Mother of all scams in India!

Indians seem to have taken a fancy to scams the same way that Somalians have to piracy. Almost every other breaking news on TV channels talks about some money making racket or the other. The latest scam to be unearthed may however be bigger than all the previous scams put together. And its ramifications may be even more lethal.

Under the double-tax treaty signed with the Swiss government, the Swiss will now have to provide details to the Indian government on transactions involving Indians. It's thus no big surprise that black money is quickly exiting the Swiss Alps. But then where are these illegal piles of cash going? Well, it may be coming right back to India and sitting peacefully in our own backyard. And the amount involved could be as hefty as US$ 40-45 bn. But, this is just the figure for one year, 2010-11. The actual amount of black money entering the country could be a lot more.

Do you ever look at the latest export numbers, FII data, etc. and believe that these numbers are works of fiction or a figment of someone's imagination? Well, the latest black money scam may be just that. According to three analysts from Kotak Securites, who have been studying various data points, the numbers just don't add up. Here are a couple of examples:

Official export data shows a 79% year-on-year (YoY) growth in engineering exports in 2010-11. However, exports by engineering companies in the BSE 500 index show just a 11% growth. In dollars terms, the difference is even starker. There appears to be a US$ 28 bn shortfall in exports. Now, the probability that this amount has come in through over-invoicing or fictitious exports is higher than that it came from tiny engineering companies which are not part of the BSE 500 index.

Copper exports have also quadrupled from Rs 85 bn to Rs 367 bn. But, how is this possible in India, a country which does not as a practice export this mineral. China apparently bought the whole lot. So is the dragon nation also part of this public hoodwinking?

Also, in 2010-11 foreign investor flows added up to US$ 22 bn, according to official data. The Kotak analysts did a cross-check with international sources like exchange-traded funds and EPFR Global. Their analysis shows that not more than US$ 4.5 bn came in to India. So, where did the other US$ 17.5 come from?

Well, India really needs to clean up its act. Else even the legitimate flows of capital into the country may dry up. Greater disclosures, a strong clampdown on corruption and a complete shakedown of government frauds need to take place. Anna Hazare's movement and his 12-day fast should not go in vain. And neither should India's reputation as an investment destination.

Govt threatened me: Baba Ramdev

Yoga guru Baba Ramdev on Sunday said the incident of Saturday night was a black movement for him. Addressing the media after reaching Haridwar, Baba Ramdev said innocent people were addressed to such barbaric acts on Saturday at the Ramlila Maidan.

"I kept on telling the policemen not to torture innocent people. Families and small children were subjected to torture, were not spared, they were dragged and beaten up," Ramdev said.
"On the night of June 4, if we had not stopped our workers from getting agitated then thousands of people would have died. Such kind of cruelty was not even seen in emergency or Jallianwala Bagh," he said. He added, "I am not scared of death. But, I didn't want to die in such a barbaric act."

Baba Ramdev explained how he tried to get out of the pandal by wearing a salwar, kameez. "Tear gas were fired upon. People are still admitted to ICU. For a full 2 hours it was mayhem in the pandal, police was firing tear gas and bullets. I am not scared of death," he said.He also said that the government kept pressurising him to end his fast. "We were assured that whatever we wanted would be done.

We were told that an ordinance will be brought to nationalise black money. We were assured that information regarding corrupt leaders, traders etc will be put in public domain. Everything was agreed upon except for one issue. The issue which was not agreed upon was the issue of nationalising black money stashed in foreign banks. The government was pressurising me to end my fast," he said.

Baba Ramdev claimed that he was forced to give a letter of consent in the hotel. "Manmohan Singh, Sonia Gandhi and Pranab Mukherjee were consulted. I got this information that either I be arrested, put in encounter or taken to an unknown destination," he claimed.
He also claimed that the government wanted him to call off his Satyagraha on June 3. He said, "The government could not see such a large Satyagraha where crores participated across the country. We were forced to write a letter on June 3 that by June 6 we will call off our Satyagraha."

He also claimed that the last letter that was given to him by the government did not mention anything about black money.He claimed that Kapil Sibal told him that if Anna Hazare shares the stage with him, they won't agree to any of his demands.
Attacking Sonia Gandhi, he also said, "Earlier I didn't used to pay attention to the fact that Sonia Gandhi wasn't born in this country. But, after Saturday night's incident, it shows that she does not have any place for the women and children of this nation."
Baba Ramdev also accused the UPA government of holding black money in foreign banks. He said, " Saturday night's act confirms that Rs 50 lakh crore belong to the Congress and its allies."He also made it clear that he is not done with his fast and will continue with his agitation.

"I am not done with my fast, I will continue with the Satyagraha, the agitation can't be removed from the hearts of people. If anything happens to me, Sonia Gandhi and the Congress government will be responsible for it," Baba Ramdev said.

Baba Ramdev called AICC General Secretary Digijaya Singh's comments irresponsible and refused to comment further on that. He also claimed to have given details of every penny spent, to the government.
He said that his supporters will peacefully observe black day on Sunday evening and Money.

He asked the government an explanation on the reason behind Saturday night's act. When asked whether his talks will continue with the government, Baba Ramdev said he will update as per developments.
Responding to allegations of breaking the rules, Baba Ramdev said, "I did perform Yoga asanas at Ramlila Maidan and the whole world saw. Speaking against corruption comes under the ethics of Yoga."
Responding to allegations about him working for the RSS and BJP, Baba Ramdev said, "I am not a member of the BJP, never even campaigned for them."