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Iqbal Mirchi money laundering case: DHFL MD Kapil Wadhawan held

The ED on Monday arrested Kapil Wadhawan, Chairman and MD of Dewan Housing Finance Ltd, in connection with the agency’s probe into the Iqbal Mirchi money laundering case.

Seeking his custody for seven days from a special PMLA court, the ED called him an ‘active conspirator’ in the case.

On Monday, the special PMLA court also granted bail to Kapil’s brother Dheeraj who is accused by the agency of being the ‘prime mover’ of a property deal between a company linked to him and late drug lord Iqbal Memon, alias Mirchi.

The ED has alleged in its complaint how properties of Mirchi, believed to be proceeds of crime, were sold to Sunblink Real Estate Private Ltd, a company linked to Dheeraj Wadhawan. Dheeraj claims he was not aware that Mirchi was a wanted man.


Arguing for custody of Kapil, the agency told the court that in 2010-11, DHFL had given loans to five shell companies amounting to Rs 1500 crore, and by July 2019, the outstanding amount had reached Rs 2186 crore.

The beneficiary owners of these companies are Kapil and Dheeraj, the agency has alleged. “The sole purpose of these companies was to siphon off public money,” it added.


It is further alleged that these five entities and Sunblink Real Estate Private Ltd are inter-related and have been used and controlled by Kapil to ‘layer and obfuscate’ the origin of the monies. Kapil, the agency alleged, has played a ‘very crucial role’ in the nefarious transactions by way of money laundering. “He first diverted huge funds from DFHL to shell companies. Later these shell companies got amalgamated with Sunblink real estate to cover the alleged diversion of loans acquired from DHFL,” it said.

Kapil is also one of the promoters of RKW Developers. The agency told court that a loan of Rs 50 crore taken from DHFL was later repaid by a loan taken from RKW developers while Kapil Wadhawan was in control of affairs of both.

Appearing for the ED, special public prosecutor Hiten Venegaonkar told court that this Rs 50 crore was disbursed by DHFL to Sunblink without taking into account the loan policy of DHFL. At the time of sanctioning of the loan, there was no substantial property in the name of Sunblink. The ED also mentioned in court the statement of one real estate broker involved in a land deal who had stated that Kapil Wadhawan had visited London with him to meet Iqbal Mirchi, but that he did not meet him.

Appearing for Kapil, his advocate Prasad Dhakephalkar argued that the five companies are totally unconnected to the Iqbal Mirchi case and questioned the basis on which the agency had come to the conclusion that the companies were shell companies. Special judge PS Rajvaidya gave the agency custody of Kapil till Wednesday.


Budget Expectations to Revive Fraying Economy

The Budget to be presented on February 1 is being keenly watched for a number of reasons.  First, the Finance Minister has to do a tight rope walk in balancing the considerations of fiscal consolidation and providing a stimulus at a time when the economy has been slowing down and inflation is on the rise.  There is considerable pressure to loosen the purse and relax the FRBM targets to revive consumption and investment demand.  Second, the Budget this year will incorporate the first report of the Fifteenth Finance Commission which decides the volume of resource transfers to the States and thereby determines their fiscal fortunes.  Third, in the prevailing poor investment climate, there is considerable demand for rationalisation of the direct taxes by removing the dividend distribution tax and aligning the individual income tax with the rate of corporation tax reduced in September.  

Even in normal times, Finance Ministers have an unenviable task of balancing the books, but in the present economic environment, the challenge is formidable.  The growth rate of 4.5 per cent recorded in the second quarter is the slowest in the last 26 quarters and the 5 per cent growth estimated for the whole year is the slowest in the last 6 years.  In fact, if the growth recorded on account of public administration and defence is excluded, the real economy is estimated to be recording just 3 per cent growth in the current year.  Core sectors have been shrinking since August and exports have been stagnant.  While the monetary policy has traversed a considerable distance with its accommodating stance, the lurking fears of inflation do not provide further scope for rate cuts. 


The twin balance sheet problem has conti­nued with the private sector not taking the investment initiative and the burden of revival has been placed at the door of fiscal policy.  Although the recapitalisation of the banks has helped, governance issues rem­ain unaddressed and bankers are not will­ing to lend and corporates are unwilling to borrow.  In addition, there is a NBFC crisis af­t­er the collapse of ILFS which has dried up resou­rces for the small and medium sector.


Sea­r­ch for fiscal space for expenditure expansion:

Not surprisingly, the chorus of opinion is to shun fiscal conservatism and go for massive expenditure expansion to revive the economy.  In any case this fiscal is likely to see substantial slippage due to substantial shortfall in revenue collections, first due to far too optimistic revenue projections in the budget estimate and second due to much lower growth of nominal GDP at 7.5% as compared to the assumed 12%.  To be sure, the assumed growth of taxes in the budget estimate over the actual collections in the previous year is a staggering 18.3%.  The shortfall is estimated at about Rs. 2.5 trillion of which the Central share would be Rs. 1.7 trillion.  Thus, despite the additional contribution by the RBI of Rs. 0.86 trillion over and above the budgeted Rs l 9 trillion, there could be slippage in the fiscal deficit numbers by about 0.5 points.

Counter-cyclical fiscal policy warrants fiscal expansion, but do we really have the fiscal space?  With household sector’s net financial savings at 6.2 per cent and when the government and public sector enterprises borrow over 8.5 per cent there is hardly any fiscal space for increased government borrowing.  Thus, even as the repo rate has been reduced by over 135 basis points since January 2019, this has not seen transmission in the lending rates.  The RBI had to repeatedly come up with open market operations to ensure liquidity in the economy which in effect, meant monetising the deficit which was formally stopped after the agreement between RBI Governor and the Finance Secy in 1996.

Thus, increased spending by the government will have to be achieved mainly by speeding up disinvestment and privatisation.  This is necessary not only to augment the much needed revenue but also to ensure the right role of the government.  Should the government be running airlines, steel mills, travel agencies, hotels or telecom firms?  There is a massive increase in the fees of telecom companies after the Supreme Court judgement on AGR.  Although there are serious questions on the appropriateness of the judgement and viability of telecom companies, if it is finally implemented additional revenue will accrue to the government in the next few years. 

Even if it is decided to miss the fiscal targets, it is important to ensure the credibility of the numbers.  In fact, it does not make much sense to fix the fiscal deficit target at 3.3% and finance expenditures through off budget mecha­nisms.  The C&AG has repeatedly drawn attention to various off budget liabilities and financing of deficit through non-transparent ways.  The IMF Article IV report released in Dec too draws attention to the need to make the Budget compreh­en­sive and transparent.  Perhaps, gov­e­r­n­ment should come clean and declare the correct numbers, record the extent of slippage and lay down the path of conso­lidation in the MTFP.  Will they do it? I doubt it.

Need for increased infrastructure spending.

In the prevailing poor investment climate, substantial increase in infrastructure spending is necessary not only to augment the investment demand but also to enhance productivity. The Finance Minister has come up with the announcement that there will be an investment of Rs. 102 trillion in the next five years.  According to the announcement, 43% is already under implementation and 33% is at the conceptualisation stage.  The share of the government in this is estimated at 78% equally shared between the Centre and States and the remaining 22% will be spent by the private sector.  The major infra­ sectors for investment include energy (24.5%), transport (25.7%) and urban and rural development (24%).   The capital outlay of the Centre itself is supposed to increase from Rs. 3.5 trillion in 2018-19 to Rs. 10 trillion in 2024-25.  This implies virtually doubling the capital expenditure – GDP ratio from 1.5% of GDP to more than 3%.  If only wishes were horses!

Much of the increase in capital expenditure will depend upon how much we are willing to rationalise by phasing out subsidies and transfers and how much additional borrowing is resorted to.  The amendment to the FRBM Act done last year did away with the revenue deficit target which implies there is no targeted reduction in revenue expenditures.  Will this also remain as yet another announcement without action?  The real test of the promise of augmenting investment expenditures will come in the Budget. 

—(Dr M Govinda Rao is former Director, National Institute of Public Finance and Policy and Member, Fourteenth Finance Commission) (Syndicate:The BIllion Press)


'Dictatorship is at its peak': Chandrashekhar Azad on forcibly being sent to Delhi

Bhim Army chief Chandrashekhar Azad, who was detained on Sunday by Hyderabad police while he was en route to address a public meeting against the Citizenship (Amendment) Act, tweeted on Monday saying that he was “being sent to Delhi”.

Azad tweeted in Hindi saying that, “Dictatorship is at its peak in Telangana. People’s right to protest is being snatched, first, our people were beaten with sticks, then I was arrested, now I have been brought to the airport and being sent back to Delhi. @TelanganaCMO Remember Bahujan society will never forget this insult. Will be back soon.”

Chandra Shekhar Aazad

तेलंगाना में तानाशाही चरम पर है लोगों के विरोध प्रदर्शन करने के अधिकार को छीना जा रहा है पहले हमारे लोगों को लाठियां मारी गई फिर मुझे गिरफ्तार कर लिया गया,अब मुझे एयरपोर्ट ले आएं है दिल्ली भेज रहे है। @TelanganaCMO याद रखे बहुजन समाज इस अपमान को कभी नही भूलेगा। जल्द वापिस आऊंगा

4:09 PM - Jan 26, 2020
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The 33-year-old Bhim Army leader was in Hyderabad on Sunday was heading, to address a gathering on the Citizenship Amendment Act, National Register of Citizens and National Population Register, that is when he was arrested by the police. The Hyderabad police had said they had not granted permission for the programme to be held.

Azad was in Hyderabad to attend two meetings against the CAA, organised by alumni of Tata Institute of Social Sciences (TISS) and All India Dalit Muslim Adivasi Progressive Front (AIDMPAF).

Azad's detention came 10 days after his release on bail from Tihar Jail. He was arrested by Delhi police on December 20 on charges of inciting people during anti-CAA protest. He was held when he tried to take out a march from Jamia Masjid to Jantar Mantar.

The court also restrained Azad from visiting Delhi for four weeks and directed him not to hold any dharna till the elections in the national capital. The court also said that before going to Saharanpur if Azad wants to go anywhere, including Jama Masjid, in Delhi till 24 hours, police will escort him there.

'India's constitution and democracy is in danger, won't let country to be divided': Yashwant Sinha

Lucknow: Former union finance minister Yashwant Sinha, who is presently on a 3000 km Gandhi Peace March, has said that the country's Constitution is in danger as attempts are being made to divide the country on religious lines.

Sinha, who arrived in Lucknow on Saturday, said in an informal chat with reporters, "We are out to spread the message of peace, non violence. The reason we decided to take out a Yatra is because the country's Constitution, its democracy is in danger. There appears to be great unrest. The farmers are unhappy and there are protests everywhere."

He further said: "Hatred for each other is growing among the masses and this needs to be checked. In a democracy, each of us has a right to be heard. If the people are unhappy over something the government needs to hear them."

Sinha had begun his peace march with his supporters on January 9 from Mumbai. So far he has covered Rajasthan, Haryana and now Uttar Pradesh. The Yatra will conclude at Rajghat in Delhi on January 30, which is the death anniversary of the Father of the Nation.

Yashwant Sinha has got the support of NCP leader Sharad Pawar, Samajwadi Party leader Akhilesh Yadav and Congress leader Shatrughan Sinha in his Yatra.

The former union minister unfurled the flag with Akhilesh Yadav in Etawah on Saturday on the occasion of Republic Day.

BJP leader Pankaja Munde to hold day-long hunger strike over Marathwada water crisis

Bharatiya Janata Party (BJP) leader Pankaja Munde will be leading a day-long hunger strike and protest here on Tuesday to outline the issue of water crisis in the region.

"We are going to organise a day-long hunger strike over the issue of Marathawada water crisis and want the Uddhav Thackrey government to take measures to resolve the same. The protest is also about other problems which are in Maharashtra", she said.

"Due to the lack of water, farmers are facing difficulties in Marathawada. Owing to low produce and lack of funds, they are not able to provide education to their children. The lack of water has increased unemployment in the region," she said.

"We are expecting that all the leaders of Maharashtra will join our movement. If we will not get success in one day rally then in future we will take some other steps," the BJP leader added.


Protestor beaten up for raising anti-CAA slogans at Amit Shah's rally in Delhi

New Delhi: A youth, among a small group who raised slogans against the Citizenship Amendment Act at Union Home Minister Amit Shah's poll rally here on Sunday, was beaten up by people at the rally.

Shah, who was present at that time, directed his security to take the youth to safety.

As the Home Minister was addressing the rally in Babarpur Assembly constituency for the February 8 Delhi Assembly elections, four-five youths began shouting slogans demanding the rollback of the act. People seized hold of one of the youth and beat him up before Shah's intervention.

In his speech, Shah targeted both the city's ruling Aam Aadmi Party and the Congress, saying that Prime Minister Narendra Modi brought in the CAA but "Rahul Gandhi, Arvind Kejriwal and company were opposing it".

"They (the opposition) incited and misled the people, buses were burnt, cars were burnt and if these people come back, then Delhi will not be secure," he alleged.

Appealing to the people to vote for the BJP, he said his party's victory would ensure Delhi remains secure and incidents like the Shaheen Bagh protests are curbed.

He said that the BJP and Modi would transform the city, and urged people not to go by the "false promises" of others.

'Tribals are the original inhabitants': Sharad Pawar backs tribals for recognition of their indigenousness

Indore: Nationalist Congress Party (NCP) chief Sharad Pawar on Sunday voiced his support for the tribal community's demand for recognition of their indigenousness from the United Nations.

"Tribals are the original inhabitants of the country, we support their demand for recognition of their indigenousness from the United Nations," said Pawar.

Earlier in the day, the NCP leader had demanded the installation of statues of social reformers including Tantya Bhil in the premises of the Parliament.

"On January 26, the birth anniversary of Tantya Bhil will be celebrated across the country. I will try to have deliberations with the President, Prime Minister and the Speaker regarding the installation of statues of those who have contributed to the country including Tantya Bhil in the Parliament premises," Pawar said during a programme organised to celebrate the birth anniversary of Tantya.

Adding that Tantya and Dr BR Ambedkar, the architect of the Indian Constitution, were born in the land of Madhya Pradesh, Pawar said, "The Kamal Nath-led government will work for the tribals in the State. Great Bhil and Ambedkar were born here, in this land. I feel that there is a need to take some steps for the development of our society." Tantya was a member of the Bhil tribe, the indigenous Adivasi community, and is recognised as a heroic figure. He is known for his contributions to the society and the Indian Rebellion of 1857.

626 members of EU move resolutions against India over CAA and Kashmir

New Delhi: After Pakistan Prime Minister Imran Khan's relentless global campaign against India over the Citizenship Amendment Act and reorganisation of Jammu and Kashmir, the European Union (EU) parliament has decided to pressurize New Delhi.

Out of 751 members of the EU Parliament, 626 have moved six resolutions on both the issues. The diplomatic offensive by the EU against India comes ahead of Prime Minister Narendra Modi's visit to Brussels for the India-EU summit in March.

Sources in the Ministry of External Affairs here said the government took note of the EU move immediately and will withstand the EU pressure by reminding its members that the CAA is "an internal matter" of India.

"Moreover, this legislation has been adopted by due process and through democratic means after a public debate in both Houses of Parliament," a source said.

The government, sources said, is going to argue that every society takes into consideration a context and criteria to formulate its own process for naturalisation. European countries have themselves followed the same approach, an official pointed out. "This is not discrimination," he added.

Sources said that New Delhi is hoping that the sponsors and supporters of the draft in EU will engage with it to get a full and accurate assessment of the facts before they proceed further. "As fellow democracies, the EU Parliament should not take actions that call into question the rights and authority of democratically elected legislatures in other regions of the world," a senior official said.

Interestingly, UK Prime Minister Boris Johnson, who is in the midst of completing Brexit from the EU, has been reaching out to India for strengthening trade and bilateral relationship ties. The EU-UK ties have soured since the Brexit vote.

AAP, Congress inciting Muslims against citizenship law, instigating riots: Amit Shah

New Delhi: The BJP sustained its attack on the AAP and the Congress over the amended citizenship act on Friday, with Home Minister Amit Shah accusing the two parties of "inciting Muslims" against the law and "instigating riots" in Delhi.

Shah also accused the Kejriwal government of not fulfilling its promises, and pledged to make Delhi the best capital city in the world if BJP is voted to power in assembly elections. Claiming that one-third of people in Delhi were refugees from Pakistan, Shah slammed AAP and Congress for opposing the law, which seeks to grant citizenship to religious minorities escaping persecution in Pakistan, Bangladesh and Afghanistan and who have come to India by December 31, 2014.

"They started inciting Muslims and instigated riots in Delhi. They are still saying - we support Shaheen Bagh. Congress leaders visit Shaheen Bagh regularly," he said, referring to the anti-citizenship law protest in the area continuing for over a month. On Thursday, Delhi Deputy Chief Minister and senior AAP leader Manish Sisodia said he stood with the people of Shaheen Bagh.


The BJP has been out of power in Delhi since 1998 and has been making attempts to dislodge AAP in the assembly elections scheduled for February 8. Shah has been leading the BJP campaign addressing back-to-back rallies in the national capital ahead of the assembly polls. On Thursday, he addressed a rally in Matiala in west Delhi and hit out at the AAP, accusing Delhi Chief Minister Arvind Kejriwal of speaking Pakistan Prime Minister Imran Khan's language. Later that day, he took out a roadshow in Uttam Nagar and addressed another rally in Nangloi Jat.

On Friday, Shah addressed meetings in Karawal Nagar and Mustafabad in northeast Delhi. He promised BJP will implement Ayushman Bharat scheme and PM Awas Yojana if voted to power in Delhi, a day after he accused the AAP government of stalling the Central health scheme.

"This fight is between those who do not fulfil their promises and those who do more than they promise," Shah said, accusing the AAP government of failing to fulfil its 2015 poll promises. Talking about the outgoing government's free power and water supply schemes, he alleged, "People are getting bills of Rs 5,000-Rs 6,000 despite free consumption allowed up to 200 units per month. Kejriwal government is supplying the dirtiest water in the homes of Delhi."

The Ayushman Bharat scheme offers Rs 5 lakh treatment to the poor but Kejriwal government did not implement it, fearing it will earn popularity for Prime Minister Narendra Modi, he said. "The Modi government provided ownership rights to 50 lakh residents of 1,731 unauthorised colonies in Delhi which Congress and AAP could not do in past 20 years," he said.

The former BJP chief highlighted Modi government's achievements, including the surgical strike inside Pakistan after the February 2019 Pulwama terrorist attack, Supreme Court judgment paving way for construction of Ram Temple in Ayodhya and abrogation of Article 370 in Jammu and Kashmir.

"For 500 years, all Indians wanted a Ram temple in Ayodhya. But whenever the case came up for hearing Rahul baba and his lawyer Kapil Sibal obstructed it. Now, a towering, grand Ram temple will be constructed in Ayodhya in four months." He also lashed out at Kejriwal and Gandhi and former Prime Minister Manmohan Singh, saying surgical strikes were done under the Modi government. "Pakistan forgot that Mauni Baba Manmohan Singh was no longer the prime minister. Narendra Modi with 56 inch chest was PM and we killed the terrorists in Pakistan," he said.

He slammed Kejriwal for seeking "evidence" of the surgical strike, saying he could have watched Pakistani TV channels instead of questioning India's action. Shah also accused Kejriwal and Gandhi of backing those allegedly raising "Bharat Tere Tukde Honge Ek Hazar" slogan at JNU, asserting Modi government sent such elements behind the bars. "But the Kejriwal government is not giving sanction for their prosecution," he said. He stated that people needed to support the BJP and Narendra Modi for a "safe" Delhi.


2G mobile internet services to be restored in Kashmir from today

Srinagar: After remaining shut for more than five months, 2G mobile internet services on postpaid as well as prepaid phones will be restored in the Kashmir Valley from Saturday but can only be used to access 301 websites approved by the Jammu and Kashmir administration, an official order said.

According to a notification issued by the home department of the Jammu and Kashmir administration, access to the internet with 2G speed on mobile phones will resume from January 25. Access shall be limited only on whitelisted sites and social media applications will continue to remain out of bounds for the Valley's residents, it said, adding, data services shall be available on postpaid as well as prepaid sim cards.


The move comes within a week of the administration ordering restoration of prepaid mobile services in the Valley and resumption of 2G mobile data service on whitelisted websites across the Jammu division. The sites approved include search engines and those associated with banking, education, news, travel, utilities and employment.

The latest development comes after the Supreme Court, in a significant ruling on January 10, asked the Jammu and Kashmir administration to review within a week all orders imposing curbs in the Union Territory. The Supreme Court came down heavily on the UT administration for arbitrarily shutting down the internet, the facility described as a fundamental right by the apex court.

Internet services, landline and mobile phones were snapped across Jammu and Kashmir on the eve of the Centre's announcement to scrap special status of the erstwhile state and its bifurcation into Union Territories on August 5. While most of the services except mobile internet were restored in Jammu within a week, Kashmir witnessed restoration of landlines and postpaid mobile services and internet facilities for essential services like hospitals in phases.