Fraud and Fraud
On the Bengali New Year's
day, Bengal's social life, particularly in the small towns and villages, was struck with a horror resembling an epidemic. Signs of it were already there when the depositors of the Sarada Group were not getting back their money after the expiry of the term. On the New Year's Day, the employees of a television channel owned by the Sarada Group broke out openly in tears and informed the public that they did not get their salaries for the preceding three months. Over the last twenty-five or thirty months or so, the Sarada Group had come to own nine newspapers or television channels, all of which now closed down one by one, throwing more than one thousand journalists and employees into destitution. Agents and depositors demonstrated in front of the house of the Chief Minster and Trinamul Congress headquarters, and the news of suicides by pauperized persons poured in everyday, and the procession of death continues. The owner of the Sarada Group, Sudipta Sen, 'took to flight' and the West Bengal Police, in a manner characteristic of the script of a Hindi film, arrested him in Kashmir. There are reasons to believe that filing of a case by Arpita Ghosh, a person of the world of Bengali drama known for her proximity to the ruling party, the flight of Sudipta Sen, his arrest and continuous interrogation are parts of a plan designed by Sudipa Sen and some persons in the ruling circle.
Sudipta Sen had reportedly purchased paintings drawn by Mamata Banerjee with millions of rupees, purchased a still born television channel from Subhaprasanna, an artist known to be close to the Chief Minister, paid Kunal Ghosh a 'salary' of Rs 1.5 millions per month, along with other facilities, made Satabdi Ray, a film actress and Trinamul MP, his 'brand ambassador', and appointed a fresh and inexperienced law graduate, as his legal adviser allegedly in order to please the persons in authority. Besides, newspapers owned by the Sarada Group, even before seeing the light of the day, were on the list of dailies to be subscribed by government libraries. All these facts have made it as clear as daylight that there was an identification of interest between the Sarada Group and the present government. A part of the billions of rupees raised by the Sarada Group by cheating people clearly found its way into the pockets of some political heavy-weights. After the explosion of the scam, the Chief Minister said that before the Bengali New Year's Day, she knew nothing. This is unbelievable. Satabdi Ray publicly thanked Sudipta Sen for appointing her the 'brand ambassador' of Sarada and said, "We all are members of the Sarada family." It is a fact that a large section of the leadership of the Trinamul Congress came to be such 'members'.
The popularity that this political outfit gained since the time of the panchayet polls of 2008 was used by the Sarada Group to gain the confidence of the people. This confidence is very much important for such business. Suppose a large part of the initial deposits, say 45 percent, is eaten away by agents (30 per cent), unscrupulous politicians and bribe-taking policemen and bureaucrats (10 to 15 percent). If the payable rate of interest on deposits is 30 percent, the concern has to earn profits at the rate of more than fifty percent on the invested money, which is patently an impossibility. So the only way for the concern is to collect deposits and depositors on a highly increasing scale. This may be feasible only if the potential depositors can be made to believe that their deposits would not be lost. It is not a fact that the memory of Sanchayita, the fraudulent financial concern of the early eighties of the last century, was forgotten. But when the people saw that a popular leader like Mamata Banerjee and her trusted lieutenants were associated with a concern, the depositors believed that their money would not be lost. Many of them deposited the savings accumulated during the whole of their lives and they are now pauperized. The procession of death continues to lengthen. From this viewpoint, the Left Front Government that was in power till 2011 can by no means be given a clean chit. It is indeed true that the Left Front Government, in 2003 and then in 2009, made an attempt to control such companies, and this is also true that the Central Government did not give its consent. But what did the Left Front Government do thereafter? In the 1980s, the Left Front Government passed the second amendment to the Land Reforms Act and a statewide movement was launched in protest against the Central Government's dilatory tactics. Had the Left Front Government did something similar in 2003 for forcing the Central Government to give its approval, the people would at least have been conscious of such concerns and thought twice before depositing their money with them. The Left Front Government preferred to sit silent on this matter. On the other hand Biman Bose, the Chairman of the Left Front was seen at the wedding ceremony of the son of a person who had earlier served prison terms for fraud and with the money collected by cheating many persons, opened a concern named MPS. Biman Basu's self-defence is the specious argument that marriage is a social occasion and they have to attend them owing to social compulsion. It is difficult to believe that persons like Biman Bose did not understand that inviting leaders, ministers and bureaucrats to such so-called social gatherings is only a cloak put on to earn the confidence of people with the ulterior motive of cheating them. In reality, the Left Front and its principal constituent, the CPI(M), began to think ideologically that these chit funds were an ally in the work of West Bengal's 'development'. Otherwise, they could have taken action against these concerns in 2007-08. It is not true that the state government has no legal power. How could Asok Mitra take action against Sanchayita?
The Congress leaders of West Bengal have raised a hullabaloo about the chit funds, and laid the blame on the previous Left Front and the present Trinamul Government. But the way the role of the public sector has been curtailed and the financial sector has been left to the mercy of the plunderers ever since the inauguration of the New Economic Policy very naturally has increased the scope of such chit funds and other fraudulent methods of money-making. The orientation of banking service has been altered, and it is being said that every branch must make profits independently. The consequence is a decline of the access of the rural population to the banking sector. Secondly, the Central Government has decreased the rate of interest on the small-savings schemes and reduced the commissions of agents to an insignificant level, thus severely damaging these schemes. This is an ideal situation for such non-banking financial concerns to attract persons by offering lucrative rates of interest, or land and flats. They have gained the confidence of the people by involving political leaders and ministers in this process.
A third reason is the extreme unemployment problem among the educated young men. The severity of the problem can be measured by the fact that in this year's examination for the recruitment of primary teachers, 4.5 million candidates appeared for 35 thousand posts. Many such unemployed young men have been acting as agents of such concerns just for survival. These agents belong to rural and mofussil areas and are familiar figures in their respective localities. They have used this familiarity to persuade the people to deposit their money with the chit funds. Now, it is possible for persons like Sudipta Sen to appropriate billions of rupees and go into hiding, but agents, having no such scope, have to live in their localities and face the mounting pressure from depositors. Unable to withstand this pressure, many have found salvation in suicide.
The demand for banning the activities of chit funds has been raised from many quarters. Similarly, demand has been raised for confiscating the movable and immovable properties of the chit fund-owners, recovering the money from the leaders-ministers -bureaucrats -police officers bribed by these concerns and to repay the depositors with the money thus obtained. There is no indication that the present government of West Bengal is at all interested in it, and instead it is all out to save the leaders and ministers belonging to the ruling party. Hence the demand for CBI investigation under judicial supervision, which is justified in the sense that the activities and investments of the Sarada Group are spread over several states, and are not limited to West Bengal only. But whatever be the nature of investigation, the possibility that the common depositors will get back their money is extremely remote. It is also unlikely that the Central Government will formulate a law banning the chit funds, because in some states of south India such money has been invested productively and has played a little positive role.
Time has come to think seriously about how local savings can play a positive role in the rural economy. If the state sector banks open branches so as to take such services within two or three kilometers of the homes of the entire rural population, the poorer sections can deposit their hard-earned savings with the banks. But there is no guarantee that such savings will be locally invested or such investments will be oriented towards the welfare of the majority. At present, the credit deposit ratio in rural areas, or for that matter in West Bengal as a whole is very low. There are a number of reasons for this phenomenon, which requires separate discussions. But under the present circumstances, there is no guarantee that opening branches in rural areas would lead to local productive investment of accumulated deposits. Besides, there is the possibility of use of such money in speculative trade, buying cheap and selling dear.
It would be the best solution if the savers could exercise control over their savings. If the village people form self-help groups, keep their savings in a common pool, deposit it with the local bank, and if the bank, in turn, extends credit to the groups against these deposits for some productive schemes, it may become helpful to the people. In fact, such a system is there in the country, and the NABARD is a credit-giving agency. But the experience of such self-help groups in West Bengal is not good, because there are many problems, including the problem of opening bank accounts and that of political leadership.
As a matter of fact, there has been no cooperative movement worth the name in West Bengal or anywhere else in the country. The progress of land reforms in West Bengal in the seventies and eighties of the last century created an environment for building up a cooperative movement. Where the benefited peasants were small and middle, large investments were not individually possible. Had these peasants formed cooperatives and the state granted them easy credit and other facilities, these cooperatives could have served as vehicles of rural development. A few village cooperatives could have formed a bank, which could function in collaboration with public sector banks.
But successful implementation of such steps would require far-reaching changes in the political and economic system of the country. The policies pursued by the state have led to continuing concentration of wealth in the hands of big capitalists and bureaucrats. This orientation is not to change unless the Indian people can build up a political system favourable to them. o
[Translated from Bengali by Anirban Biswas, originally published in the magazine—Sramajibi Bhasa]
Vol. 46, No. 1, Jul 14- 20, 2013
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