Vol 3, PW 4 (17 Mar 99) People & Policy

Guruswamys allegations are by far the most serious ever to have hit the ruling coalition and have undoubtedly cast a shadow over the anniversary to mark its first year in office.

Instead of celebrating, BJP officials are now forced to fend off allegations of corruption. Opposition parties are demanding the setting up of a Joint Parliamentary Committee to investigate Guruswamys charges.

The government refuses. Among the charges are:- **That a cabal around prime minister Vajpayee, headed by his adopted son in law, Ranjan Bhattacharya, meddles in governance.

Guruswamy accuses Bhattacharya of lobbying on behalf of a prominent Bombay banker, Deepak Parekh, to get Vijay Kelkar appointed as Finance Secretary over YV Reddy, Deputy Governor of Indias central bank, the Reserve Bank of India (RBI). Reddy was the choice of Finance Minister Sinha.

**That Enron has a Special Relationship with the Prime Minister's Office (PMO), in particular over the governments decision to allow the Houston-based company to raise much more than the stipulated 40% of its total borrowings from domestic financial institutions, a move which has sparked widespread criticism in India. **That the PM was favouring the powerful London-based Non Resident Indian (NRI) Hinduja Group in the matter of a coal supply transport agreement for its 1000-MW power plant at the port of Vizag in Andhra Pradesh.

**That the international tobacco conglomerate British American Tobacco (BAT) was allowed to take control of the Indian Tobacco Company (ITC) through the purchase of shares held by Unit Trust of India (UTI) at below market prices. **That on the basis of a Letter of Comfort from its principal, the US-based General Electric Capital (GE Cap) was allowed to borrow funds from Indian financial institutions at cheap rates (12%) and relend them at rates that undercut non banking Indian finance companies.

True or false, these allegations have hurt the government.