North Block Versus Mint Street
Two years at the receiving end of public anger over demonetisation, the RBI hurtled into another tumultuous period, ending the year with public spats with the government, internal disputes and a pre-mature exit of its governor.
Urjit Patel, the ‘chosen one’ who replaced Raghuram Rajan, resigned citing ‘personal reasons’. The reticent Oxford scholar, who implemented the mid-night demonetisation of high-denomination currency notes in 2016, decided to hang his boots after a protracted battle with the government over central bank’s autonomy.
Patel’s resignation was preceded by a month of uncertainty over reports that the NDA government was looking to invoke Article 7 of the RBI Act. The statute, used in the rarest of the rare case, authorises the Finance Ministry to issue directive to the central bank in ‘public interest’.
RBI as an institution reacted through an emotive public speech by deputy governor Viral Acharya, baring sharp differences with the political executive. The speech was countered by RSS ideologue S Gurumurthy, appointed to RBI board by the Narendra Modi government earlier this year. Acharya’s attempt to reclaim autonomy was preceded by reports of the government seeking transfer of RBI reserves worth approximately Rs 3.5 million to the government chest.
The RBI and government also came under public and legislative scrutiny by various parliamentary committees. The Standing Committee on Finance on many occasions sought to know from the RBI governor the impact of note-ban on economy and people at large. The government finally had to admit under parliamentary questioning that most of the invalidated currency had come back to the RBI.
RBI’s regulatory mechanism was tested again when Infrastructure Leasing & Financial Services (IL&FS) crisis broke out. The apex bank was a principal regulator for IL&FS, a semi-private financial institution that had to be taken over recently by the government to avoid India’s ‘Lehman moment’.
This is not the first time North Block and the Mint Street have faced off to protect their respective turfs. But in the past, the executive and the central banker resolved their differences behind closed doors.
Seeking to leave behind the controversy in 2018, the government appointed former economic affairs secretary Shaktikanta Das as the new RBI government. The choice of a former bureaucrat with an academic background in history to succeed a string of economics scholars, however, led to more ridicule.
CBI Versus CBI
October 20 saw the CBI lodge a corruption FIR against one of its own — special director Rakesh Asthana. This sparked off one of the ugliest power tussles in the country’s premier investigating agency, one that is being carried forward to 2019 as well. Both Asthana and then CBI chief Alok Verma are legally fighting the government order effectively exiling them.
The episode saw several firsts —CBI raiding itself, the CBI chief being sent on indefinite leave, the CBI chief's residence being allegedly being snooped on by the Intelligence Bureau, the CBI director talking about the "influence" exerted by the government, a CBI officer alleging direct interference of National Security Advisor Ajit Doval, two states preemptively withdrawing permission to the CBI to search and probe. Even the CVC, which was supposed to play referee, became subject to scrutiny. Eventually, a retired judge, AK Patnaik, was appointed by the Supreme Court to oversee the CVC investigation.
The saga played out in public and sparked off several hashtags and memes. Some called #CBIvsCBI an “ominous tragedy”. For others, it was a “big rot at the very heart of the premier investigating agency”.
Even the statement issued by the Department of Personnel & Training (DoPT) justifying a midnight reshuffle of the CBI top brass, which brought in Nageshwar Rao as interim chief, admitted to “a potential loss of credibility and reputation”.
The extent of the damage went beyond Delhi with West Bengal and Andhra Pradesh withdrawing prior permission to the CBI to operate within their borders. Other opposition-ruled states may follow suit in the coming year.
Taunted as the ‘caged parrot’, the CBI is reportedly probing over two dozen cases of financial bungling in which some senior opposition leaders, including RJD supremo Lalu Yadav and son Tejashwi, TMC leader Sudip Bandopadhyay, Congress leaders and former CMs Bhupinder Singh Hooda and Virbhadra Singh, and AAP leader and Delhi health minister Satyender Jain, are under the scanner.
An explosive allegation by the opposition further politicised the mess. Some parties claimed that Alok Verma was being ‘targeted’ for going through files on the multi-billion dollar Rafale deal.
While the legal and political battle drags on, the CBI’s credibility lies in tatters.
Judges On Warpath
In an unprecedented move this year, four senior-most judges of the Supreme Court called a press conference to address the nation directly.
On the cold winter morning in January, Justices J Chelameswar, the senior-most judge after then Chief Justice of India Dipak Misra, read out a statement in the sun-kissed lawns of his official residence in the capital. Flanked by justices Ranjan Gogoi, Madan B Lokur and Kurian Joseph, Chelameswar said the administration of the court under the then CJI was not in order.
The judges contended that though the CJI is the master of the roster, he is "only the first amongst the equals — nothing more or nothing less”.
The ‘rebellion’ was apparently triggered by the allocation of a PIL, which sought inquiry into the death of special CBI judge BH Loya, to a junior bench. Judge Loya was hearing the politically sensitive Soharabuddin Sheikh encounter case in the days before his death.
The first-of-its-kind press meet was the culmination of underlying tension and strained ties in the top judiciary for a good six months before the ‘rebellion’.
One of the flashpoints was the Medical Council of India bribery case, wherein which Justice Chelameswar had passed an order in November 2017 to set up a Constitution Bench of five senior-most judges of the Supreme Court. The petitioner had prayed before the court that CJI Misra should not be part of the bench.
But even as Justice Chelameswar sought to pass an order directing the formation of a Constitution Bench, the then CJI, citing his powers as ‘Master of the Roster’, delivered an order allocating the case to another bench.
The conflict in the highest judiciary reached Parliament when opposition parties started seeking support for their petition to impeach Dipak Misra.
Seven parties, including the Congress, moved the motion against the then CJI in the Rajya Sabha.
Though the impeachment motion collapsed in the Upper House, the differences within the highest court of the land were out in the open.