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The Income Tax raids on Karnataka Energy Minister Mr. D K Shivakumar, his relatives and business partners lasted a good four days. According to various reports, anywhere between 9CR & 300CR of cash was confiscated during the raids. Also, seized were documents of many properties owned by the Minister, his relatives, and aides across India and various cities abroad. Adding to the complication was a fresh complaint by Mr. Gururaj, a resident of Ramanagara, that Mr. D K Shivakumar converted Rs 2000CR using fraudulent methods during demonetization. On record, both the Minister and his brother, a Member of Parliament, have denied acquiring illegal wealth. Both are ready to prove to the IT Department that all their business dealings and conduct are well within the legal framework of the Constitution.
Only two events in the coming days will have severe political repercussions for the Congress party – the arrest of Mr. D K Shivakumar and/ or defeat of Mr. Ahmed Patel in the upcoming Rajya Sabha election.
Increasingly to a layman, Mr. D K Shivakumar’s amassing of wealth and modus operandi resembles that of former Finance Minister Mr. P Chidambaram and his family’s acquisition of ill gotten wealth. As and when IT officials register “Panchanama” (statement of persons present at the time of search and seizure) along with necessary documents for court proceedings, details of bank accounts and properties in the possession of Mr. D K Shivakumar and his family across the globe can be confirmed. If rumors are to be believed, like Mr. P Chidambaram and family, Mr. D K Shivakumar and family might face prosecution under the new Black Money Act and Benami Properties Act.
Will the meticulous planning and coordinated efforts of the IT Department in conducting raids across multiple properties and several cities yield results? Meager civil penalties on unexplained income will cause much consternation to the IT Department. It will give rise to suspicion of the invisible hand of the Central Government on political opponents. Unlike the United States, where tax evasion can be considered a criminal activity and leads to criminal penalties, in India, even with the introduction of New Black Money Act and Benami Properties Act, penalties are minimal. Moreover, both these laws are yet to be tested in Courts. With a broken justice system, combined with the poor record of prosecution of Enforcement Directorate (ED) and Income Tax Department, it will take a lifetime to take this case to a logical end. In that sense, Mr. D K Shivakumar might escape tough penalties and jail time.
As far as politics goes, there has been much noise about the raids and nothing more. Proclamations and counter statements from Congress and BJP about the timing of raids including accusations of “political vendetta” are common parlance in political circles. Only two events in the coming days will have severe political repercussions for the Congress party – the arrest of Mr. D K Shivakumar and/ or defeat of Mr. Ahmed Patel in the upcoming Rajya Sabha election.
The arrest of Mr. D K Shivakumar will be a body blow to Karnataka Congress and will mightily dent the party’s prospects in the assembly election. The Congress Government is already facing several accusations of corruption at high places in the State. At the start of government formation in 2013, Mr. Siddaramaiah to gain credibility after winning an absolute majority did keep some of the powerful leaders who faced corruption charges out of his cabinet. One of them was Mr. D K Shivakumar who was later inducted in his Cabinet as Karnataka Energy Minister supposedly at the behest of Congress high command. If the ED finds enough evidence for interrogation, an arrest will be inevitable. It will not only put a question mark on Mr. Siddaramaiah’s cabinet but will surrender the “fighting corruption” issue on a platter to opposition parties. Another upheaval in Congress party will be the dilemma in choice of candidates in constituencies where the Karnataka Energy Minister wields considerable influence. Unfortunately, BJP cannot take advantage of the commotion in these constituencies, since most them are in old Mysore region where the party is weakness personified and has very little presence.
The defeat of Mr. Ahmed Patel in the Rajya Sabha election will be a loss of face for Congress at the national level and might make the already weak Congress plummet further in the eyes of Gujarat voters. But it will neither have an impact on Karnataka Congress or dent Mr. Siddaramaiah’s chances of retaining power in 2018. With Congress party having no chance in Gujarat election, the best hope is that the IT case against Mr. D K Shivakumar is weak and puny.
Prime Minister Modi and the BJP Party President must realize that IT raids cannot clean up or reduce black money in politics. The need of the hour to reduce corruption and lower the influence of money power is to enact political reforms. For a start, political parties must end party hopping of MPs and MLAs. A simple step like making a five-year party membership compulsory for a party ticket to contest election will end MPs and MLAs scouting for opportunities just before an election. BJP with its pan-India strength can quite easily enact this within the party forum and become the torch bearer of political reforms. More important reforms that require legislation can follow, that will eventually lead to India becoming a model democracy for other nations.
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