Daily News and Analysis, 2 May 2013

by Praful Bidwai

To the supporters of the Trinamool Congress led by the irascible West Bengal chief minister Mamata Banerjee, the Saradha scam is an acute embarrassment which comes just before her government completes two years in office. To its opponents, it is the TMC’s richly deserved nemesis, and a political opportunity to put the ruling party on the mat on the eve of the state’s panchayat elections.

The Communist Party of India-Marxist (CPM), in particular, probably senses in it a chance to reverse the massive setbacks it has suffered in the state since 2008 — without undertaking serious political-strategic rethinking or mobilising the public on a positive agenda.

There is little doubt that the scandal has badly singed the TMC. So close has been its identification with the Sudipta Sen-led Saradha group that large numbers of people in Bengal instinctively blame the party for being complicit in wiping out the hard-earned savings of an estimated four lakh individuals, many of them poor and lower middle-class, who had invested them in Saradha’s Ponzi schemes, and in rendering jobless thousands of the group’s employees, including journalists. This is the first time that Banerjee faces the anger of the rural population, her main electoral base, on this scale, across 19 districts.

The Saradha-TMC connections have been numerous and visible: through MP Kunal Ghosh’s key position as its media arm’s CEO (later, executive chairman), actress and Trinamool MP Satabdi Roy’s role as its brand ambassador, state sports and transport minister Madan Mitra’s close proximity to Sen, and above all, through the generous “donations” and gifts Sen showered upon the government, even as it turned a blind eye to his rackets and his reported violations of building regulations. No less serious was its ignoring of the state bankers’ warning of the rapid withdrawal of Rs12,000 crores in deposits from public-sector banks and post offices in favour of Saradha’s chits.

Sen was a reckless operator who didn’t hide his blatant partisanship of the TMC through his media, and didn’t even bother to cover his tracks. As his newspapers and TV channels bled, he stopped paying salaries, switched off his three cellphones, and vamoosed — until he was arrested in Kashmir. The very fact of the TMC’s close association with Sen is a black-mark against it, and will confirm the charge that it’s a lumpen, semi-criminalised party.

Yet, even if all of Sen’s assets are seized, it’s doubtful if they, supplemented by the paltry Rs500-crore fund being set up by the state, can compensate a small fraction of the investors’ loss, said to be Rs17,000crore. This is the Sanchayita scandal of 1980 all over again — but this time with the active connivance of the state government, and inaction on the part of the Securities and Exchange Board of India (which didn’t exist then). Sen claims he paid Rs80 lakhs in monthly bribes to SEBI. This may or may not be true, but needs to be investigated.

This raises serious questions about the media-business-politics relationship and India’s failure to regulate it. Evidently, the existing entry barrier for setting up TV news channels, recently raised from Rs3crore-Rs20crore, isn’t high enough to deter fly-by-night operators. Cross-media ownership remains rampant, and malpractices like predatory pricing and “paid news” flourish. Big Business, as well as dodgy venture funds, are entering the media, leading to anti-competitive concentration and market dominance, and loss of media integrity and independence.

The author is a writer, columnist and professor at the Council for Social Development, Delhi.