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INDIAN AIR FORCE RIVER LINKING SHAH RUKH KHAN Mid-flight Crisis Why It Won’t Work Fifty and Restless NT ME www.indiatoday.in APRIL 25, 2016 `40 Y A P E R P UT O H WIT 9 7 7 0 2 5 4 8 3 9 9 0 9 ST O P O D T E S N E C LI 6 1 4- 1 5/ 0 D/ A B A D RI A 7; F 1 5- 1 8/ 8 C)- U( 7; 1 5- 1 8/ 6 0 6 1/ 1 D)- N L( D O. N D E R E ST GI E R FREE WITH YOUR DIGITAL EDITION RSS CHIEF APRIL 2016 APRIL 2016 APRIL 2016 APRIL 2016 A MONTHLY CITY MAGAZINE A MONTHLY CITY MAGAZINE SUMMER SPECIALMFCtrLlaenvObesfero aOiRrdtm ethaA yseo ahLunerda iF tnq itunIeHi rEcsitkoy Srtlsiep Tasn tAdo ANRNI No. DELENG / 2006 / 20557. Not for sale. To be circulated free with India Today in Mumbai, Delhi & NCR, Chennai, Bangalore and Kolkata. “Supplement to India Today issue dated April 25, 2016” BHAGWAA MONTHLY MTAGAZINEMTCHHEEAM ARBPAE SRPTSRA OOAJF E CT CHIC BANGALORE APARTMENT, RESTORING BIKANER HOUSE ETGTOOHS PT OFE ITCV HEGI PSAR LSWAUASCPETHMEEARAMSN PEK ATEUTROR’KS DIFAFRETRIESNTOSC EWF IHN COA T AHRHREE CTA MITIANYSKSICGTNAGSPE AE TA GHUIDEE T OH LUXIE GLIVIHNG IN L THIEF CIETYOXFCOORUDN GTORYLF C ALNUDB #RSSMakeover THE RSS 5 7 / MAKEOVER 7 8 5 8 2 O. N NI R The fountainhead of the Sangh Parivar undergoes a radical transformation, but contradictions persist (cid:79)(cid:80)(cid:69)(cid:78)(cid:32)(cid:84)(cid:79)(cid:32)(cid:79)(cid:80)(cid:73)(cid:78)(cid:73)(cid:79)(cid:78) DIGITAL EDITION FREE WITH YOUR INDIAN AIR FORCE RIVER LINKING SHAH RUKH KHAN Mid-flight Crisis Why It Won’t Work Fifty and Restless REGISTERED NO. DL(ND)-11/6068/15-17; U(C)-88/15-17; FARIDABAD/05/14-16 LICENSED TO POST WITHOUT PREPAYMENT w9w77w0.in2d5i4ato8d3a9y.9in0 9 APRIL 25, 2016 `40 DSUMMER SPECIAL IFCtrLlaenvObesfero aiRrdtm etGhaA yseo ahLunerda iF tnq itunIeAi rEcsPiRtkoyI LSrtl 2siep0 Ta1s6n tAdo IRNI No. DELENG / 2006 / 20557. Not for sale. To be circulated free Twith India Today in Mumbai, Delhi & NCR, Chennai, Bangalore and Kolkata. “Supplement to India Today issue dated April 25, 2016” ALA MON THLY MAGAAZMTCPIEHHENREAMEI ARBLPAA E2 SRP 0TMSRA1 OOAO6JF EN CTTHLY CITY MAGAZINEDITAPRIL 2016 A MONITHLY CITY MAGAOZINE NAPRIL 2016 THE GREAT RMSOSH CAHNI EBFH AGWAT EGTOOS PT OF ITCVHEI PSA LSAUCPMEMSE TEOR WASTHEARN PKAUR’KS OF CARHTAINSGTSE THE HIGH LIFE OXFCOORUDN GTORYLF C ALNUDB CHIC BANGALORE APARTMENT, RESTORING BIKANER HOUSE DIFAFRETRIESNTSC EW IHNO T AHREE C MITAYKSICNAGP AE A GUIDE TO LUXE LIVING IN THE CITY THE RSS RNI NO. 28587/75 MThe founAtainheKad of Ethe SaOngh PaVrivar uEndergRoes a radical transformation, but contradictions persist EXCLUSIVE MULTIMEDIA CONTENT ONLY FOR IPAD THE BIG STORY CRIMINAL NEGLECT NATION A DROUGHT OF RELIEF EXCLUSIVE POLITOONS BY INDIA TODAY GROUP SUBSCRIBE NOW www.indiatoday.in/digitalmagazines FROM THE EDITOR-IN-CHIEF For the last 70 years, the Rashtriya Swayamsevak Sangh (RSS), the foun- www.indiatoday.in tainhead of the Sangh Parivar, has been treated with some degree of wari- ness by most Indian governments for being a hardline Hindutva outfit out Editor-in-Chief: Aroon Purie of touch with the modern world. The RSS, on the other hand, has seen itself as a Group Chief Executive Officer: Ashish Bagga kind of moral force. Its goal has been to create a Hindu Rashtra and a new spiri- Group Editorial Director: Raj Chengappa tual order that will rejuvenate the “reservoir of knowledge” that went dry due Deputy Editors: Prachi Bhuchar, Damayanti Datta, Kunal Pradhan, S. Sahaya Ranjit, Sandeep Unnithan to the creation of an “artificial culture” over 400 years of Mughal and British rule. MUMBAI: M.G. Arun Senior Editors: Uday Mahurkar CHANDIGARH: Asit Jolly In 2000, while covering the RSS’s 75th year celebrations at a time when its AHsYsDoERcAiBaAtDe: E Admitaorrnsa: Ktha Kus. hMike nDoenk a, Shweta Punj own affiliate BJP was in power, INDIA TODAY had famously described the RSS’s JAIPUR: Rohit Parihar MUMBAI: Suhani Singh PATNA: Amitabh Srivastava policies as “a mix of cowdung capitalism and Hindu paranoia”. It was then an Assistant Editors: PUNE: Aditi S. Pai Correspondent: BEIJING: Ananth Krishnan organisation that was too pro-Swadeshi, pro-upper caste, anti-English, not Photo Department: Vikram Sharma (Deputy Photo Editor), open to gender equality, and obsessed with a version of history that wasn’t in Chandradeep Kumar, Yasbant Negi, Rajwant Rawat, M. Zhazo AHMEDABAD: Shailesh Raval KOLKATA: Subir Halder consonance with the spirit of the Independence movement. Right through, the MUMBAI: Mandar Deodhar Photo Researchers: Prabhakar Tiwari (Chief Photo Researcher), RSS seemed to have its own leaders, its own agenda, and its own set of priori- Shubhrojit Brahma, Satish Kaushik ties that were unnecessary for a newly formed developing country. Infographics and Illustrations: Saurabh Singh (Chief of Graphics) Art Department: Jyoti K. Singh (Art Director), Vikas Verma Now, almost a century after its creation and with its political arms at full Production Department: Harish Aggarwal (Chief of Production), Naveen Gupta, Vijay Sharma stretch in the Narendra Modi regime, the RSS is attempting to become more palatable. Though its goal may not have changed entirely, it is trying to be Group Business Head : Manoj Sharma Associate Publisher: Anil Fernandes (Impact) more in tune with the times. The last few weeks have been all about an RSS IMPACT TEAM makeover. Under Mohan Bhagwat as Sarsanghchalak, the RSS Senior General Manager: Jitendra Lad (West) General Managers: Arun Singh, Mayur Rastogi (North), is making alterations both to its attire and its approach. So Upendra Singh (Bangalore), Velu Balasubramaniam (Chennai) Deputy General Manager: Kaushiky Chakraborty (East) gone are the khaki shorts and in come the brown trousers. Sales and Operations: D.V.S. Rama Rao, Chief General Manager Deepak Bhatt, General Manager (National Sales) However, along with that, the RSS is also growing its net- Vipin Bagga, Deputy General Manager (Operations) work geographically, promoting backward leaders to key Manish Kumar Srivastava, Regional Sales Manager (North) Rajeev Gandhi, Regional Sales Manager (West) positions, embracing B.R. Ambedkar as a symbol of its India- Arokia Raj L., Regional Sales Manager (South) first and pro-Dalit credentials, allowing women into the organ- isation even if not inside the shakhas, and softening its stand on Mahatma Gandhi, whom it opposed because of his acquies- OUR MAY 2014 COVER cence to India’s partition. Instead of being mired in caste divi- sions, it wants to create a rainbow coalition to revitalise its cadres and unify Hindus under one umbrella. At the 2016 India Today Conclave, the group’s Sahsarkaryavah Dattatreya Hosabale went a step further and deviated from RSS’s known stand on homosexuality, saying it’s a matter of choice and should not be a criminal offence. Also, the RSS chief’s controversial view that the reser- vation policy should be reviewed was contemporary and forward-looking. There is no doubt the RSS enjoys greater political clout within the Modi government and the BJP than it ever has. Present and former members are involved in administration and governance at various levels—from senior min- Volume XLI Number 17; For the week isters to organisational bigwigs, from appointees in cultural and educational April 19-25, 2016, published on every Friday institutions to leaders who represent the party on conventional and social (cid:30)F CE-d8i,t oSreicatlo Or-f1fi6cAe ,L Fivilimng C Mitey,d Niao Iidnad i-a 2L0t1d3.,0 I1n;d Piah Tonode:a 0y 1G2r0o-u4p8 0M7e1d0i0ap lex, media. It is no surprise then that the RSS is growing more rapidly now than (cid:30) Subs criptions: For assistance contact Customer Care India Today Group, A-61, Sector-57, Noida (UP)-201301; Phones: Toll-free number: 1800 1800 100 (from it ever has, with its shakhas swelling by around 40 per cent over the last five BSNL/MTNL lines); (95120) 2479900 from Delhi and Faridabad; (0120) 2479900 from Rest of India (Monday-Friday, 10 a.m.-6 p.m.); Fax: (0120) 4078080; years, of which the major push has come in the last two. Mumbai: 022-66063411/3412, Kolkata: 033-40525327, Chennai: 044-24303200; e-mail: [email protected] But some key issues remain unresolved. Ghar wapasi, love jihad, national- (cid:30) Sales: Direct all trade enquiries to General Manager (Sales), Living Media India Limited, B-45, Sector 57, Noida-201301 (UP) ism, minorities, Ram Mandir, beef ban and the RSS’s economic vision are areas (cid:30) Regd. Office: K-9 Conn aught Circus, New Delhi-110001 (cid:30)M Iilmlsp),a Sc.tB O. fMficaersg:, 1L2o0w1e, r1 P2athre Fl l(oWore,s Tt)o, wMeurm 2b Aa,i -O4n0e0 0In1d3i;a Pbhuollnse C: e6n6t0r6e,3 (3J5u5p;i t er of concern as the Modi government reaches the two-year mark. Our cover story, Fax: 66063226 (cid:30) E-1, Ground Floor, Videocon Towers, Jhandewalan Extn, New Delhi (cid:30) Guna Complex, 5th Floor, Main Building, No.443, Anna Salai, written by Editor (Research) Ajit Kumar Jha and Senior Editor Uday Mahurkar, Chennai-600018; Phone: 2847 8525 (cid:30) 201-204 Richmond Towers, 2nd Floor, 12, Richmond Road, Bangalore-560025; Phones: 22212448, 22213037, 22218343; looks at the RSS makeover in greater detail, separating the cosmetic from the Fax: 22218335; (cid:30) 52, Jawaharlal Nehru Road, 4th Floor, Kolkata-700071; Phones: 22825398; F ax: 22827254; (cid:30) 6-3-885/7/B, S omajiguda, Hyderabad-500082; consequential as we analyse the chan ges and reveal the change-makers. Phone: 23401657, 23400479, 23410100, 23402481, 23410982, 23411498; Fax: 23403484 (cid:30) 39/1045, Karakkatt Road, Kochi 682016; Phones: 2377057, The big question is, can the RSS really change its colours? Can it under- 2377058 ; Fax: 2377059 (cid:30) 2/C, “Suryarath Bldg”, 2nd Floor, B ehind White House, PFaanx:c h26w5a6ti5, 2O9f3fi c(cid:30)e C Co.pGy. rRigohatd L, Aivhinmge Mdaebdaiad I-n3d8i0a0 L0t6d;. P Ahlol nrieg:h 2t6s 5r6es0e3r9v3e,d 2 t6h5r6o0u9gh29o u; t stand that the era of Swadeshi, protectionism, self-reliance, chauvinism and the world. R eproduction in any m anner is p rohibited. identity is gone? The Modi government came to power on a promise of devel- Printed and published by Ashish Kumar Bagga on behalf of Living Media India Limited. Printed at Thomson Press India Limited, opment, and will be judged on how it delivers on that front. The RSS must 18-35 Milestone, Delhi Mathura Road, Faridabad-121007, (Haryana) and at A-9, Ind ustrial Complex, Maraimalai N agar, District realise that its cultural and political future sails in the same boat. Kancheepuram-603209, (Tamil Nadu). Published at K-9, Connaught Circus, New Delhi-110001. Editor: Aroon Purie. (cid:30) IN DIA TODAY does not take the res ponsibility for returning unsolicited publication material. All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi/New Delhi only (Aroon Purie) APRIL 25, 2016 (cid:31) INDIA TODAY 10 COVER STORY RSS United Colors 10 of RSS The saga of the Sangh is one of evolution from a cultural force to a political machine INSIDE DEFENCE 6 UPFRONT IAF 7 GLASS HOUSE 26 In a Death Spiral 58 GLOSSARY The IAF stares at a massive crisis as 60 EYECATCHERS its aircraft age and replacements take time arriving SPECIAL REPORT RIVER-LINKING Cover by NILANJAN DAS 30 Muddying Digital imaging by The Waters AMARJEET SINGH NAGI Photograph by From the Himalayas to the Western SHAILESH RAVAL Ghats, the Modi regime pushes ahead with a mammoth river-linking project with questionable benefits Page: 66-67 THE BIG STORY CINEMA TEMPLE TRAGEDY SHAH RUKH KHAN 22 It’s All Smoke 54 His Biggest and Tatters Fan A massive fireworks blast, some 113 deaths and counting, overnight a temple in south A star in search of his stripes, Shah Rukh Kerala and its custodians become a cautionary Khan returns to his acting rootswith a tale for those who flout the laws of the land trifecta of films this year 02 INDIA TODAY u APRIL 25, 2016 MAIL The Iron Maidens APRIL 11, 2016 Whatever their electoral performance, Amma and Didi are doing the cause of gender equality in India proud It is amazing that, in a democratic set-up, two women, who are known for their autocratic and dictatorial styles of functioning, have found such favour with the masses. For me, that makes them the iron(y) maidens. AVINASH GODBOLEY, Dewas Gynaecocracy Ship). The PWF, with Rules! whom he has entered into Apropos your cover story, an alliance, is a coalition of Warrior Queens, Amma politicians with limited ap- and Didi seem headed for peal. The DMK would have successive wins, thanks been a better bet as it is a largely to the Opposition in major political party, and both states being in disar- commanded a vote share of ray. The Congress-DMK all- over 26 per cent in the iance in Tamil Nadu is no 2014 Lok Sabha elections. match for the AIADMK, its Together with the DMDK’s prospects having receded The Virtues of Inconsistency 10 per cent, the electoral further with Vijayakanth chances would have been Modern Chinese leaders like Mao and Deng always saw “flexibility, opting to align with the brighter for both the DMK rather than consistency, as a positive virtue and the ability to re- People’s Welfare Front and Vijayakanth. By driv- spond to the logic of a particular situation as a sign of wisdom and (PWF). As for the Congress- ing a hard bargain with an indication of power”. This seeming inconsistency is a function Left alliance in West Karunanidhi, Vijayakanth of the sheer size of the country and the contradictions that Bengal, it can dent TMC’s might just have committed abound within its borders. It’s what explains the question you ask performance, but is un- political harakiri. His con- in your story Chinese Double Barrel: “How did China go from a likely to dislodge Mamata. tribution as opposition country that was two decades ago largely dependent on the im- A. SRIKANTAIAH, Bengaluru port of arms, mainly from Russia, to a major producer and supplier leader in the Tamil Nadu assembly has been unex- of advanced weapons?” Mao the Great Helmsman always believed Apropos your story, Didi in zi li geng sheng or regeneration through one’s own effort. ceptional, nor is he a great Still the Dada, in India, the orator like Vaiko or C.V. VENUGOPALAN, Palakkad politics of freebies has Tirumavalavan. Most MLAs taken firm root. Tamil gressive streak in her sec- for Mamata. Despite the of his party have already Nadu showed the way and ond term, and it will be the state not turning the cor- defected to rival camps, Jayalalithaa is keeping up end of the road for her. ner as expected when she more are likely to do so. the tradition. However, SUBRAT KANUNGO, Noida dislodged the Left, it is KANGAYAM R. NARASIMHAN, even in Bengal, Mamata is Mamata’s ‘people like us’ Chennai resorting to the tactic, an- The completely opportun- image that will help her nouncing rice at Rs 2 a kg. istic alliance the Left has comfortably sail through The BJP may be reluctant Whether it directly trans- entered in with the these elections. to admit it, but the party lates into votes is debata- Congress in Bengal indi- VIPUL PANDE, Nainital does seem to have learnt a ble. Mamata is poised to cates how formidable Didi few lessons from the Bihar win anyway, even if with a is. The coming together of It looks like Vijayakanth is debacle in November. And reduced majority. But she these two ideologically dif- destined to captain a rud- Assam is where it has put cannot take her position for ferent parties is only likely derless ship (Captain it into action, first, by dec- granted forever. Any re- to attract more sympathy Steers the Third Front laring Sarbananda 03 INDIA TODAY (cid:31) APRIL 25, 2016 MAIL FROM THE ARCHIVES Sonowal as chief ministe- or the Shimla conclaves Militant Revivalism rial candidate and, second, seem a thing of the past. The new militancy is menac- by entering into an alli- The organisation has not ing, and growing in intensity. ance with the Asom Gana had proper elections for its And the message being Parishad and the Bodoland top bodies for a while and hammered home is the People’s Front (The Going members to the Congress same: for too long, the minor- Gets Tough). Of course, Working Committee con- ities have been appeased and one will have to wait till tinue to be nominated. pampered while the majority May to find out if the strat- Unless the party can get its has been restrained from as- egy has paid off, but trends RAW Wound act together, 2019 looms serting what it holds to be the in the first phase seemed as a lost cause. only basis for unifying the In arresting alleged encouraging. Badruddin J. AKSHOBHYA, Mysore country—Hindu nationalism RAW spy Kulbhushan Ajmal’s All-India United The new mood and the Jadhav, anti-India Scorched Earth Democratic Front could forces taking shape manifest forces in Pakistan have queer the pitch yet, espe- The photograph of the themselves in dozens of ways: tried to kill two birds cially as it has shown itself parched earth in Latur in the sharply increased at- with one stone (The willing to tie up with the (The Great Thirst) was de- tendance at temples, the Man in the Dhow)— Congress. pressing. How can the ad- growing strength of the once ensure that any prog- J.S. ACHARYA, Hyderabad ministration be so callous discredited Rashtriya ress in India-Pakistan toward the suffering of its Swayamsevak Sangh (RSS), talks is stalled, and si- I am afraid 2016 is not people? It took the which has seen a sudden and multaneously create a looking good for the Bombay High Court to unprecedented increase in at- wedge between India Congress, as the party reprimand the state and tendance at its drills and en- and Iran just when ties seems to have lost its the BCCI for using pre- joyed the growing popularity are warming up. It is moorings entirely after the cious water to water IPL of its numerous front organi- also aimed at derailing humiliating defeat of 2014. pitches when people were sations, the drive to reconvert the anti-terror coopera- One also hopes that it real- reeling under a drought. people from Islam and tion India is hoping to ises that the negative turn S.R. DEVAPRAKASH, Tumkur Christianity to Hinduism and have with Saudi Arabia for the BJP in 2015 does the effort to end Christian or and the UAE. However, not mean the Congress is Don’t they deserve better, Muslim proselytisation, the Pakistan risks embar- reviving in 2016. The proof the wretched of the earth? palpable increase in commu- rassing only itself as is evident in how its gov- How long do they have to nal tensions across the coun- India has now extended ernments have collapsed pay the price for the negli- try’s northern belt, the the olive branch several in Arunachal Pradesh and gence and mismanage- programme aimed at “liberat- times. Uttarakhand. The fight ment of the politicians who ing” more than two dozen between the old guard AKSHAY VISWANATHAN, draw their salaries from Hindu temples—converted and the young turks is not Thiruvananthapuram public money? into mosques by the Mughal helping its cause either. If indeed he is Indian, J.V.V. MURTHY, Coimbatore rulers, the growing popularity Nor has Sonia Gandhi’s the government must of all-night jagarans, even withdrawal from party own up to their ‘spy’ and Latur’s water woes are a perhaps in the character of affairs in favour of son make all possible efforts matter of shame for the the vote in the 1984 general Rahul Gandhi. There has for his safe release country. It’s disheartening elections, described by a vari- ety of political pundits as a been no restructuring, and rather than leave him to to know that the supply of Hindu backlash. there does not seem to meet Sarbjit’s fate. water is insufficient to The clarion call to Hindu be any roadmap in sight. meet even the basic drink- SHWETA CHAUDHARY, nationhood, sounded from Self-introspection sessions ing needs of people. New Delhi the pulpits of rath yatras, like the one at Pachmarhi CHARVI KATHURIA, New Delhi dharnas, morchas, andolans, padyatras and kirtans organ- ised by socio-cultural-reli- Readers are recommended to make appropriate enquiries before sending E-MAIL YOUR LETTERS TO: gious groups like the RSS, the money, incurring expenses or entering into commitments in r elation to [email protected] Vishwa Hindu Parishad, the any advertisement appearing in this publication. The India Today Group does not vouch for any claims made by the advertisers of products and OR LOG ON TO Virat Hindu Sammelan, services. The printer, publisher, editor-in-chief and the editor of the India www.indiatoday.in Hindu Samajotsav... has Today Group publications shall not be held liable for any consequences in the event of such claims not being honoured by the advertisers. found credence and accepta- bility among the unlikeliest FOR SUBSCRIPTION ASSISTANCE, CONTACT: Customer Care, India Today Group, A-61, Sector-57, Noida of people. (Uttar Pradesh)-201301. Phones: 2479900 from Noida, 95120-2479900 from Delhi and Faridabad, and May 1986 0120-2479900 from Rest of India. Toll Free No.: 1800 1800 100. Fax: 0120-4078080. E-mail: [email protected] 4 INDIA TODAY (cid:31) APRIL 25, 2016 MOST SHARED MOST POPULAR INTERACTIVES ON FACEBOOK Dear Smriti Zubin Irani Stop giving my Men Talk Religion Following a faith is a way of life for women; for men it is an money to IITians! 1,097 assertion of identity http://www.newsflicks.com/story/men-talk-religion Three diet tips by Shilpa Shetty Kundra 1,042 PM Narendra Modi leaves for Kerala with expert medical team 878 MOST LIKED ON FACEBOOK Delhi girl Priyadarshini Chatterjee crowned Miss India World 2016 17,000 British Royals, Sachin Tendulkar bat in Mumbai for underprivileged kids 8,400 Tourists Love Taj, and? Central government’s spending on monuments reveal order of importance http://www.newsflicks.com/story/tourists-love-taj-and Priyanka Chopra to be awarded with Dadasaheb Phalke Film Foundation Award 5,300 MOST RETWEETED & FAVOURITED We stand with the families of the victims, and we pray for the injured: Amit Shah 244 They are threatening us with rape and molestation: Outstation girls at NIT 174 Baloch activist Naela Qadri’s tale of Pakistan army torture 156 Better than Ali or Tyson? Anthony Joshua, at all of 26, is already a heavyweight champion http://www.newsflicks.com/story/better-than-ali-or-tyson MOST READ ONLINE STORIES WhatsApp is now probably illegal in India 6,53,705 102 killed, over 280 injured in Kerala’s Puttingal temple fire 5,78,451 Indian Premier League 2016: Complete team list 2,98,526 UPFRONT AJIT RANADE PANAMA LEAKS: A BRIDGE TOO FAR In the early days after independence, India led a hand- you to escape high taxes in the home country. This could to-mouth, or rather a ship-to-mouth existence. be due to tax avoidance (which is legal) or tax evasion Chronic food shortages in the pre-Green Revolution (which is illegal). But apart from tax dodging, moving days meant substantial import dependence on foodgrain to a haven like Panama also allows you to acquire that arrived by sea. This, in turn, meant we needed to layers of secrecy. have adequate foreign exchange to pay for food imports, If the ultimate beneficiary (that is, the owners) cannot and also for the oil. In those early days of Soviet-style be traced, then the corporate veil can become opaque planning, which combined export pessimism and import and impenetrable. With multiple layering of firms and substitution, foreign exchange was extremely scarce. ownership, the ultimate beneficiary could indeed Inward foreign investment was mostly barred. The become unknowable. The desire for secrecy or anonym- country had to conserve every dollar, like water in a ity could be legitimate, especially for someone who does drought. Dollars could come in, but could not go out. not want to flaunt their wealth in the home country. In This explains the rather harsh provisions of the India, some may even become targets of extortion and Foreign Exchange Regulation Act (FERA), violation of mafias, and hence may want the safety of hiding their which was a criminal offence. Those were the bad old wealth in a haven like Panama. days, with stories of over- and under-invoicing, and clev- But if the income and assets that flow into such er ways of smuggling dollars out of India. All this changed opaque companies come from illegal sources like bribes, in the liberalisation era, starting 1991. As foreign direct drugs or terrorist financing, then it is antithetical to the investment was opened up, so were the restrictions on national interest and to national security. There could the exit of dollars from India. The most telling statistic is also be instances of “round tripping”, wherein out- that India’s foreign exchange reserves, which remained bound capital from India, re-enters through a Panama constant at about five billion dollars for decades, bal- company, while enjoying special tax benefits and other looned to more than 300 billion dollars in the decade after privileges. But such transactions are more commonly opening up. The floodgates had opened, only to witness executed via Mauritius than Panama. Last year, we had capital not rushing out, but rushing in. the Swiss leaks, revealing names in HSBC, Geneva. That FERA was replaced by FEMA in 1999, and viola- too led to speculation over ill-gotten wealth secreted tions were no longer a criminal act, but punishable by a abroad. Black money has been a hot topic since 2011, penalty. India’s capital account gradually became more and became something of a national obsession during open, especially for foreign and Indian corporates, and the 2014 Lok Sabha elections. non-resident Indian individuals. But it’s important to note that the Panama leaks have From 2004, Indian residents too could move out only revealed the mechanism used to create companies larger amounts of dollars to invest abroad, without any and trusts. They haven’t revealed the size of assets or questions asked (though report- their legal status. Even in the ing remains mandatory). Against Illustration by SAURABH SINGH case of the Swiss leaks it would such a background, the Panama take a herculean effort to estab- leaks present a curious story. They lish culpability, let alone punitive reveal thousands of Indians who action and the eventual repatria- created trusts and companies that tion of the loot. held foreign assets. At this time, it The US authorities had to is not clear whether all assets were practically threaten a shutdown hidden or reported to authorities of Swiss banks in America, before in India (like the Reserve Bank they could extract incriminat- of India and the government). It ing evidence on tax-dodging US is, however, possible that many citizens holding Swiss accounts. accounts and companies are the Finally, it is useful to remem- result of legitimate transactions. ber that a huge cache of black For instance, if money was earned money can be unearthed within abroad, it was possible to park India itself. The three notorious it overseas legally. If, however, sectors are real estate, education these assets were moved prior to (capitation fees) and elections. the FEMA regime, then that may The Panama leaks are currently With liberalisation in 1991, foreign be illegal. There’s no use saying a bridge too far. direct investment was opened up that the FERA law was draconian, since it applied to all. and so were the restrictions on the The author is an economist and a Tax havens by definition allow exit of dollars from India. political analyst 6 INDIA TODAY (cid:31) APRIL 25, 2016

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20,201 1,248 3,600+. Accidental deaths due to natural causes .. had registered to the RSS worldview, its history and ideological underpin- nings.
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