May 30, 2020
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'The Tapes Show How Those Who ­Operate The System At The Highest Level Are Compromised. It's Disturbing.'

Yashwant Sinha lashes out at the system and makes some startling revelations on how the Atal Behari Vajpayee cabinet functioned

'The Tapes Show How Those Who ­Operate The System At The Highest Level Are Compromised. It's Disturbing.'
Photograph by Sanjay Rawat
'The Tapes Show How Those Who ­Operate The System At The Highest Level Are Compromised. It's Disturbing.'

Yashwant Sinha has broken the omerta that the government, the opposition and the media have followed on the Essar tapes. In a free-wheeling discussion with Meetu Jain, Sinha, who was finance minister in NDA-I, lashes out at the system being “compromised at the highest level” and doesn't spare the corporates that conspired to get him out of the finance ministry. In the process, Sinha, who was elevated to the BJP’s “margdarshak mandal” as he was over 75, makes some startling revelations on how the Atal Behari Vajpayee cabinet functioned. Excerpts:

Let’s start with the Essar tapes. You were finance minister for the better part of NDA-I. How much of what was happening was in your knowledge?

Whatever I say about the tapes is presuming they are genuine and true. They are disturbing at the least. They present a grim picture of the manner in which the system is compromised, how the people operating the system at the highest level are compromised, how vested interests can approach people in government for their own benefit, how corporate rivalry exists and how this rivalry is taken to a level where they are unashamedly spying on each other, with the idea of using it to blackmail each other. This is the tip of the iceberg. We don’t know how the system was being compromised in the past or how it is being compromised today.

You are levelling a very serious charge. You are saying your own government was compromised at the highest level.

Your magazine carried a conversation around an allegation that directly affected me. A certain corporate house in India off­loaded shares worth Rs 1,900 crore within one week through its companies operating in the stockmarket and brought the market down.  It was this market crash that created several problems, including the UTI crisis.

You are talking of the Ketan Parikh scam…

I am talking of the so-called Ketan Parikh scam and the so-called UTI scam on which a JPC was constituted and, according to the tapes, even the members of the JPC were compromised to conceal the information that a certain corporate house had done this. What can be more scandalous than this?

As finance minister, you wouldn’t be able to influence a parliamentary committee.But the stockmarkets and especially SEBI comes under you. What did you do to stop this manipulation?

I recall that I had just presented the budget of 2001-02 and it was extremely well received. And that further established me in the finance ministry. What would this market crash, which was obviously manipulated, show?

Who do you think manipulated it?

Your magazine mentions it.


“A misdeed was done and it remains under wraps. Even at this late stage, the ­market crash should be probed, I feel, and the guilty brought to book.”

Your magazine mentions it. Why would anyone be interested in bringing down the markets after such a good budget, except to give me a bad name? The US-64 crisis was entirely on account of the crash in the market. One would have expected the JPC to question the people concerned and make inquiries. Nothing of the kind came out. A misdeed was done and it remains under wraps. Even at this late stage, the market crash should be probed, I feel, and the guilty brought to book.

Did you ever have a whiff of SEBI being managed?

No, I trusted SEBI and its chairman. I felt he could not be manipulated.

It is hard to believe there was no ­int­elligence on what was happening.

There was no intelligence, nothing on record. I don’t remember anyone pointing out that SEBI or the markets were being manipulated.

You were ultimately shifted out. Did it have something to do with some corporates not being happy with you?

Some corporate had reason to be unhappy particularly in 2001-2002. They could not get me shifted on the basis of bad work in the ministry. They could only get me shifted by giving me a bad name and that’s what they tried to do. I wouldn’t put it past them to get me shifted.

And do you think they succeeded?

To a certain extent yes.

Vajpayee was seen as Teflon-coated, but was he really the Dhritarashtra of the government? Didn’t he turn a blind eye to corruption?

I can tell from personal experience that the moment he found out that something was amiss, he would take action.

For example?

For example, the shifting of Pramod Mahajan from telecom. If he had no interest, why would he be shifted? And why bring in a person like Arun Shourie?

Was Vajpayee sitting in a cesspool?

I wouldn’t say that. But there are things that I have mentioned in my book. For instance, on the day I was going to move the finance bill in the Lok Sabha, I got a call from a  very senior colleague who was supposed to be very, very close to Vajpayee. He said, “Yashwant, the prime minister has told me this particular duty issue is to be tweaked in this manner.” The moment this suggestion was made, I knew who it was going to benefit. It was going to benefit one corporate house. I rushed to the prime minister and asked him if he had made this suggestion. He said no. So I ignored that piece of advice.

Corruption in the UPA was a key political plank of the BJP in the 2014 election. How was the alleged corruption in NDA-I different from that in the UPA regime?

Where is the corruption? It doesn’t merely show corruption in the government. It shows corruption in the system. Don’t politicise the issue. We are talking of how the system has been compromised. It is not a question of UPA or NDA.

What should be done about the tapes?

A forensic laboratory should verify whether these tapes are genuine or doctored and, if they are genuine, then we should pick up the issues that the tapes mention and there should be a court-­monitored Special Investigation Team.

What you are saying is clear as daylight. But why, then, has the government sent the complaint to the attorney-­general for his opinion?

The legal position is clear. It is not an authorised tapping. It is a violation of the Indian Telegraph Act. It is one corporate house tapping another, and also tapping the government at the same time.

So what legal opinion do you need? Is the government dragging its feet?

I have no reason to arrive at that ­conclusion yet.

On foreign policy and NSG, have we been trounced by Pakistan and China?

“Where is the corruption? It doesn’t show ­corruption in the ­government alone, but how the system has been compromised. It’s not about UPA or NDA.”

On the NSG, I would say that in view of the very clean waiver we got in 2008, we have already got everything we could have needed to get from the membership of the NSG. So the membership of the NSG is not as critical as is being made out today. We won’t get E and R technology even if we join now because we are a non-NPT ­nation. It will actually lead India to a ­position of a second-class member in the NSG. Also, the first lesson of diplomacy is that we should never show undue eagerness to get something. Here we went out of our way to show our extreme eagerness to join the NSG as a member.  Moreover, we hyphenated ourselves to Pakistan when Sushma Swaraj went out of her way to say that we have no objection to Pakistan also being included as a member of the NSG. Why should we plead for Pakistan? Why should we go back to the Nixon-Kissinger era of hyphenation of India-Pakistan, something that we had moved away from with a lot of effort in the last many years. Our approach was somewhat faulty.

The prime minister is de facto external affairs minister, having toured more countries than most prime ministers. So who should take the blame for this faulty foreign policy?

Prime ministers, from Nehru onwards, have been extremely active on the foreign policy front.  The PMO works in tandem with the external affairs minister and, therefore, foreign policy ­bec­omes a joint responsibility. The foreign minister is, and should be, as much inv­olved as the prime minister.

Or, one could equally say, as much faulted.

Ha…! (Chuckles)

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