NSEL Crisis : Can Government Committees Really be Unbiased?

If one reads the book The Target Book by Shantanu Guha Ray, you would understand the prejudiced manner in which Government appointed committees function. These committees are mere puppets in the hands of their powerful political masters. One such committee appointed by the Government to decode the NSEL crisis was the Mayaram Committee. However, the partisan manner in which the committee functioned raises doubts on its integrity.

In August 2013, the Centre constituted a high-level committee chaired by Economic Affairs Secretary, ArvindMayaram, to look into the issue of NSEL failure and recommend measures to fill the gaps in the oversight of spot exchanges.

The Mayaram Committee seen as a ray of hope by NSEL and its parent company — FTIL, to resolve the matter to some extent, however, played a biased role in giving its report to the PMO. The findings and recommendations of the report were solely targeted towards NSEL, completely ignoring the dubious role of the FMC, brokers and defaulters. This clearly indicated that the committee was merely set up to dramatize the NSEL crisis to force FTILout of all exchange businesses. The Committee did not utter a word on (brokers & defaulters) who created and perpetrated the crisis or recommend any action to recover it from them. It referred to public interest but did not recommend any measures towards recovering the money from the 24 defaulters who had admitted to the FMC in a public durbar and even agreed to pay back in a phased manner.

One critical fact that raises eyebrows is that normally high power committees like these are given three or more months to submit reports but the Mayaram Committee was told to do so within two weeks! It submitted its report on September 23, 2013, leaving a question mark as to how it could so quickly study the voluminous documents given to it by the FMC, NSEL and other departments, undertake consultations from top officials from the various apex agencies, gather data, etc. The Committee recommended only one thing: action against NSEL, its directors and promoters! This was despite the fact that it admitted that the NSEL crisis would not lead to any systemic impact.

If truth is what you believe in then go read the book ‘The Target’.

Reference — ShantanuGuha Ray:(2016): The Target’: New Delhi: Publisher: AuthorsUpfront

For more information check The Target Book Reviews.

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