U.P. government in trouble over MGNREGS funds

Centre favours CBI inquiry into alleged misappropriation of funds

With the Congress-led Union government favouring a CBI enquiry, in its affidavit before the Lucknow Bench of the Allahabad High Court, into embezzlement in Mahatma Gandhi National Rural Employment Guarantee Scheme funds, trouble is apparently brewing for the BSP government under Chief Minister Mayawati, who is already bearing the brunt of the NHRM scam in poll-bound Uttar Pradesh.

The Centre filed the affidavit on Tuesday in response to a show cause issued by the High Court in connection with a PIL filed before it seeking a CBI probe into the misappropriation of funds by authorities in the State where polls have been notified and are to be held in seven phases. The next hearing has been posted to January 30.

“It is imperative to have a preliminary enquiry conducted by an independent agency like the CBI,” the Union Ministry of Rural Development categorically stated. If the court so desired, “such an enquiry may be ordered.”

The Ministry informed the court that its efforts to seek the concurrence of the State government to agree to a CBI probe had met with failure. The affidavit said Union Minister of Rural Development Jairam Ramesh wrote twice to the Chief Minister seeking her approval for the probe, but the latter declined permission.

The affidavit underlined the Centre's limitations in ordering a CBI probe, without the concurrence of the State government, into the anomalies reported by, among others, State-level quality monitors. Under the Delhi Police Establishment Act, in the absence of consent from the State government, the only other option for a CBI probe could be on the orders of a constitutional court like the High Court.

The Ministry has appended the correspondence exchanged between Mr. Ramesh and the U.P. government and the reports by competent bodies establishing grave irregularities and misappropriation of funds by authorities responsible for implementation of MGNREGS in districts such as Mahoba, Balrampur, Gonda, Kushi Nagar, Sonbhadra, Sant Kabir Nagar and Mirzapur.

The present CBI probe into the NRHM irregularities was ordered by the High Court. The scam led to the murder of two medical officers, while an engineer attached with the scheme committed suicide.

The Chief Minister, while turning down the request for a CBI probe into MGNREGS funds, complained to Prime Minister Manmohan Singh that Mr. Ramesh was indulging in politics and breaching the federal structure.

Ms. Mayawati has dismissed several Ministers in the past couple of months for their involvement in the NRHM scam in an apparent bid to refurbish her image in the Assembly elections.

Mr. Ramesh, in his letters, accused the Chief Minister of allowing misappropriation of MGNREGS funds by not taking any action against those allegedly found in the wrong by various probes.

On Day 2 of UP yatra, Rahul Gandhi targets Mayawati again, says Centre's funds not reaching poor

  On Day 2 of his Uttar Pradesh yatra, Rahul Gandhi once again took on Chief Minister Mayawati. Addressing a rally in Bahraich district, he alleged that the Centre's funds were being siphoned-off in the state. "Centre's funds meant for the poor in the state are not reaching them," he said. He then added that Mayawati "does not bother about" what was happening in her state.

Targeting the UP Chief Minister and Samajwadi Party chief Mulayam Singh Yadav, Rahul Gandhi also said that they have "forgotten about the people after becoming big leaders and they don't feel for them".

"They (Mayawati and Mulayam) have become big leaders. They can travel in helicopters. But they do not feel angry now when they see sufferings. They do not feel anything when farmers' land is taken away. I have learnt many things from Mulayamji. But he does not come to you. His anger (against injustice) is over," he added.

The Congress General Secretary started his Jan Sampark Yatra from Barabanki yesterday, where he explained his controversial remark on Uttar Pradesh migrants "begging for work in other states."

At a rally in Phulpur in Uttar Pradesh a week ago, Mr Gandhi had told the thousands that had gathered that their state was regressing under the leadership of "the mafia" who runs the state. "How long will you beg in Maharashtra (for work)? How long will you work as a labourer in Punjab? It will take only five years and the change will come," he said, asking the crowd to give the Congress "a chance for five years."

The statement drew flak from almost all political quarters including Congress's ally NCP. Explaining his remarks, Mr Gandhi said yesterday, "People sat in studios and criticised me, but I will ask them to speak to the children on the traffic signals. They will tell you that they are from UP."

Emphasising that his party wanted to change Uttar Pradesh for the better, Mr Gandhi said he was angry that the state was lagging behind when other parts of the country were moving ahead at brisk pace.

"People from UP are going to Maharashtra, Haryana, Delhi. You drive a taxi in Maharashtra, you build roads and metro in Delhi...our state is now lagging behind. We have to bring it back on track," he said.

Mr Gandhi is on a five-day yatra in UP. He will next visit Shravasti, Siddharth Nagar and Kushinagar and meet party workers. (With PTI inputs)

Sensex, Nifty crash to near 2-year lows amid foreign funds exodus

Indian markets crashed Wednesday as the benchmark indices broke major support levels plunging to near two-year lows. The Sensex and Nifty were the worst performers among all Asian indices, falling nearly 3 per cent.

A slowdown in economic growth in the US, which is the world's biggest economy, led to risk aversion across the globe. Weakness in Chinese manufacturing data further raised concerns of another global recession.

At 1304 hours, the Sensex was down nearly 450 points to 15,614 while the broader Nifty index declined 130 points to 4,682. The Nifty has fallen below the 4,700 mark for the first time in over 18 months. The Nifty last traded below 4,700 levels on 8 February, 2010.

Analysts said the selloff was driven by foreign institutional investors (FII), who fear a slowdown in the country's economy and a possible downgrade by major rating agencies soon.

"The underlying retail investors in the western world are pulling out money from the risk assets, whether in the emerging markets or developed markets... FII fund managers have to find cash for which they have to sell," Saurav Mukherjea of Ambit Capital said.

"The currency factor is clearly not helping. It has really hurt investor returns. What is causing the sellout is that they (FIIs) don't see any reason for the rupee to pullback to 45," he added. The rupee has fallen nearly 14 per cent in the last quarter alone. However, the currency was trading higher today, possibly on the back of intervention by the central bank.

Technical analysts anticipate further weakness because key levels have been broken. "4,720 was a strong support and once it was taken off the markets are witnessing a cascading effect. The Nifty can fall 200 points now as supply will overpower demand," Kiran Jadhav of Precision Technicals said.

The volatility has increased ahead of the derivatives expiry on Thursday. The National Stock Exchange (NSE) volatility index was up nearly 14 per cent. "Intraday you might get some scare but you might want to test it further," Independent analyst Sarvendra Srivsatava said.

Banking stocks saw the steepest cuts, falling over 3 per cent. HDFC Bank plunged 5 per cent. ICICI Bank was down 3.5 per cent.

Energy and IT stocks also slumped nearly 3 per cent. Most other sectoral indices were trading with over 2 per cent cut.

Barring Cipla, all other stocks were down on the Sensex. Jaiprakash Associates, Bharti, JSPL, BHEL and Reliance were trading with over 3.5 per cent cuts. RCom was the only stock trading higher on the 50-stock Nifty index. It rose after three officials of Reliance ADAG were granted bail by the Supreme Court earlier today.

The market breadth had collapsed with an overwhelming 90 per cent stocks falling on the broader BSE 500 points.

Among large cap stocks, government owned oil major ONGC, India's largest PSU bank SBI, private sector lender ICICI Bank and Axis Bank made new lows today.