Business Of The Day

Nation PARLIAMENT n the last session of the Lok Sabha, TDP member from Khammam, Andhra Pradesh, Namma Nageswara Rao, raised a question related to highways. “Whether the Government proposes to start eight-lane express highways. If so, the details thereof along with the locations,” he quizzed the minister for road transport and highways. It can be passed as one of the dreary queries in Question Hour, until we look closely at the member. Nageswara is not your ordinary MP. A non-executive chairman of Madhucon, his group has the National Highways Authority of India (NHAI) on its client list.

I THE DAY Conflict of interest becomes a serious matter of parliamentary ethics as more and more businessmen and industrialists pack influential House committees

Another Lok Sabha member, Sambasiva Rayapati Rao (Congress), with interests in tobacco and the construction sector, sought the Government views on the hybrid model in highway projects, which allows concessionaires to collect toll. On another day, the tobacco industry took priority, when he wanted to know whether the Central Tobacco Research Institute is exploring “the beneficial uses of tobacco”. Some members are participating in parliamentary debates, raising questions and enjoying membership of the all-powerful committees without giving the nation much chance to know about their personal interests. Parliament debates make many wonder whether the members are

pursuing their own businesses rather than issues of national interest. The conflict of interest is difficult to detect without a strong parliamentary mechanism to define interests and oversee the growing number of legislators with business interests. Parliamentary committees are where the real “conflict” can take place. The 31-member Standing Committee on Finance is virtually an industry who’s who—venture capitalist Rajeev Chandrasekhar (Independent) from Karnataka, chief-ministerhopeful of Andhra Pradesh and business magnate Y.S. Jaganmohan Reddy (Congress), Maharashtrabased industrialist Vijay Jawaharlal Darda (Congress), Sambasiva Rayapati and industrialist Magunta

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Tamil Nadu educationist M. Thambi Durai (AIADMK). Parliamentary committees are not just talking shops. The Standing Committee system is a path-breaking endeavour of parliamentary surveillance over administration and it may even include high-ranking officials from the executive. The Standing Committee on Health has at least three members who run medical education institutions—Prabhakar B. Kore, the BJP MP from Karnataka, is chairman of the Karnataka Lingayat Education Society, which runs 18 medical science institutions; MAM Ramaswamy of the Janata Dal(S), Rajya Sabha member from Karnataka, is pro-chancellor of the Annamalai University, which also has

Conflict of interest is a developing situation. It has not become embedded in procedures. There should be a mechanism to encourage the members to declare their interests.

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Business of

By Shafi Rahman

KARAN SINGH, Chairman, Ethics Committee

Srinivasulu Reddy (Congress) from Andhra Pradesh. The 26-member Standing Committee on Industry has Uttar Pradesh businessman Akhilesh Das (BSP) as its chairperson; perfume baron Badruddin Ajmal (AUDF) and Andhra Pradesh textile manufacturer Gireesh Kumar Sanghi (Congress) are its members. Over a third of the members of the committee on industry— nine out of 26—are from business and industry. The Public Accounts Committee boasts of members like industrialist Navin Jindal (Congress), Andhra Pradesh-based contractor Kavuri Sambasiva Rao (Congress) and

Over a third of the members of the Standing Committee on Industry—nine out of 26—are from business and industry.

The number of MPs in the present House who are industrialists and businessmen is 100—double the number in the first Lok Sabha.

medical institutions, including a medical college, and Wardha’s Congress MP Datta Raghobaji Meghe is the president of the Radhikabai Meghe Memorial Medical Trust that manages a deemed university, the Datta Meghe Institute of Medical Sciences. The 21-member Committee on Public Undertakings (COPU) has eight businessmen as its members. The committee came under the scanner when it summoned the authorities of the NHAI and sought an explanation about its working. Incidentally, three of its members—T. Subbirami Reddy (Congress), Nageswara (TDP) and

Only 212 of the 250 Rajya Sabha members have listed their interests.The Lok Sabha does not even maintain such a record.

Unlike in many other democracies, there is no mechanism to monitor members’ conflict of interest on a day-to-day basis.

SAURABH SINGH/www.indiatodayimages.com

NOVEMBER 23, 2009 ◆ INDIA TODAY

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Nation

PARLIAMENT

Questionable Questions QUESTION OF INTEREST Q Whether the NHAI has recently sought comments of various stakeholders on hybrid models to implement highway projects. If so, the details thereof along with the views of the various parties involved.

QUESTION OF INTEREST Q Whether the Government proposes to empower the NHAI to extend working capital loans to road developers to help them tie over credit crunch and maintain speedy implementation of road projects.

QUESTION OF INTEREST Q Whether the Central Government proposes to give some concessions to small power units generating 25 MW of power. If so, the details thereof; and if not, the reasons for not giving concessions.

QUESTION OF INTEREST Q Whether the Government proposes to start eight-lane access control express highways. If so, the details thereof along with the locations where the expressways are proposed, state-wise and national highway-wise.

SAMBASIVA RAYAPATI RAO

KAVURI SAMBASIVA RAO

RAJAGOPAL LAGADAPATI

NAMMA NAGESWARA RAO

Lok Sabha, Guntur,Andhra Pradesh (INC)

Lok Sabha, Eluru,Andhra Pradesh (INC)

Lok Sabha,Vijayawada,Andhra Pradesh (INC)

Lok Sabha, Khammam,Andhra Pradesh (TDP)

BUSINESS INTERESTS He owns the Jayalakshmi Group of companies which deals in tobacco, yarn, export of spices, production of electricity and construction of roads

BUSINESS INTERESTS The Andhra Pradeshbased builder is engaged in construction of major projects on irrigation, road, power and multi-storied urban housing complexes

BUSINESS INTERESTS He is the founder chairman of the Lanco Group which has interests in construction, power and property business. Member of CoPU, his Group’s client list includes the NHAI.

BUSINESS INTERESTS Non-executive chairman of Madhucon, his Group has the NHAI and Indian Oil Corporation on its client list. He is also a member of the Committee on Public Undertakings.

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trialist Rahul Bajaj (Independent) took part in a discussion on job losses. “For creating jobs, you have to relax some labour and contract legislations. Then, we in the organised sector will give higher wages,” he said. At this, Karat intervened saying how the industrialist could ask for “labour laws to be scrapped”. Bajaj shot back, “We (businessmen) have the right to express our views.” K. Rahman Khan, the deputy chairman presiding over the proceedings, tried to settle the issue by saying, “He (Bajaj) is creating jobs”. Khan has only good humour to rely on, except for some wobbly rules and conventions. In India, disclosure of interest is often mired in piecemeal reforms. It has been ruled by the chairman of the Rajya Sabha that a member having a personal pecuniary or direct interest in a matter decided by the House has to declare the nature of that interest. The Rules of Procedure and Conduct

The rule can only say that the member has to declare the interest before he speaks in the House. You cannot throttle him. Speech is free in Parliament.

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INDIA TODAY ◆ NOVEMBER 23, 2009

FALI S. NARIMAN, Lawyer

of Business in the Lok Sabha prescribe that if the vote of a division member in the House is challenged on personal, pecuniary or direct interest in the matter to be decided, the Speaker can decide whether the vote should be disallowed or not. The only other restraint is in the relatively obscure Handbook of Members which says that a member having a conflict of interest in a matter to be decided by the House is expected, while taking part in the proceeding, to declare it. In the Rajya Sabha, there is a registry that maintains members’ business and professional interests. The registry, a commendable initiative by the Ethics Committee, is still not in the public domain and only 212 of the 250 members have listed their interests. The Lok Sabha is not even maintaining the register. In the UK, a member who has interests in a small manufacturing company has to declare those when speaking on certain economic matters concerning manufacturing and small businesses. Back home, the member’s pecuniary interest is not clearly defined leading to BrindaBajaj-style stand-offs. “I have every right to ask a question on tobacco, especially when its prices are falling. I am doing it because tobacco plays a

major role in livelihood in my constituency. Many industrialists ask somebody else to ask questions on their behalf. I am not doing it,” says Sambasiva. Even the precedence of involvement of members in conflict of interest is rare, which may be due to relatively fewer business interests of members in earlier years. In the first Lok Sabha, there were 52 MPs who were industrialists and businessmen; the number went up to 70 in the 13th Lok Sabha and 78 in the 14th, and has touched the 100 mark in the present House. In 2003, the Rajya Sabha witnessed a mild flutter when top hotelier and independent member Lalit Suri asked then finance minister Jaswant Singh about a proposal to impose uniform luxury tax on hotel industry. Singh, instead of answering the question, chose to lecture: “The convention of the House is, where there is a conflict of interest, the honourable member shall not make an inquiry inside the House. As the honourable member is a prominent hotelier and therefore, I would say the question relating to the industry would, under normal circumstances, fall in the category of conflict of interest.”

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There is also a tendency now to read out written speeches in Parliament. This, in some way, raises the doubt that speeches are prepared by others, possibly by business groups.

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Rajagopal Lagadapati (Congress)— are closely involved with road construction projects. The NHAI had sent notices to Madhucon Projects and Progressive Constructions for delaying work on some stretches of the Lucknow-Muzaffarpur road project. While Nageswara is a member of the COPU, Kavuri Sambasiva, founderchairman of Progressive Constructions, is member of the Public Accounts Committee. The 513-km World Bank-funded project, covering 12 road stretches in Uttar Pradesh and Bihar, is worth Rs 3,038 crore. Committee Chairman Kishore Chandra Deo has now asked them to declare their business interests, a first in the parliamentary history. The other committees are yet to come out with any such directive. Recently, tempers ran high in the Rajya Sabha when CPI(M) leader Brinda Karat repeatedly intervened, citing conflict of interest, when indus-

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MPs who are supposed to take up people’s ca uses mostly end up taking their own

P.J. KURIEN, Member of vice-chairman’s panel in the Rajya Sabha

In many democracies, there is a mechanism to monitor and assess the conflict of the member’s interest. Meghe says he is yet to assess if his role in the department-related committee on health amounts to conflict of interest or not. “This is a developing situation. It has not become embedded in procedures. Frankly, many members are not cognisant on this matter. We are doing it gradually. There should be a mechanism to encourage the members to declare their interests before they speak,” says Karan Singh, chairman, Ethics Committee, who set an example recently by declaring his son’s interest in the tourism business before speaking in the Rajya Sabha on it. Others argue that second jobs of MPs help them make qualitative inputs. “We have required expertise in the sector, which will help enhance the quality of debates. Businessmen

can’t be denied their say in Parliament,” says Nageswara, who was recently caught in the CoPU standoff over conflict of interest. Kore also says his experience in the health sector will help the committee to perform and that there is no conflict of interest in his case as his chairmanship is not remunerative. By raising the issue of conflict of interest, nobody is trying to claim scalps but seeking to ensure that the audience be given a chance to form a balanced judgement of the members’ arguments. Khan says it is difficult to regulate the members through law, but they should pursue their moral obligation to declare their interest as advised by the Ethics Committee. “It is not law. It is a code of conduct. It is an advisory,” says Khan. He himself was officiating the House when Parimal Nathwani (Independent), who was associated with Reliance, took part in a discus-

NOVEMBER 23, 2009 ◆ INDIA TODAY

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Nation PARLIAMENT

Clash of Interests MPs with a business agenda are members of various panels T. SUBBARAMI REDDY

DATTA RAGHOBAJI MEGHE

Rajya Sabha,Andhra Pradesh (INC)

Lok Sabha,Wardha, Maharashtra (INC)

BUSINESS INTERESTS

BUSINESS INTERESTS

With assets worth Rs 239.6 crore, he built the Gayatri Group, now headed by his wife, which has interests in infrastructure, steel, power and mines

The four-time MP is the president of the Maharashtra-based Radhikabai Meghe Memorial Medical Trust. His declared assets are worth Rs 35 crore.

MEMBER OF....

MEMBER OF....

the Committee on Public Undertakings, though his Group has public sector units as its clients

the committee on health and family welfare, though he manages a trust that runs medical colleges

PRABHAKAR B. KORE

BADRUDDIN AJMAL

Rajya Sabha, Karnataka (BJP)

Lok Sabha, Dhubri,Assam (AUDF)

BUSINESS INTERESTS

BUSINESS INTERESTS

Chairman of the Karnataka Lingayat Education Society, which runs no less than 152 institutions right from kindergarten to the postgraduate level

The perfume baron is the chairman of Ajmal group of companies with interests in textiles, leather, properties, rubber plantation and cosmetic industries

MEMBER OF....

MEMBER OF....

the committee on health and family welfare; his society runs a number of medical institutions

the Standing Committee on Industry, he is the lone member of the AUDF in Parliament

sion on the Reliance gas-sharing issue. But Nathwani chose to declare before his speech that he was associated with RIL. This prompted Karat to write to Chairman Hamid Ansari asking him to disallow members who have such links from participating in discussions on related issues. “He was only adhering to the advice of the Ethics Committee by declaring his association. If a member has an interest, he has to declare it. You cannot prevent a member from speaking in the House,” Khan said. To find a solution, India may look

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INDIA TODAY ◆ NOVEMBER 23, 2009

to the United Kingdom for answers. In the House of Lords, the members have to declare their interests suo moto when speaking in the House. Even paid visits in the UK and overseas are to be registered. Consider an earlier entry by British Prime Minister Gordon Brown in the registry of members’ interests when he was just an MP: “On accompanying visits to Washington, New York and Sydney in September, my wife and baby were upgraded by Virgin Atlantic Airways.” The arrival of industry captains

has made Parliament take a lenient view on the issue. To retain respect for the House, the presiding officers of both the Houses should be offered a set of toothy rules. “The current set of rules is not strong enough. There is hardly any mention of any punitive action against the MPs who refuse to divulge their interests,” says Anil Bairwal of the Association for Democratic Reforms. A mechanism should be evolved to cross-check details of members in the interest registry in the Rajya Sabha and make MPs declare the source of wealth or their changing business interests. The Rajya Sabha members’ registry needs to go online as the present system of stonewalling information negates the concept of scrutiny.

T

he members, before they speak in the House, should feel a moral compulsion and suo moto declare their interests. The Lok Sabha, on its part, should rush to prepare its own members’ interest register. A monitoring mechanism should also be put in place, like in Canada, to look into the violations on a daily basis. Public confidence in the way parliamentarians discharge their duties depends, to a large extent, on the presumption that they will not deal with matters in Parliament in which they have a conflicting professional or personal interest. The answer can be found even in a historical quirk. As early as 1951, an investigation was held into the conduct of member of Parliament H.G. Mudgal, who acted on behalf of the Bombay Bullion Association, for extending favours to them in Parliament. Prime minister Jawaharlal Nehru summarised the issue succinctly, “I do submit that it has become a duty for us to be clear, precise and definite. The facts are clear and precise, and the decision should be clear, precise and unambiguous. And I submit, the House should resolve that member should be expelled from the House.” This piece of Nehruvian morality seems to have no takers in Parliament today. ■