Vote, but

No Vindication

ON

Vol

X V I I No 12

M a r c h 20, 1965

EDITORIALS
Vote, but No Vindication
New T u r n in Negro Struggle

503
505

WEEKLY NOTES
Development Rebate on Ships
Foreign Investment vs Loans
Consortium
Exercise Weil
Stocked, Indeed !Fertilisers
and Irrigation A Minister's
Statistics Voluntary Ceiling
on Profits Progress of Warehousing

506

LETTER TO EDITOR

Language and U n i t y

509

CAPITAL VIEW
Foreigners, the Only Experts
Romesh Thapar

511

BOOK REVIEWS
Heroic Statistics
A s h o k Rudra

513

Plight of Higher Education

Philip Altbach

515

SPECIAL ARTICLES
Political Leadership in India
V M Sirsikar
States' Tax Effort in T h i r d Plan
K Venkataraman
FROM

THE

517
523

CHAIR

Indian M i n i n g Association
Sen-Raleigh limited

529
535

AROUND BOMBAY MARKETS

Technical Rally

536

BUSINESS NOTES

Dalmia IronNational Rayon

J K SyntheticsAsian Cables
M a r t i n BurnUnited Bank
Greaves
Cotton Adarsh
Chemicals

538

CURRENT STATISTICS

540

THE ECONOMIC WEEKLY

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Monday morning the leader of the PSP group in the Lok Sabha moved
his motion calling upon the House to "express want of confidence in
the Council of Ministers for failing to uphold the highest standards of public
conduct by a deliberate suppression of t r u t h and by abuse of power by persons in authority in the State of Orissa and other States and having brought
into contempt the concept of constitutional government by putt i n g party interest over national interest and attempting to shield and exonerate those who were guilty of abuse of power by the refusal to institute
an enquiry against those who were responsible for such abuse of power and
corruption". On Tuesday afternoon, after two days of agitated debate, the
House rejected the motion by 315 votes against 44, This overwhelming affirmation of confidence in the Government reflected the Congress Party's overbearing majority in the House; it did not vindicate the Government's actions
in regard to the allegations of corruption against the Orissa Congress leaders,
Bijoyananda Patnaik and Biren M i t r a .
Such vindication was virtually impossible after the disclosure of the
report of the Central Bureau of Investigation on the allegations against the
Orissa ex-Chief Ministers and the findings of the Cabinet sub-committee on
i t . These documents, which the Government had refused to make public,
were placed before the Lok Sabha by H V Kamath, another PSP member,
a few days ago. The Government refused to take congnisance of the documents, but there appeared to be no doubt at all that they were genuine.
Indeed, while Government spokesmen were incensed that they should have
been made public, none categorically questioned their authenticity.
The C B I investigated, at the instance of the Home Ministry, the charges
against Patnaik and M i t r a and submitted its report in November last year.
These charges related principally to certain transactions of the Government of Orissa w i t h Kalinga Industries, a Patnaik concern with Mrs Patnaik
as chairman, and Orissa Agents, a proprietory firm owned by Mrs Biren M i t r a .
These transactions, in the consummation of which Patnaik and M i t r a were
alleged to have taken much personal interest during their terms of office,
resulted in the accrual of substantial Government business to the companies
and also in large over-payments at the expense of the State exchequer. Further, on November 17, 1961 the State Finance M i n i s t r y had issued a directive requiring Government departments to make all purchases only
through local dealers in Orissa. Ostensibly the purpose of the directive was
to prevent loss of State sales tax, but in effect it gave a v i r t u a l monopoly
to Orissa Agents for the products of Kalinga Industries and Kalinga Tubes,
another concern in which Patnaik is a director. Other allegations which the
C B I investigated related to Government transactions w i t h Patnaik Mines
and Orissa Textile M i l l s , two other concerns in which Patnaik is interested.
Some of the charges the C B I was unable to judge since all the evidence
was not made available to i t , but on the majority its findings appear to be
unequivocal. Thanks to H V Kamath's enterprise, lengthy summaries of the
C B I report have appeared in the press; to anyone who reads them it should
be clear that the C B I s investigation has more than made out a prima facie
case. Indeed, the Cabinet sub-committee appointed to examine the CHI's
findings was forced to admit as much. It agreed that the manner in which
Patnaik and M i t r a "conducted Government transactions in which were also
involved the interests of private concerns, owned or controlled by them or
their relations was definitely not in keeping w i t h the normal standards of
public conduct" and recorded its "profound concern at the picture, emerging as a whole from the series of such individual transactions in many fields
of activity of the State Government, of improper use of authority by leaders
of the Government". On a number of specific charges, it appeared to
concur w i t h the C B I . A b o u t the official directive restricting Government
purchases to local dealers, for instance, it agreed that it was "improper.
unwise and indiscreet" since it resulted in preference being shown to Orissa