknesses of the United States are compounded by a perceptible lacuna in American bureaucratic resources - both number and competence - devoted to India. From the White House to the State Department to the Treasury, the leadership and personnel resources related to India are extremely limited. The trend toward centralising foreign policymaking in the White House has not been matched by a strong advocate of India within the White House of sufficient stature. In the same vein, the absence of a United States ambassador to India (indeed no one has even been nominated as yet), even after a less than stellar stint for the previous ambassador, speaks volumes of United States' priorities. Indeed if bureaucratic resources devoted to a country are any measure of "revealed preference" on how important the country is on the United States government radar screens, then in this administration the paucity of resources is pretty damning. And where resources are committed, as in USTR, India is seen as enemy number one.
One could argue that India is itself to blame, having shot itself in the foot with ill-advised policies over the last few years, and America's tepid interest is its logical outcome. But to the extent this is true, great powers do not stay great for long if they are primarily reactive.
Compounding these shortcomings is a state department that still devotes considerable resources on well-publicised annual reports on "worthy" issues ranging from religious freedom to human trafficking to human rights, whose hectoring report-card tone might please domestic constituencies but almost certainly raises hackles with emerging powers like India. Prison populations or gun-related deaths are also worthy causes - but if emerging powers write annual reports on these issues, it would hardly be helpful in strengthening their relations with the United States.
Unfortunately, where America has strengths, India has weaknesses. There are a range of issues where India has a lot to gain by partnering with American institutions. Take higher education or building "smart cities". But who would want to partner in higher education when the Indian regulatory institutions are All India Council for Technical Education and University Grants Commission ? And with the 74th amendment effectively gutted, cities in the United States do not have effective counterparts, since power continues to be concentrated at the state level.
This is not to say that there are areas where India cannot seek help from American public institutions. The Centers for Disease Control and the National Oceanic and Atmospheric Administration are two excellent institutions that can help India build capabilities in important areas (epidemiology and weather modelling).
The heavy lifting in deepening the relationship will have to come from the two singular strengths of the American system: defence production and private-sector investment. In both cases, India needs help - but can only leverage American strengths if it moves rapidly to remove the multiple bottlenecks that have limited the potential gains.
India's stance on defence production has been that we would rather have our armed forces poorly equipped, and if not, give you money - lots of it, often in dubious ways - rather than have firms set up production facilities in India. There are few policies in India that have been as incredibly self-defeating as defence procurement. Given the fiscal pressures facing western defence contractors, India is in a much better bargaining position to invite them to set up shop within the country. And the United States has to consider whether it would rather keep the multiple controls on technology transfer - especially on non-strategic weaponry - or allow a core strength to be drained away to competitors.
But the bedrock of the relationship will have to be the private sector. That will require regulatory certainty, an improved macroeconomic environment and swifter policy implementation on the Indian side. Both sides have certain weaknesses that could limit the private-sector partnership. In the United States' case, some business sectors are too close to certain agencies of the United States government (the pharmaceutical sector being a prime example), leading the government to mistake the sectoral trees for the forest of the overall relationship. In the Indian case, the self-confidence of the CIIs and Ficcis notwithstanding, the private sector simply lacks any strategic vision. Whether that can (or will) change remains to be seen.
For these reasons expect a lot of pomp and professed bonhomie from this trip. But as regards substance, lower your expectations.
The writer is director of the Center for the Advanced Study of India at the University of Pennsylvani
Posted by Naxal Watch at 10:07 PM
September 13, 2014
India Inside: Astonishing Tales of How the United States and India Are Intertwined
Posted: 09/11/2014 5:28 pm EDT Updated: 09/11/2014 5:59 pm EDT
As Washington prepares for a historic visit by India's new Prime Minister Narendra Modi on September 29, many are unaware of the histories of these two free econom...
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First of a three part series highlighting how the ties between the world two largest democracies are rooted in history. As Washington prepares for a historic visit by India's new Prime Minister Narendra Modi on September 29, many in America think that interaction between America and India, separated by nine to twelve time zones, must have been enabled by jet travel.
While the Boeing Company is the largest American exporter to India today, selling Dreamliners and defense aircraft, trade between the countries had maritime beginnings. In reality, the histories of these two free economies have been delicately intertwined for more than 500 years.
India: The Bird of Gold
According to British economist and historian Angus Maddison the richest economies of the late fifteenth century were China and India. But intrepid Europeans driven by gold, glory and god in that order were ready to build better and more reliable ships to find a reliable sea route to the "Indies." As every American schoolchild learns, Italian explorer Christopher Columbus, after being refused by the King of Portugal, received funding from Ferdinand of Spain to sail west and "discovered" the Americas on October 12, 1492.
And the next five centuries marked the rise of the Americas, particularly of the United States. India touched the American ascent at key points in U.S. history.
On July 8, 1497, Portuguese royal Vasco Da Gama led a fleet of four ships with a crew of 170 seasoned and experienced men in a different direction from Columbus, around the coast of Africa, but with the same goal. Da Gama's fleet arrived in Kappadu near Calicut, India on May 20, 1498 on India's western Malabar Coast.
Portugal, France and principally Great Britain slowly colonized, some would say plundered, India. By the mid-20th century, India produced just 2% of the world's GDP compared to about 20 percent when Columbus and da Gama went exploring. But I get ahead of myself. India was a major exporter of spices, textiles and tea. On December 31, 1600, the British East India Company, was formed and soon granted a royal monopoly by Queen Elizabeth I for all trade in and out of India. This made its top executives as wildly affluent as the Silicon Valley entrepreneurs of today and they also enjoyed political power and prestige.
Yale, Yorktown, and the Star Spangled Banner
One such success was Boston- born Welshman Elihu Yale who had a 20 year run with this company and was second governor of Fort St. George (now Chennai), India. In 1718, the tiny Collegiate School of Connecticut in New Haven wrote to Yale asking for financial support. Yale shipped a carton of goods which the college sold to fund a new building. When the college asked for more money, Yale complied on the condition that they rename the school for him. And so was born Yale University. Today's Yale's power in American society and academia, and the size of its endowment, is exceeded only by Harvard; don't forget that it began with money first made in India.
By 1773, the 13 colonies were consumers of much of the trade with India that continued to enrich the British crown and top executives of the John Company (the nickname for the East India Company which was by then more powerful that today's GE, IBM Apple put together). American revolutionaries calling themselves the Sons of Liberty dumped 373 chests of East India Company tea from the SS Dartmouth into Boston Harbor on a frigid December day, marking the beginning of the American Revolution.
The bitter battles for American Independence lasted for nine long years until George Washington defeated British general Charles Cornwallis at the Battle of Yorktown on October 19, 1781. The 43 year old Cornwallis was down but not out, however. He returned from Virginia to England to cool his heels for a short time but then was appointed to the top post of the British East India Company and given the title of Governor General of Bengal. Cornwallis was remarkably successful in India. The Cornwallis Code became the cornerstone of revenue collection, land management, justice administration and police systems. Echoes of the Cornwallis Code still remain in the way that India's government functions today. I remind American executives of this legacy of the Battle of Yorktown, when their companies try to buy real estate in India today.
The Wadia family in India built the HMS Minden, a 74-gun teakwood boat on which attorney Francis Scott Key was held prisoner by the British in Chesapeake Bay on one rainy September night during the War of 1812. In America, everyone knows that as he watched the lone American flag fly atop Ft. McHenry, Key penned a poem which we call the Star Spangled Banner, our national anthem. Today the Wadia (boatman) family, descendants of Persian refugees to India, runs Bombay Dyeing, a textile company and GoAir, an airline.
The South Falls, Bombay Rises, Selling Ice to the Indians
During the American Civil War, exports of cotton from the Confederate States of America to Europe were blocked. Indian entrepreneurs had started growing the crop in the rich black soil of Western India, but the shortage in the Civil War caused a boom in cotton and in the textile mills that supported the crop prior to its export to England. During the Civil War, Bombay boomed and the expansion continued for decades afterward, making it India's largest city today and the one that contributes over 30 percent of personal income tax by all Indians.
Later in the nineteenth century, a remarkable American entrepreneur made millions selling ice from New England around the world. Frederick Tudor sent ships loaded with ice and insulated by sawdust all the way to the ports of Calcutta (now Kolkata) where the British East India Company had its Indian capital. They granted him an exception to their monopoly since ice from the Himalayan Mountains was far more expensive, and Tudor's emissaries built ice houses in Calcutta and Bombay. This improbable sounding story of American exports is beautifully documented in Gavin Weightman's 2004 book "The Frozen Water Trade."
We the People
A hundred years ago, on the West Coast of the United States, a ragtag group of Indian expatriates organized themselves into the Gadar Movement, whose goal it was to help India become independent of British rule. About the same time, Bhimrao Ramji Ambedkar came to study for a master's and doctorate at Columbia University in New York. Ambedkar was later a key architect of the independent India's constitution. The first three words of India's constitution are the same as those of the United States: "We the people."
It is important to remember this shared DNA as we in America look at trade, cultural and political opportunities with the world's second most populous country when Prime Minister Modi arrives in Washington this month.
Posted by Naxal Watch at 9:30 PM
September 12, 2014
Source: Institute for the Study of War Iraq Updates
ISW has updated its ISIS Sanctuary map in advance of President Obama’s speech on a strategy to confront ISIS. This map, covering both Iraq and Syria, shows the extent of ISIS zones of control, attack, and support throughout both countries.
ISW has updated its ISIS Sanctuary map in advance of President Obama’s speech on a strategy to confront ISIS. This map, covering both Iraq and Syria, shows the extent of ISIS zones of control, attack, and support throughout both countries.
Posted by Naxal Watch at 2:58 AM
Sep 11, 2014, 08.44 PM IST
Arnab Goswami: Mr Vinod Rai thank you very much for joining us. I looked forward to meeting you and talking to you for a very long time. I wanted to talk to you when all the scams were breaking out. And you avoided us.
Vinod Rai: No I did not avoid you. But I was doing a job which did not require me to speak to the media every other day.
Arnab Goswami: And when you spoke to the media people got very upset.
Vinod Rai: Well not really. I hardly spoke to the media when I was on the job. Later on, after I retired I did speak to the media more extensively.
Arnab Goswami: Are you ready to speak to us?
Vinod Rai: Sure
Arnab Goswami: I have put down a lot of things which I felt the people need to know and the nation needs to know in writing. So I can certainly talk about them now.
Arnab Goswami: First of all Congratulations on your book, here it is, the first cover, 'Not just an account, the diary of a nation's conscience'
Vinod Rai: Yes, well, I don't know if in any way I have infringed on the IPR, Intellectual Property Rights of the Supreme Court because the Supreme Court has observed in a judgment that the CAG is not only a 'Munim' (Accountant), he is a constitutional appointee. So we picked up the title of the book from there.
Arnab Goswami: Expectations are big. Its a season of tell all books now-a-days. We have had Sanjaya Baru, Natwar Singh, PC Parakh, now yours, so are you going to reveal as much as possible today? In the course of this conversation because the show is Frankly Speaking. Are you going to reveal as much as you can about Coalgate? About 2G? And about CWG, and anything else I ask you.
Vinod Rai: Well certainly why not, to the extent that I have written about things. I must reveal those things because I think a large number of people need to know what's transparency all about. What's accountability all about? In fact the factors which drove me to write this book is that people should know how the government functions. And that's why...
Arnab Goswami: Or how the government should not function? Well if they did not function properly it was for the external auditor to point it out to them. Do you the think revelations in your books and what we are going to talk about today will be as fearless as your audit reports were Mr Rai.
Vinod Rai: Well certainly, if there was any element of fear, anywhere then we should not have come out with all that we came out with in our reports. Fearless, certainly why not.
Arnab Goswami: I looked forward to them . Mr Vinod Rai a couple of weeks ago you were quoted as having said, 'Politicians came to my home, and told me not to name some people and to protect some others in connection with the commonwealth games and the coal allocation reports'. That is my first question to you Mr Vinod Rai is who are these politicians?
Vinod Rai: See to a certain extent I have not been very accurately quoted in that particular news item. What I have mentioned, and what I had mentioned has been written in the book is that during the course of meetings in the in the PAC or the sidelines of the JPC, etc large number of people told me that look we need to keep this out and we need to keep that out. And I mentioned in the book that after the PAC meeting on the 2G, Congress MPs did tell me that keep the Prime Minister out of this. Now, my logic then was that there were...
Arnab Goswami: Which Congress MPs?
Vinod Rai: Aaah.. There were 3-4 Congress MPs, they aren't Congress MPs anymore. So its very easy to find out who are they ( Arnab interupts)
Arnab Goswami: It is very difficult to find out because most of the Congress MPs did not get re-elected,
Vinod Rai: I can't recall the names just now, but the Congress MPs who were present in those meetings were Mr Sanjay Nirupam, Mr Ashwini Kumar, Mr Sandeep Dikshit. Now which of them were at the lunch telling me to do that I really can't tell you
Arnab Goswami: But all of these MPs in different ways did tell you to keep the PM out of it.
Vinod Rai: But that was the time when the report was already out. And I mentioned to them that there are letters written by Mr Raja to the Prime Minister and the Prime Minister has replied to them on the same day. And these were decisions that were taken by the telecom minister. Keeping the Prime Minister full informed, on how do we keep them out.
Arnab Goswami: It is a completely unethical thing to do for members of parliament to try and influence you and keep the Prime Minister out of it.
Vinod Rai: But there was no way in which they could... Ethical or unethical, otherwise.
Arnab Goswami: But they did try.
Vinod Rai: But when they...
Arnab Goswami: But they did try
Vinod Rai: But the report was already out.
Arnab Goswami: But they did try to
Vinod Rai: Ya, but the report was already out.
Arnab Goswami: What did they say to you?
Vinod Rai: They just said keep him out. But the argument was futile. The argument was that, that was ... futile attempt.
Arnab Goswami: If you're saying these Congress MPs were trying were trying to frame some kind of a ring side defence around the Prime Minister. Why would they do that?
Vinod Rai: It was not only a ring side defence. What I have mentioned in the book also is, that see what happened to the 2G PAC was that when the PAC was constituted, sometime in April 2010, our report had not come out as yet. Our report only came out on 16th November, 2010. The then chairman of the PAC wanted to conduct his meetings on 2G. We told him we don't have a report as yet. So he started Suo Moto meetings. The first meeting was on 20th June itself.
Arnab Goswami: I want to come back to what you said. We will go into these details. When you were quoted as saying and you say this wasn't a very accurate quoting, but you did say. And this is all in the context of the fact the Mr Vinod Rai as a person in his book itself says the nation's conscience keep and you are one of those people who has actually held up the dignity of the office of CAG, and the constitutional office that you held. So people came to your house you say, 'some messages we did receive', something which I have written about in my book. You talk about the lobbying by senior UPA fuctionaries, to ensure that they did not figure in the CAG's reports on scams which were being looked at by you. Tell me more about this?
Vinod Rai: Yea, that's why I said...
Arnab Goswami: I think the time has come to reveal a little bit about these
Vinod Rai: Yea I will tell you about each one of these...
Arnab Goswami: Did someone from the PMO come?
Vinod Rai: From the PMO, No, nobody came to try to influence me on any of the reports ... which we are not ...
Arnab Goswami: Did anybody from the PMO come to meet you to talk to you?
Vinod Rai: No no, friends of the PMO ... I see, among friends and officials we are friends all the time. We meet, but nobody came to influence at the time of preparation of a report.
Arnab Goswami: See, my colleagues were encouraged to talk to me, my colleagues meaning bureaucrats?
Vinod Rai: Yea, I have said that in the context of another issue. That was on the civil aviation issue. I have said that because the report, a draft report had been given to the civil aviation ministry had a particular trend. Now, those colleagues, a large number of them felt that we were not being accurate in having used a particular word.
Arnab Goswami: I will come to that as well. When these scams were breaking out, I am principally talking about coalgate, 2G and CWG Mr rai, did bureaucrats from the PMO come and visit you? Did they try to speak to you? Is it true they came and talked to you and met you to give their perspective on it because there have been some reports that some top bureaucrats from the PMO came and visited you and tried to speak to you at that time. You were giving the government a lot of trouble.
Vinod Rai: Exactly, top bureaucrats in the PMO were all friends and colleagues of mine. We meet and interact all the time socially OK. But nobody came to me in the context of trying to pressurise me or to influence the content of a particular report.
Arnab Goswami: Did Mr TKA Nair come to meet you?
Vinod Rai: TKA Nair. I have known him from Kerala days. We meet very often, in fact I met him only about a fortnight back.
Arnab Goswami: What did TKA Nair tell you at that point of time?
Vinod Rai: Nothing to influence me or the report at that point of time.
Arnab Goswami: What did he say?
Vinod Rai: Well socially we have been meeting. I have been to his house a dozen times; he has been to my house a dozen times.
Arnab Goswami: Mr Rai, you on multiple occasions in the book and including an entire chapter have spoken rightly about accountability, probity and transparency, You have even said and I would like to quote you- This is a book about accountability, this is a book about transparency, it is about that vital quality in society of which we seem to have created a huge deficit of ethics. If that is so Mr Rai, why haven't you named all these politicians? Shouldn't you walk the talk?
Vinod Rai: Most certainly I have named each one of them. See this book is divided into 3 parts. First is my early life, my career as a civil servant, whether in kerala or in Delhi, or in fact I spent a year in Nagaland, I have written about that also. The second part I have taken up 5 case studies about those audits that we did. Because I thought they were the most authentic documents available with us. And then I have analysed each one of these audits into who went wrong in each one of them. I have chosen these five not because they were sensational only, they were certainly sensational, but because of the different types of failures which took place in those audits. Now, in the course of these audits, anybody we found fault with or any decision we thought had gone awry, we pointed it.
Arnab Goswami: No, I am saying this Mr Rai, because the entire country would want to know who were responsible for these scams. Who allowed it to happen? Why was there so much brazenness at that point of time. And whether you feel in the future this brazenness will continue or stop. So lets start with the 2G scam, I want to start by discussing the role of the Prime Minister at that time Dr. Manmohan Singh. You write and I quote- He that is Manmohan Singh chose for reasons, which can only be speculated, to ignore the warning signals. Let me ask you very directly Mr Rai. Do you put the onus of the 2G scam on Manmohan Singh? Do you think Manmohan Singh could have prevented the 2G scam and failed?
Vinod Rai: See its like this, the Prime Minister in any country, or is the primus inter pares of a council of ministers is number one. All matters of importance go to the Prime Minister. And ultimately the buck stops on the prime minister's desk. In this particular case I found that minister of his own council who were writing to him again and again, saying that problems are, or there is talk about developments in the telecom sector, I quoted Mr Kamal Nath who is was the Commerce Industries Minister, writing to the prime minister and expressing concerns about the development in the sector. I have written about the finance ministry expressing concerns, I have written about the law ministry expressing concerns. Now, all these things went to the prime minister.
Arnab Goswami: So the Prime Minister could have replied to all of these things differently. The Prime Minister you yourself sad could have responded to Mr A Raja differently. And you have said that if he had done so, the course of India's political history, Mr Vinod Rai, would have been different. What in your view stopped the Prime Minister from acting in the way that he should have.
Vinod Rai: Well I do not want to speculate any reason. But I believe in a large number of ways it may have been a compulsion of coalition politics. Because 2G, the entire telecommunications sector was being handled by a different party other than his. And we had evidence of the license being given out at particular prices not only from Mr Raja's time but before also from the previous minister who was also from the DMK. He found that there was a track record that the previous minister had started in a particular way; Mr Raja took over in that particular way. But Mr Raja kept informing the Prime Minister what he was planning to do.
Arnab Goswami: Raja has all along maintained. Let's go deeper, Raja has all along maintained that the prime minister was in the know and every action of his was at the Prime Minister's approval. Do you believe A Raja?
Vinor Rai: I don't want to go into the statements made by A Raja. He has written a letter on 15th November to the Prime Minister, he had written a letter on 26th december of the Prime Minister, in both the letters he has indicated what he is planning to do. And whether he has; approval of the prime minister on record I don't know. Prime Minister's correspondence with Raja clearly indicates what he is planning to do. And whether he has the approval of the Prime Minister on record, I do not know.
Arnab Goswami: No, the Prime Minister's correspondence with Raja clearly indicated that Raja intimated the Prime Minister about his plans to advance cut off dates and change the rules of the game.
Vinod Rai: On 26th december he has written that and he has got a very template reply to it.
Arnab Goswami: A wishy washy reply?
Vinod Rai: No it just says I have received your letter, which briefed me about the developments in the Telecom sector, Now that is the place where may be...
Arnab Goswami: Does the Prime Minister respond like that?
Vinod Rai: Well these are what we call interim replies. Its acknowledgement of a letter that has come, that's all. And it would be followed up with a regular reply. But as a reply what should have probably gone out is please do not take the steps it is discussed in a group of ministers.
Arnab Goswami: So Manmohan Singh should have paid heed to the warnings received by letters from Subramanian Swamy, Rajeev Chandrashekar in 2011.
Vinod Rai: Well all those letters did come in, but his own cabinet colleagues were advising him. Like his own cabinet colleagues were saying that lets discuss this in a GoM. The finance ministry was also saying that lets bring it to a group of ministers. The Law Ministry had also advised him to do that. But somehow it did not take place.
Arnab Goswami: So he could have put his foot down and insisted on an auction, instead of just acknowledging the receipt of Raja's letters.
Vinod Rai: It may not necessarily have been an auction. It could have been any course of action. But a unilateral decision taken by the then telecom minister.
Arnab Goswami: He could have been more assertive. You would say vis-a-vis Mr Raja instead of just accepting his version of the event. I mean the letter here which you quote in your book, 2 or 3 times the Prime Minister says, you know Sri Raja i have received your letter, dated 26th december regarding the recent developments in the telecom sector with warm regards, yours sincerely Manmohan Singh.
Vinod Rai: That's what I call a template response.
Arnab Goswami: It's a ridiculous response.
Vinod Rai: It's a template response.
Arnab Goswami: You're being polite about it.
Vinod Rai: It's what we call an interim response. It is only to say 'I have received your letter.'
Arnab Goswami: Yeah he could have overruled Raja.
Vinod Rai: In a couple days time, or maybe even at that time, take it to a group of ministers, as he was advising otherwise also.
Arnab Goswami: He didn't do that. He could have annulled the liscences allotted by Raja in that 4 month window between liscences given and the actual spectrum allotted. The liscences could have been annulled in that period had the prime minister put his foot down.
Vinod Rai: Well that would have been an extreme step, but it could have been stopped because between this letter of 26th december and 10th of January when the LOIs were actually issued, there was a fortnights time.
Arnab Goswami: Well then in that case, it's quite obvious Mr Rai, that a person who had seven or eight stages of the development and evolution of one of the biggest scams in the world, the 2G scam, who could have acted and stopped it all, was Manmohan Singh.
Vinod Rai: Well as I told you, the buck stops at the PM's desk in any parliamentary democracy. He is the CEO of the country. He can stop, or he can initiate, both. I have written in the book that he probably chose not to stop.
Arnab Goswami: No, but you have said that the PM was completely aware, and this is the nub of the issue. You have written that it is obvious, and I am only enumerating what you have written - it is obvious by the exchange of these letters, between Raja and the PM that the PM is indeed aware of Raja's intentions, as way back as Novemeber/December 2007. So he was completely aware of it.
Vinod Rai: Most certainly so. And that is why I have reproduced those letters, which were in public domain, but may not have been seen by a large number of people, and that's the letter of 15th November and 26th December.
Arnab Goswami: And now that these letters are out, and a large party of these letters are in the appendix of your book, Mr Vinod Rai Rai, is there any doubt in your mind, and that's why I began by saying that today is a time to speak up Mr Rai, it's not a time to hold back, and I'm sure you respect the prime minister, I'm sure you remember the days where he taught you at the Delhi School of Economics, but I'm asking you as a journalist to the former CAG to speak up and tell me whether you think all of this, this scam, this whole first come, first serve 2G scam, could have happened without the active involvement of the then prime minister of India.
Vinod Rai: No, that's exactly why I have said that if he had put his foot down, probably the fate and the course of UPA 2 would have been different. If he had put his foot down and stopped this process from unfolding. It could have been any other process, we are not prescribing a process, it could have been any other process, but this process was faulty in a large number of ways. And the govt has also accepted that rules and regulations were not being followed, goalposts had been shifted, yes, the competition (?) that we did, they have been debating the amounts.
Arnab Goswami: It's a dereliction of duty, Mr Rai, that you are talking about.
Vinod Rai: Well, dereliction of duty, whichever way you put it.
Arnab Goswami: But the PM was completely aware, of each development in the 2G scam.
Vinod Rai: The 26th of December letter, makes it pretty clear, what the intentions of the then minister were.
Arnab Goswami: Why did you hold yourself back at that time? Did you speak to the Prime Minister? Tell me what your interactions were with the prime minister in this period, when you were investigating looking into, and when the 2G scam report came out.
Vinod Rai: Yeah, we did. You see for the CAG, it's not appropriate for the CAG, it's not ethical for the CAG to converse with the PM or anybody else in the govt on an issue which is coming out in a report. We don't go ask questions of a PM or a minister. We look at records, after we have looked at records, we raise queries, and they give us answers.
Arnab Goswami: You must have met him.
Vinod Rai: I have met the PM any number of times.
Arnab Goswami: What did he tell you about the 2G scam?
Vinod Rai: When I met the PM, the report was out.
Arnab Goswami: When was this?
Vinod Rai: And the first time I met the PM after the report was out was on the 16th of November itself. 16th of November was the day the report was tabled in parliament. That was the day we were completing 150 years of existence of the CAG's establishment, and we had a function in the Vidhyan Bhavan, where we had the President a nd the Prime Minister etc come, and that was when I met the PM for the first time.
Arnab Goswami: Who walked up to whom? Did you walk up to the PM or did the PM walk up to you?
Vinod Rai: It was my duty to receive the PM and escort him to -
Arnab Goswami: What did he say?
Vinod Rai: Well, the PM, the usual thing, he did mention that this report had been tabled today, and he had a defensive approach to our computations, he said 'I don't agree with your calculations'
Arnab Goswami: What did you say to him?
Vinod Rai: So I said, 'We have given four models of calculations, any of them can be taken as correct or I have said in the report itself. In the report itself it says that these computations can be debated, but that there has been a loss to the national ex checker, cannot be denied.
Arnab Goswami: You don't think the PM was trying to influence your mind?
Vinod Rai: By then it was too late. By then, the report was out, and he was not trying to influence, he did not try to influence me before the preparation of the report.
Arnab Goswami: Do you think, that the seeds of the scam rest in the fact that the PM of India, Dr. Manmohan Singh, consented to keeping spectrum pricing, outside the purview of the GOM, after giving in to the then minister, Dayanidhi Maran?
Vinod Rai: In fact that is an issue which we found, which we felt was leading up to the entire problem. In the year 2006, the then telecom Minister, Mr Maran decided that pricing of spectrum should not be within the terms of reference of the group of ministers which had been constituted earlier. And he wrote back to the then PM and even said that 'as I discussed with you, please keep this out.' And though the terms of reference were issued, and the meeting should have taken place, for the entire calender year of 2006 not a single meeting of the group of ministers took place because pricing continued to be a part of the terms of reference. It was in December that the cabinet issued revised terms of reference, in which spectrum pricings did not figure and then the meetings took place.
Arnab Goswami: Why did the PM of India oblige Dayanidhi Maran? And the term relating to spectrum pricing was deleted in the revised terms of reference issued on 7th December 2006.
Vinod Rai: That's very difficult for me to conjecture today, because it finds no evidence in the records of govt. There must have been conversations, but audit normally goes by record only, and we didn't find any other record, excepting this exchange.
Arnab Goswami: No, how can you say that? On 20th February 2006, Maran wrote a letter to Manmohan Singh asking for spectrum pricing to be kept out of the GOM's purview.
Vinod Rai: Yes. I said that in January and February. He's written twice. He's also written that 'as discussed with you', which means that he did make a pitch in a person to person discussion, to keep spectrum pricing out. And whatever assurance the PM must have given, the terms of reference were not changed. And since they were not changed, the meeting did not take place.
Arnab Goswami: Yeah, but there is no written proof that the PM obliged Dayanidhi Maran.
Vinod Rai: There is no evidence on record to show that how this issue has examined to remove pricing from the spectrum.
Arnab Goswami: Is this, is the 2G scam got a lot to do with the PM of India trying to keep his fingerprints off the scam while trying to influence it from behind?
Vinod Rai: Well that's not possible for any PM. It's not possible for any PM because what happens is each of these large issues do land up on the table of the PM.
Arnab Goswami: Mr Rai you refer, now let's go back to a certain MP from the ruling party that is the Congress Party, who went on to question, during a PAC meeting, the finance ministry for it's failure to compute losses during the 2G case. The same MP you say went on to point out how the deal for SWAN was a sweetheart deal and called it a black and white case. Who was this MP?
Vinod Rai: Yeah, see, what happened was -
Arnab Goswami: Who was this MP?
Vinod Rai: Now let me see if I can recall
Arnab Goswami: The congress MP, during a PAC meeting, questioned the finance ministry for it's failure to compute losses during the 2G case and actually, went on to point out how the deal for SWAN was a sweetheart deal and called it a black and white case.
Vinod Rai: Yeah. See what happened was -
Arnab Goswami: Who was the MP?
Vinod Rai: I'll tell you. See what happened was before the audit report was out. The PAC had started examination, and they called lots of people, finance ministry officials were also called in. And when the finance ministry was called in, the member that was then asking questions was one Mr KS Rao. He told them that look, have you computed the losses. They said no we haven't. So he said why haven't you done that. And they said we don't have the where withal to compute losses, which is very fair, it is not the finance ministry's job to compute losses, it is the audit's job. And he said look it's a very simple thing. And I have mentioned it because these issues were brought into media attention by the retired DG who said that it was -
Arnab Goswami: You talk about another MP, a lawyer you mention, presumably from the Congress again. Who wondered why there was no action by the finance ministry between 2001 and 2010 on bidding. Who was this MP? Was it of his own govt?
Vinod Rai: No it was not of his own govt. This was from 2001 to 2010, so it goes across two governments, and that was Mr Ashwini Kumar.
Arnab Goswami: Ashwini Kumar?
Vinod Rai: Yeah.
Arnab Goswami: And you also say that the same MPs later tore into the CAG's findings?
Vinod Rai: Yeah that's what I had said. You see what happened was before our report was tabled, these were the suo moto kind of examinations being done by the CAG. They didn't have my record. So whatever evidence was available to them, whatever information was available to them, from the media or wherever, they were talking on the basis of that. Once the report came, and we presented the report to them, I think the contours of the game had changed. And they found it worth their while to question the CAG's findings.
Arnab Goswami: Yeah but you say that the same MPs later tore into the CAG's findings. In fact you also say, and I think this is very important Mr Rai, that Congress MPs walked up to you during lunch time in parliament and said that we have to ensure that the PMs name does not get dragged into this - we come back to the same issue - adding, that what you people say sounds reasonable, but what do we do? Who is this MP?
Vinod Rai: Yeah, I told you. Sandeep Dixit, Sanjay Nirupam, Ashwini Kumar, these are the three names that I can remember, I can't remember
Arnab Goswami: Sandeep Dixit, Sanjay Nirupam and Ashwini Kumar
Vinod Rai: Yeah, these are the three names that I can remember; I can't remember all of them. These MPs certainly said - but it was too late, the report was already out, the PMs name was very much there in the report.
Arnab Goswami: So you're saying that privately Congress members were conceding that there was something wrong in the process, but they were trying to shield the PM?
Vinod Rai: They accepted that our findings were reasonable. Very clearly accepted that they were reasonable. That our findings could not be faulted on the fact that yes, rules and regulations had not been followed by the telecom ministry, on the fact that goalposts had been changed, we could not be faulted, they agreed with it also. The computations, well, they had a different viewpoint.
Arnab Goswami: Why were they doing this? Whose instructions were these congress MPs trying to protect?
Vinod Rai: Well, that's very difficult for me to conjecture. Obviously they must have had an agenda, but it's very difficult for me to conjecture.
Arnab Goswami: Who's agenda?
Vinod Rai: Maybe the Congress Party's agenda, or the UPAs agenda, I can't say 'cause parties, MPs, they represent a party,
Arnab Goswami: They're not in govt
Vinod Rai: They're not in govt, so obviously every party has it's own agenda. And lots of the discussions that take place, they take a policy decision and go by it.
Arnab Goswami: Did the Congress Party have something to hide then?
Vinod Rai: Well, I don't know if the Congress Party had anything to hide. There was nothing they could have hidden, it was already on record.
Arnab Goswami: Mr Rai, you were under pressure, you say, clearly in your book. But in your public utterances you have maintained that there was no pressure on you during your auditing process. You have been asked this question a couple of times, I think once to a magazine, once to Rediff, and you keep saying 'I faced no direct pressure excepting everyone saw through the media' --- I, are you trying to downplay the pressure? Because I have a feeling, a seasoned administrator like you, you know, you feel that the fact that you did not give in to the pressure, justifies that the fact that you don't have to speak of where the pressure came from.
Vinod Rai: Certainly not. Well, it's an equally seasoned journalist asking me these questions. But let me assure you, that if pressures of any, had come, number one they would not have made any impact on us, because the Indian ordinance department are very professional, totally apolitical, and they don't get exposed to any political leanings in their career, so there's nothing that they need to be cowed down upon. But pressures if any can they come, can only come through the media space.
Arnab Goswami: How?
Vinod Rai: Well in the media space people were talking about the CAG was exceeding his mandate, the CAG was going to media -
Arnab Goswami: I thought the media was supporting you.
Vinod Rai: The media has been very supportive, the judiciary has been very supportive, in fact that's one of the reasons why these stories have continued to produce practical results you know? They have. I mean, the audit reports that we put out
Arnab Goswami: Did you ever leak a story to the media?
Vinod Rai: Me a leak a story?
Arnab Goswami: Did you ever leak a story to the media?
Vinod Rai: No, no.
Arnab Goswami: Did you ever in a moment, perhaps you know, in a different form of epiphany think that you will not get to the truth in the normal way, hence it is important to put the material out in the public domain because none other than the PM accused you of crossing the line vis a vie the media
Vinod Rai: Yeah, I was confident of one thing. That there was no amount of pressure or force that could have stopped us from getting to the truth, that's number one. So we never had any doubts in our mind that any pressure would stop us from revealing the whole truth. But the strength of the audit dept is that they don't conjecture about anything. Anything that is in the documents is only what they write about, so that's why, anything that was spoken to the media, if it was spoken from the govt's side, I always responded to it, but responded to it in writing and didn't get into media space.
Arnab Goswami: But you were hurt by the kind comments that were being made about you. The book recounts every single negative comment that congress men & cabinet ministers said about you. At the end of the day & I said this to a politician & politicians usually have thick skins but bearcats don't. Were these comments made intimidate you? Were you hurt somewhere when all this was happening because personal aspersions were being cast on you including whether you wanted to join BJP later?
Vinod Rai: It's like this when you put out a report that is going to hit somebody you obviously expect a hit back at you there is no doubt about it. Because whoever is going to be hit is going defend his position. So we expected it & we were prepared for it also especially when we put out the 2G report which was the first one this list. But we ensured only one thing we were one sure ground, facts that we were putting were absolutely right. So obviously what faults were being found we were accepting them? The only thing that hurt me in person was some personal remarks which were being made which could have been avoided because the CAG has his job & you have no other person that Venkatraman saying this Pranab Mukherjee saying this & he came to the office & said that your job is to find fault with the present Govt, so why should they be making a personal attack
Arnab Goswami: May I say this I don't say this often I am not in the game of paying any compliments on camera. But please don't take my questions as an attempt to grill you sir. You are not the villain, the villains are out there & we all know who they are so please doing not take this otherwise in the course of this conversation. I would however want to know whether you were disappointed that the PM of India did not defend you. When you speak I find that you are very sincere about your job & very serious about the office that you held. He in fact chided the office of CAG public. I mean page number 66 you recount that part with fair amount of bitterness don't you. Where he said 29 June, 2011 he accused you of leaking stories. He said "I think CAG also leaks & it is not the function of the CAG & it has never been that the CAG has held press conferences like the present CAG has done. But nobody is commenting on this. It is not right for the CAG to go into issues which are not the concern of the CAG. It is not the business of CAG to comment on policy issues. They should limit themselves to mandate given under the constitution, we are a permissive society if the media can get away with murder so can the CAG. He was chiding your office not just you personally
Vinod Rai: I wish he had told me this personally he had not. He spoke to media on this we were certainly very upset. I happened to be out of Delhi when he made these comments. I came back to Delhi & I got the transcripts from the PMO that they had put on the website & I had given a reply to PM & I didn't deem it fit for me to get into media space & talk about what the PM had said. So I made a point by point reply to the 3 observations he made pertain to the CAG & I said look you can even discuss this with me but in any of my discussions with him he never
Arnab Goswami; so you have met him
Vinod Rai: I have met him. In the letter itself I wrote that if you wish I am available at short time notice. Arnab Goswami: & he called you
Vinod Rai: He called me
Arnab Goswami: At short notice he called you
Vinod Rai: HE called me
Arnab Goswami: PMs don't give appointments at short notice he obviously wanted to meet you
Vinod Rai: In all fairness I must say that when a CAG seeks appointment he gets it. Like I got it
Arnab Goswami: You got it. Then what happened?
Vinod Rai: I had written a letter that had 3 points. The first one was which you have read out saying that this CAG hold media conferences that no CAG has done before. I pointed him out in my entire tenure & then I was half have during my tenure I never held a press conference & I said that its a fact. Number 2 he said that I transgressed my mandate. I explained him my mandate. My mandate is to conduct performance audit & it is cleared by parliament to that & performance audits go a step beyond finance audits also which is to see the efficiency of spending the money & it is my job to point these things out. I mentioned it very properly. Then the last point which I think is an unfair observation on CAG which you alluded to it earlier why should CAG leak his own report its like stealing your own thunder
Arnab Goswami: He accepted your points?
Vinod Rai: Of course he accepted. He listened to me & he was very accommodating
Arnab Goswami: Was he looking nervous? Was he concerned?
Vinod Rai: He certainly exceeded to the points that I was making because I had record to show him that we had media policy not today from but 1988
Arnab Goswami: Did you have any apprehensions?
Vinod Rai: No he didn't share any apprehensions. But he did ask me I hope you do not want a reply to this letter, I said well this is a prerogative issue
Arnab Goswami: Did he have any apprehensions about the political impact or otherwise
Vinod Rai: No none of these issues. Theses issues were of 2012 & he didn't mention any
Arnab Goswami: No personal conversation
Vinod Rai: no personal conversation in that meeting Arnab Goswami: He said nothing to you? You were at war with him
Vinod Rai: I was at war but I have said in my interactions with him he has always been gracious. If you say we were at war well the media made it like we were at war but I think we were totally following the mandate of any CAG which means without fear or favour. Just like Venkatraman has said, Dr Radhakrishnan had said
Arnab Goswami: Mr Rai let me move to Coalgate. Does the PM in your view, like you said that PM in 2G scam, does he bear the ultimate responsibility in the way the Coal scam unfolded. You have spoken of his inaction in the 2G case. Was the case same in Coal
Vinod Rai: Well in Coal the issue that arose in the year 2004 itself immediately after then coal secy Mr Parekh had pointed out that the process of allocation was leading to lobbying, pressure & what he called windfall games to the allot tees. This was brought to the notice of PM who is holding the portfolio at that time because then coal minister was not in govt. The PM is understood it
Arnab Goswami: Let's move 1 step back. I want to know who brought it to the notice of PM Vinod Rai: The Coal Secy Mr Parekh who had been secy for some time & he has written on paper saying that the screening committee process of allocating the coal mines is leading to pressures & lobbying & windfall games
Arnab Goswami: Parekh had written to the Govt way back if I am not mistaken in 2004
Vinod Rai: he wrote to his own minister
Arnab Goswami: Proposing the auction route
Vinod Rai: that was accepted by the PM on 1st of November that very year
Arnab Goswami: Then he wrote to the cabinet secy in March 22, 2005 about the coal mafia being inside the govt.
Vinod Rai: Ya that letter we dont have because it was not incidental to the audit report. But what we have picked up is that the minister wanted him to be removed & then in reply to the minister's letter he wrote all this but all this is not the part of the audit report.
Arnab Goswami: Was there a meeting between you & Manmohan singh at any point of time directly or indirectly in presence of any other where this issue was red flagged by you
Vinod Rai: No. See what happens is we give out audit report. The intention is not to be disruptive to the govt. The intention is only to introduce corrections in whatever is happened. So there is always if you shut a door you have to open a window. Govt functioning must continue if you have followed this process which is not accurate you can change the course. So when we prepare the draft report of this the draft report had all kind of findings in it. I did brief then finance minister about what was due to come in the report & I even apprised him of the correctives he should be taking at that time & the specific issue was that the mines had been allotted 57 of them to be precise but 56 of those mines which had been allotted after 2005 not even a single spade had been remnants to them which means people had got the mines but they had not started mining. Govt allotted these mines for the express purpose of boosting up power generation & power generation requires coal linkage, fuel linkage & that is why these mines were given. You cant take mines & keep sitting on them till 2012
Arnab Goswami: What did then Finance Minister do with your advice?
Vinod Rai: He said yes we must bring this to the notice of the PM & we did bring this to the notice of the PM that the draft report is out before the final report comes the Govt must take its notice.
Arnab Goswami: As in there was a meeting?
Vinod Rai: The finance minister & me
Arnab Goswami: Finance Minister & you met
Vinod Rai: We had a meeting with the PM
Arnab Goswami: Then Finance Minister & you had a meeting with the PM
Vinod Rai: Ya the PM was apprised by both of us
Arnab Goswami: Have you raveled this in your book?
Vinod Rai: We haven't talked about meetings
Arnab Goswami: But there was a meeting between you & the then PM Dr Manmohan Singh & the then Finance Minister I presume you are referring to the present President of India Pranab Mukherjee
Vinod Rai: Ya to indicate what were the findings of the draft
Arnab Goswami: When were these meetings?
Vinod Rai: This was at the stage of preparations of the draft report
Arnab Goswami: Around which time frame do you think?
Vinod Rai: I don't recall when the coal report was put out but it must have been before 2 months of the final report was tabled. Because we have a process in which we report the draft findings to Govt so that the Govt has to make any comments on it & we don't want to be factually incorrect. At that time we point out the draft findings & this discussion should have taken place around that time.
Arnab Goswami: So what did the PM do?
Vinod Rai: Well I don't know none of the advice that I gave or none of the suggestions that I made emanated from govt. The Govt just gave us a reply To whatever the things were & talked about are computations & said look legislative processes take a long time & so form 2004 to 2012 we haven't been doing & that is it. We incorporated all this
Arnab Goswami: Did you ever hear back. Did you have any conversation with anyone in that meeting either the then finance minister or the PM on what happened?
Vinod Rai: Well not really. We didn't get a hear back but evidently these issues must have been discussed among the cabinet colleagues & it must have been decided to go through with whatever
Arnab Goswami: What was the then Finance Minister's own view? Did he take what you said seriously?
Vinod Rai: Well yes .The finance minister, in fact I must say to the credit of then Finance Minister Mr Pranab Mukherjee that 2-3 issues that I brought to his notice he immediately took them up. Another issue notice that I brought to his notice was the amendments which the audit tax need to be taken & he acted upon it immediately
Arnab Goswami: So this is a strange situation we are getting in where the then Finance Minister takes what you say very seriously. He picks up on the issue & he & you go to Dr Manmohan Singh & you apprise him of all the issues & eventually we find a situation where it is the voice of people like Sri Prakash Jaiswal that prevails & not that of then Finance Minister Pranab Mukherjee. How could this have happened & after this happens, How sincere in your view ,now completely be honest be with me, was Manmohan Singh being & please do not prevaricate I know when you want to be polite you can be polite to a fault but its politeness on one side versus being frank on frankly speaking on one side. How sincere was PM when he gave himself a clean chit on Jan 3, 2014 saying that "I feel sad because I was the one & I kept insisting that the spectrum allocations should be transparent, fair & equitable & I was the one who insisted that the coal allocations should be done on the basis of auction? These facts are forgotten media plays In the hands of opposition & I will be proven right" How sincere was he being?
Vinod Rai: He was accurate to the extent that he said yes auctions should be the process of coal allotment but after having taking the decision in November 2004 why it took so much of time for this process to be introduced is any body's guess.
Arnab Goswami: what is your guess?
Vinod Rai: Well there were evidently people in Govt & outside Govt who did not want change in the process it was very cozy for them to continue with the process that was ongoing
Arnab Goswami: And he played along with them
Vinod Rai: Whether he played along with them or the issue really reached him or not I really can't say because the records do not show any of those things but yes the situation did not change & till very recently also the auction process has not commenced.
Arnab Goswami: Mr Rai, it appears to be that the constant theme of your book which is vocal on the issue of accountability is this. How accountable is Manmohan Singh for the misdemeanours of his subordinates? You have spoken about the 2G scam, you have spoken about the Coal scam,you know,which we discussed, but now also the CWG scam. Mr Rai, when the PMO confirmed that Suresh Kalmadi, and each of these facts are very important today because as our viewers are seeing this, they are recollecting what was happening in that period. You know and therefore it is your responsibilty to share. When the PMO confirmed that Suresh Kalmadi be chair of this organising committee, was it compliciting in allowing Kalmadi to subword the process of establishing his hold of the organising commiittee of the CWG? And with it the alleged corruption that came with it? Because you had red-flagged the CWG gates and what was happening sometime earlier?
Vinod Rai: See, the Common Wealth Games, before they were played out in India, were played out in Australia.
Arnab Goswami: Ya
Vinod Rai: We had a huge contingent of people, 139 if I remember correctly, who had gone much in advance to study how they had played it out in Australia. There they found that there was a minister mandated for the Common Wealth Games by an act of Parliament and whoever is given this .. .(Arnab Goswami interrupts)
Arnab Goswami: Sure
Vinod Rai: So, it was very much in the government domain that the Common wealth games were to be implemented. But in this particular case the argument trotted out was that it is the Indian Olympic Association which should be incharge..
Arnab Goswami: Headed by a Congress man?
Vinod Rai: Of?
Arnab Goswami: Called Suresh Kalmadi..
Vinod Rai: Indian Olympic Association Chairperson.
Arnab Goswami: President of the Indian Olympic Association.
Vinod Rai: Absolutely.
Arnab Goswami: Sports minister, government had no role in it?
Vinod Rai: They did not, infact the former, the then Late Sports Minster Mr Sunil Dutt wrote very strongly against it also.
Arnab Goswami: What did the Prime Minister do?
Vinod Rai: After that letter was received, I don't think any action was taken on it.
Arnab Goswami: So the Prime Minister did nothing there as well?
Vinod Rai: Well, that was far too early in the game.
Arnab Goswami: But had the Prime Minister intervened at that point of time? Had the Prime Minister intervened? Instead the Prime MInister as per your page number 125, you say, 'In December 2004, the PMO wrote to the Ministry of Sports that institutional arrangements had been evolved for the conduct of the games and Suresh Kalmadi should be the Chair of the organising committee and Executive Board. In other words, government money being spent...
Vinod Rai: By a body which is not accountable
Arnab Goswami: By a body that is not accountable to the government. Only perhaps in some indirect way accountable to the Congress party. Because the President of the IOA was a Congress man.
Vinod Rai: It was in form and substance both, incorrect.
Arnab Goswami: The Prime mInister could have, Mr Rai..don't hold your self.The Prime minister could have stopped the Common Wealth Game scam from happening by introducing systems of accountability atleast in the large spents that were happening at that time, but he did not. He was simply acting as a post man.
Vinod Rai: Well, systems of accountability have played out even in that setup. But unfortunately what happened was the games got into a huge mess before they actually...(Arnab Goswami interrupts)
Arnab Goswami: Sir, Suresh Kalmadi's position was strengthened by the Prime Minister of India Dr. Manmohan Singh in 2004, five to six months after the general elections. I am only going by what is in your book and you end that paragraph by saying, 'after this Suresh Kalmadi had arrived.'
Vinod Rai: Absolutely accurate. Because after that, when the Prime Minister wrote, the PMO wrote to the Sports Ministry saying this will be the formulation of the Committee, it was totally within Suresh Kalmadi or the President of the IOA to control the entire Common Wealth Games. And he did infact control it entirely.
Arnab Goswami: So the Prime Minister of India certified an unaccountable structure to spend huge amount of taxpayers money.
Vinod Rai: That's why I said, in form and substance both, it was incorrect.
Arnab Goswami: So the Prime Minster should have not done that?
Vinod Rai: Well, its very difficult for me... (Arnab Goswami interrupts)
Arnab Goswami: If the Prime Minister had applied his mind at that time and seen through the consequences..
Vinod Rai: See, we had the example of the Asian Games earlier. Asian Games if you recall were.... Mr Boota Singh was then actually made incharge of the Asian Games and he was a sitting minister. There could have been a role for the Indian Olympic Association but under the overall charge of a minister. Because a minister can be better accountable to Parliament and to the...(Arnab Goswami interrupts)
Arnab Goswami: So the Prime Minister strengthened Suresh Kalmadi?
Vinod Rai: Well, the Prime Minister appointed him certainly so, certainly so.
Arnab Goswami: So the root cause of the CWG scam goes back to 2004.
Vinod Rai: If somebody in government, accountable to government, accountable to the Finance Ministry or accountable to the Parliament in the nature of being a minister had been there, certainly he could have been held far more accountable.
Arnab Goswami: How do you feel about this? The 2G scam, Coalgate and CWG scam, the some total of our conversation is that the Prime Minister of India could have done so much and chose to do nothing.
Vinod Rai: WelI I don't think..
Arnab Goswami: I think that's unforgivable.
Vinod Rai: No. I think we are laying too much of blame only on the Prime Minister because there are large number of functionaries who did not.......(Arnab Goswami interrupts)
Arnab Goswami: Show they are benefitted.
Vinod Rai: Ya.. No.They did not perform the role that the nation expected them to perform. They did not perform the role that their oath of allegiance they had taken to the constitution.
Arnab Goswami: What was the role of powerful bureaucrats? T K A Nair, Pulokh Chatterjee in the PMO at that time?
Vinod Rai: Powerful bureaucrats actually...See, when we conducted the audit, the files at the PMO were not made available to us. So what role they played we really don't know.
Arnab Goswami: Mr Rai, you are known for your reports on 2G, and Coal, and CWG but I find a very interesting excerpt on Civil Aviation. In the context of Air India's fleet acquisition policy, you write about a meeting on 2nd August 2004, 'In a draft audit report which had been sent by the CAG to the ministry for its comments, audit had views and expressions in the meeting, the minister nudged ...'
Vinod Rai: That's right
Arnab Goswami: nudged, emphasis applied, 'air India to revisit its proposal. The moment the draft audit comment was read in the ministry, all hell broke loose, bureaucrats of all hues, serving and retired including Air India officials started approaching us to drop the word. The funny part is that just about everyone dispatched to plead with us against the usage of the word nudge'..that is the civil aviation minister nudged Air India to revisit the proposal, 'almost everyone acknowledged that the meeting was infact the turning point where the minister nudged Air India.' Don't take 28 planes, take many more. Right?
Vinod Rai: Ya
Arnab Goswami: Spend a lot more money. So the minister was telling Air India, you may have plans for X number of planes but you may need 2X or 2 and a half X or 3 X. Right? So the minister was almost forcing, coercing Air India to spend a huge amount of money. Now, my question to you sir is, who is the minister?
Vinod Rai: See, the minister for civil aviation then was Mr Praful Patel. This meeting took place on 2nd August, and it took place in the cotext of the fact that the then CMD of Air India, I think it was Mr Thulasidas, he brought forth a proposal which had been approved by the Air India board to purchase 28 air crafts. Then, in that meeting it transpired that the minister said that you must have a longer term perspective.
Arnab Goswami: I won't understand how this were to happen. A board approves a decision to have 28 aircrafts.
Vinod Rai: That's exactly what we also felt because its the job of the board to keep their commercial antena up. Which root is more profitable, which should be non-stop, which air craft is better, which seat type is better is the job of ..(Arnab Goswami interrupts)
Arnab Goswami: How many planes did they finally buy?
Vinod Rai: They bought 68 of them.
Arnab Goswami: They wanted to take 28, they took 68 ... 40 more planes?
Vinod Rai: Because what happened was, then this meeting took a decision that they look at a longer term perspective. The CMD went back to his board, discussed it, the board sought a clarification which also I have mentioned in it (book), and that clarification was, 'what exactly?' So they said, 'look, you have to look at a longer term perspctive', which was clearly the government indicating Air India that look you must buy a larger number of aircrafts. Now, we found this strange.
Arnab Goswami: What kind of money that would involve?
Vinod Rai: Well, it was about 38,000 crores.
Arnab Goswami: Extra or?
Vinod Rai: Totally, totaly 38,000 crores. Ya, it went up from about 1000 million dollars to about 6000 million dollars, that's the way it went. And we found it strange becaue these proposals are always examined in the finance ministry and the finance ministry was not convinced about it but the finance ministry wrote that this is a supply side, supply driven proposal. Which means just because you have bought more aircraft doesn't mean that Air India is going to come out of the red but more damaging part of it was, 97 percent of this purchase amount was going to be debt. I don't think any airline can survive by such a huge debt. And then on the other side you were following open skies policy wherein all private aircraft, private airlines were allowed to fly but more damaging was the fact...(Arnab Goswami interrupts)
Arnab Goswami: Did you ask Mr Praful Patel? Did you meet him?
Vinod Rai: I have never met Mr Praful Patel, I have never met him.
Arnab Goswami: You feel there is a scam there?
Vinod Rai: Well, I don't know if there is a scam there but it's proven now that the aircraft which you bought within five years, they had to be sold. Which means that there was ... (Arnab Goswami interrupts)
Arnab Goswami: But there was an official ... You know this is very strange, Air India officials are pressurizing you to remove the word nudge.
Vinod Rai: Not Air India, more the government officials.
Arnab Goswami: Government officials, the civil ministry officials I presume were desperate to remove the word 'the minister nudged'
Vinod Rai: Yes, because ... (Arnab Goswami interrupts)
Arnab Goswami: So they were trying to downplay the influence of civil aviation minister Praful Patel?
Vinod Rai: Well, most certainly so, most certainly so, because the meeting says that they were asked to reconsider, they are advised to reconsider and we had read into that simple thing as 'a nudge.' And we took a decision to remove the word nudge because normaly audit follows a very structured formulation and nudge was not a word appearing in our documens.
Arnab Goswami: Who dispatched these people to plead with?
Vinod Rai: I don't know who dispatched them but they were meeting my officers more than meeting me at regular intervals.
Arnab Goswami: So all going around ... I mean the civil aviation ministry officials were going around requesting and pleading at any level?
Vinod Rai: At any level.
Arnab Goswami: Telling the CAG officials please remove the fact that the civil aviation minister Praful Patel nudged Air India to try and get more planes?
Vinod Rai: Exactly so, and I was quite surprised much much later when I read a book written by a retired executive director of Air India where he said it was not a nudge, he ordered. That seemed to bethe understanding of the officials in the ministry and Air India both, because the CMD went back to his board and this board which had deliberated on the purchase of 28 aircraft over 2 years, within 4 months came back ...
Arnab Goswami: In any conversation, did you mention this to the Prime Minister?
Vinod Rai: No, I didn't have any occasion to meet with the Prime Minister on this particular issue later ... No.
Arnab Goswami: Mr Rai, there's a question mark on your mind, isn't it?
Vinod Rai: No, I didn't
Arnab Goswami: There's a question mark in your mind on why this was happening at that time?
Vinod Rai: Well, I don' think so, I mean whether it was driven by any other factor we really don't know.
Arnab Goswami: The NCP was very powerful.Government was formed, NCP was a critical part, Praful Patel was the Civil aviation minister, his Arnab Goswami Sharad Pawar was extremely influential, part of all UPA coordination committee decisions.
Vinod Rai: May have been. I said this right in the beginning of this interview that this is a discussion that may have been in the compulsion of coalition politics.
Arnab Goswami: Mr Rai, all that you tell me today is an eye opener for those who worry about the state of this nation. And many people will thank you for sharing all these details. I want to talk about the personal price that you paid for it, you devout an entire chapter in your book to the CBI and an Investigation vis a vis Atul Kumar Rai that makes a mention of you. Let me ask you straight Mr Rai, were you victimised by the previous government for your audits? Was the CBI used as a tool against you to fix you? Was there an attempt to fix you directly or indirectly?
Vinod Rai: This was a very strange thing that happened. Nobody in the CBI has approached me but it was an email that I received from a journalist. He said that a preliminary enquiry has been registered against finance ministry officials in the context of the appointment of Mr Atul Rai and I have been named in it. Now, that took me totally by surprise so I rang up the CBI director then and the answer that I got was, 'Yes there is someting about Atul Rai but your name doesn't figure in it.' But in all fairness he immediately dispatched an officer to me with the preliminary enquiry information report and that report in the first or second line itself says that it is a source information indicates that when Atul Rai was working as a director in the finance ministry, Vinod Rai Rai was the secretary. Now, why should Vinod Rai Rai be mentioned?
Arnab Goswami: Why would it be mentioned?
Vinod Rai: Well, it goes on to say that Vinod Rai Rai facilitated the early release of Mr Atul Kumar Rai but more surprising part of it and where we found the report to be laughable was in the next para, it reproduces an extract to the file where my joint secretary has recorded that I have discussed with the secretary and the secretary says that Atul Kumar Rai cannot be released now because Parliament is in session, he can only be released when Parliament finishes and that will be on 31st May and this record is sometime in March April.
Arnab Goswami: Somebody was fishing for information against you?
Vinod Rai: Well, I don't know whether somebody was trying to fish information against me or not but somebody did feel that yes, this is one way to ... (Arnab Goswami interrupts)
Arnab Goswami: Were you affected? Was your family affected? Were you personally affected? Tell us about that.
Vinod Rai: By then much water had flown. This didn't..because I was very clear in my mind that there was nothing that they could find on record or otherwise in a way in which I could have facilitated this appointment. And ultimately it boils down to the fact that some Form 15 or something has not been properly filled up, that's about it all. For that a criminal investigative agency?
Arnab Goswami: Will you ever get into politics or take political office Mr Rai?
Vinod Rai: Well, I have not done it as yet, except I mean ... (Arnab Goswami interrupts)
Arnab Goswami Goswami: Have you been offered?
Vinod Rai: No, I have not been offered. Political people do keep meeting me all the time but I have not been offered and I don't think politics is my cup of tea as I have said earlier also that I 'll not get into politics.
Arnab Goswami: Why do you say that? You think good peopel should not join politics?
Vinod Rai: Well, there are a large number of good people in politics and wanting to join politics. But whether I am a good person or not I only say this is not my cup of tea. That's it.
Arnab Goswami: Well Mr Rai you have been very frank, you are polite but without doubt, those watching this interview will have one thing to say that you are a man of high integrity. For going through what you did, for putting out what you did at that point of time and for enduring all that you were called, you were called names and all, I think the country owes you a debt of gratitude. It's my honour to speak to you today.
Vinod Rai: Thank you very much, but please be assured that politeness didn't make us hold back anything that my department wanted to put into the report.
Arnab Goswami: I don't think so sir, I am convinced at it. Thank you very much.
Vinod Rai: Thank you very much, it was a pleasur
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