Is it time for govt undertakings to wind up?

  • Shailesh Gaikwad, Hindustan Times, Mumbai
  • Updated: Feb 16, 2016 17:21 IST
It is not the first scam that has taken place in the government undertakings formed for welfare of the weaker communities. (Picture for representation only)

Earlier this month, the Mumbai police arrested a prominent city-based builder in connection with a scam in Lokshahir Annabhua Sathe Magasvargiya Vikas Mahamandal, a government undertaking founded for the welfare of Matang, a socially backward community.

The charges are that Rs106 crore from the Mahamandal (corporation) were illegally invested in his building construction firm. It is part of a Rs300 crore to Rs400 crore scam in which Nationalist Congress Party (NCP) legislator from Solapur Ramesh Kadam is the main accused and has been in jail for more than six months.

Kadam was chairman of the corporation when crores of rupees were allegedly siphoned off and either invested in business firms or transferred to the bank account of certain entities.

Put simply, the allegations against Kadam and others are that they embezzled crores of rupees that were to be distributed to the underprivileged members of the society for self-employment. Despite the huge amount involved, the scam has not surprised anybody.

It is not the first scam that has taken place in the government undertakings formed for welfare of the weaker communities.

It reminds us of the infamous shoes scam or cobbler scam that was unearthed by some honest bureaucrats and police officers in the mid-1990s.

The scam was worth more than Rs1,000 crore and the money was embezzled by taking advantage of a state government scheme meant for poor cobblers by providing them funds to set up and

run their own small businesses.

According to investigators, some leading shoe shop owners formed fictitious cooperative societies of cobblers and got loans from government undertakings such as the Maharashtra State Finance Corporation as well as prominent banks. Nobody knew where all the money went. It was alleged that several politicians were involved, but nobody went behind bars.

It reminds us of the scam in the Mahatma Phule Backward Class Development Corporation. Crores of rupees were siphoned off from the corporation meant for the welfare of those belonging to scheduled castes and scheduled tribes.

The anti-corruption bureau probed the scam and submitted the report following which some people were prosecuted.

Former Sena minister Babanrao Gholap, who was also in the dock over the scam, was later sentenced to imprisonment in a disproportionate assets case.

These are some of the examples.

Most government undertakings—not only the ones meant for providing self-employment to the socially backward communities, but even the ones like the Maharashtra State Finance Corporation (MSFC), which provides finance to businesses — witnessed many instances of public money being siphoned off by a nexus of politicians, bureaucrats and businessmen.

The irregularities in the Sathe Corporation just reminds us that some things never change.

May be, it is time for the government to take a good look at the functioning of these undertakings. Every year, it is pouring hundreds of crores of taxpayers’ money in these undertakings and nobody knows who is benefitted.

What we have seen so far is several instances of embezzlement.

Quite often, the aid and loans are cornered by political workers or relatives of the netas.

Often, those who get loans never return them to the government.

More often, the needy don’t get the aid. Nobody would say that the underprivileged sections of society should not be helped to start self-employment.

But then why can’t the government tie-up with banks to give them financial assistance?

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