BOOK EXTRACT Mrs. G, Maneka and the Anands

Sunday, February 10, 2002

I HAVE Maneka’s version, corroborated by her mother. Maneka first met Sanjay Gandhi on 14 December 1973 at a cocktail party given by her uncle Major-General Kapur (the husband of Maneka’s father’s sister, a renowned beauty of her time) to celebrate their son Veenu Kapur’s forthcoming marriage. Sanjay, being a school friend of Veenu, was present. It also happened to be Sanjay’s birthday. He was in high spirits (not alcoholic, as he never touched liquor). He was the most sought-after bachelor in India: handsome, a son of the Prime Minister, grandson of Jawaharlal and great grandson of Motilal Nehru. He was engaged in trying to make himself into an automobile manufacturer. He was known to have an eye for pretty girls but carefully avoided getting entangled with those he suspected ‘fell’ for him with designs of becoming members of India’s first family. Maneka was then seventeen years old: a lanky, freckled lass, attractive enough to have won a college beauty contest and modelled for a firm of towel manufacturers. She was, and is, highly photogenic.

It would appear that at this first meeting Sanjay was drawn towards Maneka. He spent the evening talking to her. The two agreed to meet the next day — and perhaps regularly. Amteshwar was quick to sense Sanjay’s liking for her daughter. Although she said she was alarmed at the prospect of having Sanjay as a son-in-law, I am pretty certain that she saw in this relationship a partial fulfilment of her own life’s ambition to become a somebody.

Thereafter, Sanjay and Maneka saw each other every day. Sanjay was not a restaurant- or picture-going young man and shy of being seen in public where he would be recognised; he preferred to see Maneka either in her home or bring her to his own. Early in 1974 he invited Maneka to a meal.Maneka was understandably nervous of meeting the Prime Minister and, when she did, she did not know what to say. It was Mrs Gandhi who broke the ice. ‘Since Sanjay has not introduced us, you better tell me what your name is and what you do,’ she said.

Truth Love & a Little MaliceMrs Gandhi had no reason to try and size up Maneka. Sanjay had brought home different girls at different times. She had never on her own introduced her son to anyone she thought would make a suitable daughter-in-law. As with her elder son, she was willing to leave the choice of the proper wife to her son.

Amteshwar Anand claims that she did her best to discourage her daughter from entering into what she felt would be a misalliance, and she sent Maneka away to Bhopal to spend some days with her grandmother, Lady Datar Singh. In July 1974 Maneka returned from Bhopal. On the 29th of the same month a formal engagement ceremony took place in the Prime Minister’s house at 1, Safdarjung Road, followed by a lunch where members of both families were present. Mrs Gandhi gave her daughter-in-law-to-be a gold and turquoise set and a Tanchoi saree. A month later on Maneka’s birthday (26 August 1974) she gave her an Italian silk sari.

Soon after, Sanjay had to undergo a hernia operation. After attending college in the morning, Maneka spent her afternoons and evenings with her fiance in the private ward of the All India Institute of Medical Sciences. A few weeks after his discharge from hospital and convalescence, Sanjay and Maneka were married through a civil ceremony(on 23 September 1974) at the house of Mohammad Yunus. Mrs Gandhi was generous in the wedding presents she gave her new daughter-in-law: twenty-one expensive sarees, two sets of gold jewellery, a lehnga, and perhaps the most precious of all, a khadi sari made out of yarn spun by her father Jawaharlal Nehru when he was in jail. Mrs Gandhi welcomed Maneka as a traditional Indian mother-in-law would welcome her bahu: she did up the bedroom, arranged artifacts on the dressing table and chose bangles Maneka would wear on the night following her wedding.

It was clear to everyone that Maneka’s days in No 1, Safdarjung Road were numbered. The only speculation was how and when she would leave. Mrs Gandhi, who had never known matters to be decided by anyone except herself, was in for a nasty surprise. Once having decided to part company with her mother-in-law, Maneka decided that this time she would determine the terms and time of her departure. She told me several weeks ahead of the exact day on which she would be ‘thrown out’.

Maneka chose the time very carefully. Mrs Gandhi was in London for the India Festival and had taken Sonia with her. Rajiv was too involved in building himself up and avoided being at home to spare himself meeting Maneka at meals.

Maneka and Akbar Ahmed decided to launch the Sanjay Vichar Manch. Mrs Gandhi did not know how to express her disapproval of an organisation professing to propagate her son’s ideals. The text of Maneka’s speech at the inaugural function (which Maneka claims had been approved byMrs Gandhi) was telegraphed to London by Rajiv. Mrs Gandhi decided she had got the opportunity she had waited for all these months to get rid of her turbulent daughter-in-law.

Mrs Gandhi returned fromLondon on the morning of 28 March 1984 — determined to call the shots.When Maneka came to greet her, she dismissed her curtly: ‘I will speak to you later.’ Word was sent to her that she was not expected to join the family for lunch and the food would be sent to her in her room. About 1 p.m another message was sent to her that the Prime Minister would like to see her. Maneka was prepared for a dressing down. She was in the sitting room when Mrs Gandhi walked in barefoot. She ordered Dhawan and Dhirendra Brahmachari to come in as witnesses to what she had to say to Maneka. According to Maneka she was fuming with rage and was barely comprehensible as she screamed, wagging her finger at Maneka. ‘You will get out of this house immediately.’ Maneka assumed an air of innocence and asked, ‘Why? What have I done?’ Mrs Gandhi screamed back, ‘I heard every word of the speech you made!’ Maneka added, ‘It was cleared by you.’ This caused another outburst. Mrs Gandhi accused her of disobeying her wishes, and for good measure added, ‘There was venom in every word you spoke. Get out this minute. Get out!’ she shrieked. ‘The car has been ordered to take you to your mother’s house.’Maneka stood her ground.She did not want to go to her mother’s house and needed time to pack. ‘You will go where you are told. Your things will be sent to you later,’ said Mrs Gandhi and again used strong words for Amteshwar. Maneka started sobbing and left for her room shouting back that she would not allow her mother to be insulted. Mrs Gandhi followed her barefooted on the gravel road shouting within the hearing of the staff and sentries outside; ‘Get out! Get out!’ Meanwhile, Feroze Varun had been taken to Mrs Gandhi’s room.

Maneka’s friends got busy spreading the word round to the press. Before going to the Prime Minister’s house Ambika rang me up to tell me what was happening to her sister and to spread the information. By 9 pm a crowd of photographers and reporters, including foreign correspondents, began assembling outside the gates. Mrs Gandhi always had a healthy dread and hatred of the foreign press. The police, which had been amassed at different points of approach to the house, had not been fully briefed about whom to stop and whom to let through.

Ten minutes later Ambika and her brother arrived at the house. For the first time in eight years they were stopped. Word of their arrival was sent to Mrs Gandhi and she was told that Ambika was talking to the pressmen. Their car was allowed to enter and the two went into Maneka’s room.They found Maneka in tears, trying to put whatever she could into her trunks. Mrs Gandhi suddenly walked in and ordered Maneka to leave without taking anything. Ambika spoke out, ‘She won’t leave, it is her house.’ Mrs Gandhi’s dislike of Ambika was tinged with fear of the girl’s sharp tongue. ‘This is not her house,’ shouted Mrs Gandhi, ‘this is the house of the Prime Minister of India. She cannot bring people here without my permission. In any case, Ambika Anand, I don’t want to speak to you’. Ambika was not the one to be cowed down. ‘You have no right to speak to my sister like this. This is Sanjay’s house and she is Sanjay’s wife. So it is her house. No one can order her out of it.’ Mrs Gandhi began to fumble for words and to cry. ‘I did not tell her to get out; she is leaving on her own,’ she said at one stage. ‘I have never told a lie in my life,’ she protested. ‘You have never told the truth in your life,’ retaliated the two sisters now emboldened by each other’s presence.The fight went out of Mrs Gandhi; she began to cry hysterically and had to be escorted out of the room by Dhirendra Brahmachari. Thereafter, messages had to be conveyed through the hapless Dhawan who received his share of tongue-lashing from the two girls — as well as being rewarded for his pains by being bitten by Maneka’s Irish Wolfhound Sheba, who had been upset by the excitement.

Left to themselves, the two sisters planned their strategy and time-schedule for departure. They ordered lunch and watched a film starring Amitabh Bachhan on their VCR at full blast so that Mrs Gandhi who was in the neighbouring room could know they did not give a damn. Every time Dhawan came in to plead with them to leave, they presented him with a new demand. The dogs had to be fed. The dogs were fed. When Dhawan failed to dissuade the girls from taking away anything, Mrs Gandhi came in with Brahmachari to order a search of everything they had packed.Maneka insisted that if there was going to be a search of her belongings it would take place on the road for all the press to see. The trunks outside the room were deliberately opened for pressmen to see and photograph by cameras outside the gate fitted with telescopic lenses. Another round of accusations and counter-accusations followed.

By now Mrs Gandhi was no longer mistress of the situation. Rajiv accompanied by Arun Nehru took over. They summoned the security officer, N.K. Singh, and ordered him to throw out the two sisters. Being a shrewd man, N.K. Singh asked for the order to be put in writing. Neither Rajiv nor Arun Nehru would commit themselves on paper. Verbal requests by N.K. Singh were turned down by the girls who wanted their luggage, dogs, and now also Feroze Varun who had a fever, to be sent ahead of them. Mrs Gandhi knew she had been beaten and gave in down the line.

The girls and their brother took their time eating a sumptuous lunch. The luggage and the dogs were sent ahead in a taxi. A very sleepy Feroze Varun was handed over to them at 11 p.m. Instead of a taxi, the Prime Minister’s car was ordered to take Maneka and her son wherever she wanted to go. The last thing Mrs Gandhi did, as was her habit, was to dictate a letter to Maneka spelling out her misdeeds which had made her expulsion necessary. Maneka sat down and wrote her reply which she released to the press. A few minutes after 11 p.m, a very tearful Maneka, bearing a bleary-eyed and bewildered Feroze Varun, came out of the room to explosions of press-camera flash-bulbs. Maneka had won this round against the Prime Minister of India with a knock-out.

My close relationship with Amtesh and Maneka came to an abrupt end a few months later. A journal had interviewed me about some allegations levelled at Maneka. My comments obviously displeased her because a couple of days later, she stormed into my apartment and flung a copy of the magazine in my face and stormed out. An hour later I received a registered AD letter from Amtesh accusing me of telling lies about the family. My association with the Gandhis and the Anands had ended. I heaved a sigh of relief. Another chapter in my life was over.

From Truth Love & a Little Malice, an autobiography by Khushwant Singh, Viking/Ravi Dayal, Pages 432, Price Rs. 450

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Rendezvous with Maneka Gandhi Part 1 & 2

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How much money will India government get due to the demonetization step of 500/1000 notes?

Ashish Dalela, works at Cisco

At any given point in time the RBI knows how much currency is in circulation because it printed the currency in the first place. If the RBI withdraws that currency, then whether or not people return the notes to the bank, the RBI can print the same amount of money. The govt / RBI don’t need you to deposit the money into the bank; whether or not you deposit, the money is already renewed.

This action is being advertised as a patriotic act of fighting against corruption and black money. The truth underlying it is quite different. The driver for this act is the huge number of bank loan defaults that have occurred. Remember the US economic crisis of 2007 where the borrowers could not return the loans? India is in a similar situation with one big difference: the defaults are largely by the rich and powerful.

Since most banks are nationalized, the govt can pursue their recovery. Which private bank has billions in default, a handful of big borrowers, and doing nothing about it? Yes, Indian nationalized banks are like that. They lend billions to big industrialists, which don’t return the money, and the bank is guaranteed by the govt.

When the bank runs out of money, then it increases interest rates. The result of that is everyone has a hard time finding money — ultimately this slows the economy.

To restart economy, govt typically prints more money — print paper currency to give out low interest loans. However, since the newly minted currency isn’t backed by a corresponding economic growth, there is more money for the same amount of assets, and hence the value of money relative to the assets decreases. This is called inflation.

Indian govt also wants to print money to start growth, so that it can give out low interest loans again. Guess who will get most of those loans? You guessed it right: the big borrowers you have already defaulted. However, to avoid the consequences of simply printing NEW money (inflation) Indian govt is cancelling old money and printing new notes as a replacement for the old money. In economic terms, this should not cause any economic inflation, because the total money remains the same, and the assets backing the money are also the same. Net-net, no change.

Except for one big problem: the people who defaulted on the previous loans have already converted that money into assets, parked it abroad, or invested in something that they are not going to tell you, unless you investigate them and put them behind bars. The really big borrowers are not keeping the money under their bed. They have already moved the money into different things long back. The money is already distributed to an extent that you can’t trace it back to the borrower. So, when you cancel the currency, the govt gets the money back, and the defaulter gets to keep the money he/she borrowed. In short you ate your cake and you have it too!

There will be few people who have kept the money under their beds, and they haven’t eaten their cakes, and now they don’t have the cake. But the biggest chunk of this money is not like that. The biggest chunk is the big borrowers from banks you have defaulted on loans. The govt banks don’t care because they got the money back. The rich defaulters don’t care because they never had to return it.

So, what really happens when the lender (govt banks) gets its money back, and the defaulter never returns it? It is the poor guys who were borrowing and paying interest diligently who bear the brunt. The money that the govt banks have on default today is 6,00,000 crores. This is the amount that will be recovered from the common man/woman — either through higher interest rates or through price rise.

We must note that RBI under Raghuram Rajan was not prepared to lower the interest rates. It was focused on retrieving the money from the defaulters before lowering the interest rates. GOI is pursuing the opposite agenda where you cancel the money, which allows you to print the money, WITHOUT going after the defaulters. If the defaulters have to pay, then the govt has done its job, and the common man/woman is not impacted. If the defaulters don’t pay, and the govt just cancels the currency, the loans that have defaulted have to be recovered somehow.

We have two kinds of alternatives now. First, we can treat the bad loans as “lost money” and the new currency is now considered devalued — i.e. rise in inflation. Second, we can treat the bad loans by the defaulter as the price to be paid by the common borrower through a higher interest rate over a period of time.

In either case, the common person loses due to the defaulting borrower. Either they pay more money for the same goods they were previously buying cheaper. Or, they pay higher interest rates for the money they were borrowing. If the interest rates don’t come down, then the whole point of demonetization will be moot, because banks will suddenly have lot of money but nobody is borrowing that money due to high interest rates. Since this is clearly undesirable, the banks will be asked to reduce interest rates. That leaves you with the next best alternative — i.e. inflation in prices.

Demonetization now becomes equivalent to printing more money out of thin air, because someone defaulted on the loans. The defaulter never returned the money, the govt printed the money, so effectively, the value of money is now reduced.

We may recall a similar situation in the US banks in 2007 when a lot of homeowners defaulted on their loans. The solution to that problem was govt driven bailout. The homeowners lost their homes, the banks got all the money from the govt (so they were largely not impacted) and the taxpayer bore the brunt of bad loan. The net result of that was a greater debt in the US govt, a greater budget deficit, and rising interest rates, all of which means that common people were worse off. They can’t borrow money to start a business, the govt therefore cannot collect taxes — and hence both govt and the common man are worse off — but the banks are laughing because they got all the bad loans from the govt, and the govt cannot get it back from the people.

The risk of the loan must ideally be passed to the borrower. In the case of US economic crisis of 2007, the risk of bad loans was passed to hapless investors who new knew nothing about the risks in the loan, and to the govt which bailed them out. Ultimately, small investors lost because their investment was gone; the homeowners lost because they lost their home; all tax payers had to pay more taxes OR suffer from price rise (inflation). The banks did not lose. In the case of India too, the risk of defaulted loans will also be passed to the common man. It so turns out that in the case of US, the borrowers were common people, and in the case of India the borrowers are super rich. In the case of US, the rich got their money back from the govt, and in the case of India, the rich get to keep the money they borrowed.

Who do you think is winning, and who is paying the price of that win?

The unfortunate part of this exercise is that it is being politicized as an action against black money by a patriotic govt, when real patriotism here means going after the loan defaulters, taking away their property, and forcing them to pay. But, of course, that won’t happen because the rich fund the political campaigns. The only difference between US economic crisis of 2007 and Demonetization in India in 2016 is that the role of banks has been taken over by the super rich borrowers. The similarity is that in both cases the rich kept the money, while the poor will pay the price for it.

Specifically, in the case of India, the defaulted loans will be recovered from the common man/woman who will be working harder to repay the rich guys defaulted loans. Since we are patriotic, we can do that for the nation .. can’t we?

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Why Indians should junk their Constitution which is a colonial vestige imposed by Nehru

1. I have been tweeting that the single biggest enemy of our country is the Constitution of India.

2. Indira Gandhi suspended the Constitution that did not mean our country suddenly turned into a rose garden.

3. It only meant that even that Constitution was not enough to put down the people and tyrannize them.

4. Indira’s Emergency was bitterly fought out & won by Indians but sadly they kept the tyrannical Constitution and the putrid Gandhism.

5. Why am I against this Constitution that also underwent cruel changes even when suspended. Secularism was added then.

6. I will high-light those parts of the Constitution that is destructive of our Dhaarmic society.

7. It allowed free hand for Abrahamic religions to convert Hindus to their religions and Hindu gurus were also politicised.

8. Castes were/are legalised, multiplied and subsidized under this constitution.

9. These castes take most powerful roopam of atrocious tyranny.

10. A caste leader emerges and he takes a powerful hold on the caste followings. It is abject slavery from which there is no escape.

11. The caste leader, no matter what religion he belongs to, is a leader for life. Caste leader is uncrowned prince!

12. These caste leaders become political leaders also. They head political parties. If they are small they combine.

13. Most black-money reside in the hands of these caste leaders who store them to be used at time of elections.

14. These black-monies are used to buy votes at the rate of 5000 for Assembly elections to 15 to 25 lacs for RS MP vote, President’s vote.

15. Black monies are used to pay for followers to attend meetings, demostrations, more riskier it is then more money is paid.

16. The caste leaders get elected to Assembly/Parliament using black money from where they recoup their investment in 100 times.

17. Most monies of politicians are never put out to any other productive circulation but simply stored mostly at home, sometimes abroad.

18. So most black-money in India dont contribute to a parellel economy.

19. The demonetization was essentially aimed at disarming opposition parties to handicap them during election time.

20. Those ‘black’ monies caught by ‘corrupt’ bureaucrats are aimed at settling some old scores. Remember India is corrupt!

21. Monies paid to bureaucrats are converted into purchase of land, luxury goods, gold and a good portion stashed away abroad.

22. The biggest loot first started by Nehru confiscating INA funds of Netaji.

23. Then there were loots of Maharajas’ they had stashed away in their palaces, forts etc. Indira was looter raider!

24. Their pension to Rajas were cancelled and they were made paupers. They were vilified of their role in fighting British or forgotton.

25. The unparelled loot of the country was carried out by Mafiosi & family to the tune of a trillion dollors.

26. They had even carried out murders of those who would speak about it example Sunanda Pushkar.

27. Hajpayee, LKA, Modi, Sakuni are the worst protectors of this gang of looters. It is unsavory to tell the reasons.

28. Every congressman who wormed his way to the top looted to the tune of lacs of crores. Veshti & family are big examples.

29. No politician was convicted except Lalu who is out on bail and he I am sure that his case wont be heard during his lifetime.

30. Every political party is caste oriented, if not it cannot exist.

31. Dr. Swamy’s JP did not represent any caste and many who came in did so with corrupt intentions so they had to be expelled.

32. Dr. Swamy couldn’t hold corrupt followers to any meaningful work, he couldn’t afford time to keep an eye on them all.

33. He was the one person who couldn’t hold on to a party which once ruled India because he was uncorrupt.

34. The slide and demise of JP was due to infighting between the corrupt and the uncorrupt, between Brahmins and non-Brahmins etc.

35. This had started from day one because it was a combo-party from both ends of the spectrum.

36. Dr.S could have still kept the JP without membership and be part of NDA at his own convenience but he did not.

37. He decided to become a BJP at the goading of RSS as the threat perception on him increased enormously.

38. So no caste then no party; no money then no party. See the root of Indian politics. Who wants to vote for them?

39. Constitution of India is the root of this gravest anamoly. Only a Dhaarmic revolution can change it.

40. We are inexorably heading to a devastating Mughalistan and eventual ruin by sticking to this constitutional democracy.

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Sunta hai Guru Gnaani Gnaani Gnaani

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MUST SEE VIDEO!!! Who is the REAL Barack Obama – The Liar Deceiver Puppet Satan

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GSTN: Caution Should be the Key Word

Pros and Cons of a private majority GSTN
FM said GSTN has private majority because it needs to do 3-4 billion transactions a month.

Goods and Services Tax [GST] is a broad-based, comprehensive, single indirect tax which will be levied concurrently on goods and services across India. It will replace most of the Central and State indirect taxes such as Value added Tax (VAT), Excise Duty. Service Tax, Central Sales Tax, Additional Customs Duty and Special Additional Duty of Customs. GST will be levied at every stage of the production and distribution chains by giving the benefit of Input Tax Credit (ITC) of the tax remitted at previous stages; thereby, treating the entire country as one market. Introduction of Goods and Services Tax (GST) in India is perceived to be the most ambitious initiative in the arena of indirect tax reform. It would change the Indian tax structure and pave the way for modernization of tax administration.

Already GST bill has been approved by both the houses of Parliament and getting approved by State assemblies. It needs fifty percent or 15 assemblies to approve for getting Presidential assent.

It is unfortunate that no discussion is taking place about this GSTN and it would be most appropriate if the Finance Ministry comes out with clarifications and also make GSTN a government company which can be audited by the CAG.

Acompany has been set up primarily to provide IT infrastructure and services to the Central and State Governments, tax payers and other stakeholders for implementation of the Goods and Services Tax (GST). Goods and Services Tax Network (GSTN) is a Section 25 (not for profit), non-Government, private limited company. It was incorporated on March 28, 2013. The Government of India holds 24.5% equity in GSTN and all States of the Indian Union, including NCT of Delhi and Pondicherry, and the Empowered Committee of State Finance Ministers (EC), together hold another 24.5%. Balance 51% equity is with non-Government financial institutions. The Authorised Capital of the company is Rs.10 crores ($1.5 million).

As politicians argue fiercely and persistently over the nitty-gritty of this long-awaited and ambitious indirect tax reform that promises to make India a common market, the organisation responsible for creating and managing the complex IT backbone that will make GST operational, the Goods and Services Tax Network(GSTN), has moved, without fanfare, into glitzy new headquarters at Worldmark I, part of a vast commercial multi-storey chain owned by Sunil Mittal-promoted Bharti Realty.

The 30,000 square foot space that GSTN occupies on the fourth floor couldn’t be a bigger contrast to its cramped quarters in Hotel Janpath in central Delhi, a temporary base of operations after it was incorporated in March 2013. There is little to suggest that this Section 25 (not-for-profit) company is a government organisation in which the Centre and states hold 24.5 per cent each (a clutch of banks and private sector institutions hold the rest).

With its carefully delineated spaces, clean lines and such stylish trimmings as jazzily coloured “breakout rooms”, a canteen where it is compulsory for all staffers, chairman downward, to eat, and a “ladies’ room” for expectant mothers to rest, this could readily be mistaken for the office of a Private Equity (PE)/ Venture Capital (VC) funded IT start-up run by a 30-something entrepreneur. The ambience is not accidental either. As GSTN Chairman Navin Kumar had told Business Standard a year ago, “The idea is to create an entity that is under the strategic control of the government but will have the flexibility of the private sector.”

As if to highlight the difference, a racy blue, red and green logo, created by the National Institute of Design, adorns a banner at the airy reception area and the visiting cards and stationery. These are only the outward signs of the solid, if low-profile, progress the organisation has made to get the IT infrastructure ready for when this long-delayed tax becomes a reality. A world away from the din of political rhetoric over rates, the shape of the law, minimum applicable thresholds and, most recently, the prospect of a 1 per cent inter-state tax, GSTN has made some robust progress.

Government has given GSTN Rs.320 crores ($47.88 million) for funding companies to purchase hardware needed for the system and are going to give some more money.”

Asked about the government’s initiative to connect products and SME customers with start-ups to GST platform, Prakash Kumar [CEO] said a few start-up companies have already begun to approach the government and suggest innovative ideas of developing applications to help them connect their products and SME customers to GST platform.

“A couple of start-ups came to me, and one of them I met was zapped by their innovation. Yes we need very innovative start-ups to add value to the GST platform. We need at least 10 to 12 such applications developed by start-ups,” he added.

Business Standard Article on GSTN.

It was the speech of Budget, 2010-11 when the then Finance Minister – Shri Pranab Mukherjee announced the setting up of a “Technical Advisory Group for Unique Projects” (TAGUP). TAGUP was set up under the chairmanship of Shri Nandan Nilekani for taking up the technological and system related issues in respect of five projects including GST. It was the report of TAGUP submitted in January, 2011 which suggested that the task of handling the IT related issues in respect of these five projects should be handed over to a class of institutions called “National Information Utilities” (NIU). It was also suggested that the NIU will be the reporting authority to government and it will further contract to vendors in market for specialized IT related services.

Later on, in July 2010, Shri Pranab Mukherjee, with the assent of the EC set up an Empowered Group on IT Infrastructure for GST (EG-IT) which was also headed by Shri Nandan Nilekani. It was a dedicated group which was entrusted the job to look into technological needs for implementing GST. It is worth mentioning here that TAGUP was responsible for making recommendations in respect of five projects already identified at the time of announcing budget, 2010-11 while EG-IT was responsible to work upon GST network only.

Based on the reports of these two groups, it was decided that:

  • NIU for GSTN should be incorporated as a non-government, not for profit (section 25), Private Limited Company registered under the Companies Act, 1956.
  • Government’s share in equity should be 49%; being 24.5% of Centre and 24.5% of State.
  • Total private ownership should be 51%.
  • No single private entity should hold more than 10% of equity.

Thus, basically, the GSTN is to be in the hands of the private sector with 51% of shares.

Objectives of GSTN

GSTN has been set-up with the following objectives to act as a pass through interface for dealers.

    • Integration of the common GST Portal with the existing tax administration systems of the Central/State governments and other stakeholders.
    • Provide common PAN based registration, enable returns filing and payment processing for all states on a shared platform.
    • Facilitation, implementation and set standards for providing services to the taxpayer through common GST portal State Governments and other stakeholders;
    • Build efficient and convenient interfaces between with tax payers to increase tax compliance;
    • Carry out research, study best practices and provide training to the stakeholders


      he select committee of Parliament [RajyaSabha] has suggested “The GSTN is the comprehensive back end infrastructure network for the management of tax data and reporting of the GST. The Committee noted that the

Non-Government shareholding in GSTN

      is dominated by private banks, and this is not desirable. It recommended that the Non-Government Institutional shareholding be limited to public sector banks and financial institutions.”
      The objections raised by the Committee are quite obvious and they simply cannot be ignored in the light of the fact that GSTN would be a database of almost every significant transaction being carried out in the economy. GSTN’s work is of strategic importance to the country and the firm would be a repository of a lot of sensitive data on business entities across the country.

Main Concerns

Everything relating to GSTN was not so agitating until it was revealed that 51% of the shareholding of GSTN would lie in the hands of private sector. The privatization of GSTN is more threatening as GSTN would be a storehouse of a large amount of critical information. Thus, a majority private shareholding of such company means the critical information of about 6 million taxpayers is in the hands of private players. GSTN has been incorporated as a not-for- profit Section 25 Company. It is a well-known fact that private sector works only for profit. It is quite unusual for a private sector entity to invest for public welfare. This very fact induces a serious question as to why is private sector investing in a not-for-profit Company? Certainly, some kinds of incentives or interests must be associated with the investment. And when it is clearly evident that no monetary benefit is going to emerge out of it, it would not be wrong to assume the presence of some bigger non-monetary incentives. Or rather, it can be said that the availability of such critical data relating to the taxpayers itself is the biggest advantage associated with it. This threat alone is the major cause of concern for people arguing against the privatization of GSTN. Going by the above arguments, it can be safely opined that such critical information relating to taxpayers must not be given in the hands of such private entities.

The taxation system of any country is always considered to be the safest when it is under control of the state. Handing over the control of such sensitive data in the hands of the private sector is itself the biggest threat to the economy. How shall the government ensure the economic security of nation if such data is misused by the private entities to get benefit out of it?

At this stage, it must be noted that concerns had been raised even by the Central Board of Excise and Customs (CBEC) regarding ownership and security of such sensitive and confidential data in the dominion of private sector owned GSTN but it was later decided not to question the decision of the empowered committee. This concern was not considered before proceeding with the registration of GSTN, ignoring the fact that CBEC is the most important stakeholder in this transitive tax revolution. What induces more questions is that GSTN, being a private company, shall be out of the ambit of the office of The Comptroller and Auditor General (CAG). Considering the above arguments, it would not be wrong to question the security and confidentiality of the critical taxpayers’ database.

…mechanisms to avoid conflicts of interest as well as sacrificing interests of the State for the benefit of a few.

What could be the possible reasons behind private equity in GSTN? Is it indicating the government’s inability to efficiently manage the biggest tax revolution of the nation? Is the government trying to shed off its responsibilities? Why does the government want to keep GSTN out of the ambit of CAG?

The current proposed structure of GSTN is based upon the recommendations of TAGUP and EG-IT which had given their reports after a number of rounds of discussions.

The Empowered Committee (EC) has suggested that concerns regarding the data security should be addressed by incorporating related provisions in the Articles of Association of the company entrusted with GSTN. EC has also clarified that the Chairman of GSTN would be appointed by the Government. Also, as stated earlier, no single private entity will own more than 10% of equity while Centre and State will own 24.5% equity each. Thus, ultimate control will vest with government anyways. Further, a monitoring committee headed by Revenue Secretary was also proposed to be constituted to review the working of GSTN.

The EC also stated that the GSTN will be bound to follow the internationally accepted security and safety measures of protecting the data leakage. Also, it was proposed to appoint a Chief Information Security officer on deputation by Government to look into the matters related to information security. EC also clarified that the audits of GSTN would be conducted by independent auditors, including the professional personnel designated for carrying out technology reviews and giving suggestions thereupon.

The above stated justifications were given by EC in respect of information protection mechanism while finalizing the model of GSTN. However, these are the least discussed in the relevant fora.

From that point of view the concerns of Dr Swamy seem justified.

BJP leader Subramanian Swamy on Thursday urged Prime Minister Narendra Modi to bring full Government control in the company called GSTN, formed by UPA Government with 51 percentage private participation to manage the administration of Goods and Services Tax (GST). In a letter to Modi, the BJP leader said it was not advisable to bring private firms in the administration of tax-related matters.

Goods and Services Tax Network (GSTN) was formed as a Section 25 company in March 2013 with Centre and States having 49 per cent. Rest 51 per cent of shares were controlled by private banks and National Stock Exchanges’ subsidiary company. Ten percent of shares each were held by HDFC Bank, ICICI Bank, HDFC Ltd and NSE Strategic Investment Corporation. Eleven percent shares are held by LIC Housing Finance Limited, where Bank of Muscat and Abu Dhabi Investment Corporation also have shares, said Swamy.

“Being a Section 25 company, GSTN is a not-for-profit organisation. Then why private profit making entities have any stake, and that too majority stake in it? What is in it for them? Implementing GST scheme requires Constitutional Amendments and then only the GST administration and tax Management Company would be by GSTN. All the data management for computation of tax share, will be by GSTN,” said Swamy arguing that the programming work and electronic management should be handled by Government itself.

“Tax administration is a matter that deals with sensitive private information. Being such a large shareholder, this automatically means that HDFC and ICICI will be the bankers of public money collected through taxes,” he said, citing a recent transfer of Rs.4,000 crores ($600 million) by GSTN to develop software.
The Pioneer



      t might be worthwhile to put together a policy/ guideline paper on appropriate vs inappropriate engagement with government projects or initiatives including the rules for conflict of interest. Right now, very few seem to know where the actual lines are. So it ends up being a free for all.
      If I recall correctly Sam Pitroda during his tenure at CDOT/ Telecom etc. staffed hordes of companies with relatives and then collected government contracts. Similar is the case with a large number of World Bank assigned projects with the Finance Ministry—which are contracted to small companies floated by parties having insider knowledge. But the average person has no idea where the lines were crossed and where they weren’t. Short of a getting a law degree oneself, I can’t even see how the average person is supposed to know where the lines are.
      I think it would be a huge social service to tell the nation a-priori what the lines are as opposed to retrospectively establishing them by precedent or worse a letter of indulgence from a higher power.
      It is unfortunate that no discussion is taking place about this GSTN and it would be most appropriate if the Finance Ministry comes out with clarifications and also make GSTN a government company which can be audited by the CAG.
      This sums up mechanisms to avoid conflicts of interest as well as sacrificing interests of the State for the benefit of a few.


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R Vaidyanathan

An expert in Finance and a two times Fulbright Scholar, Prof. R Vaidyanathan is a much sought after author, speaker and TV commentator on all items related to Money and Finance.
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