Income Tax Dept raids top Tamil Nadu bureaucrat

Will the first scoop rein in power centres in TN?

Business & Politics

News - Biz@India

December 22, 2016

/ By / New Delhi



Centre looks to consolidate presence in Tamil Nadu

Centre looks to consolidate presence in Tamil Nadu

Income tax raids on Tamil Nadu’s senior-most bureaucrat, Chief Secretary, P Ram Mohan Rao, conducted on December 21, shook the power centres in the state. Raids were conducted at his Anna Nagar residence in Chennai and other properties in Tamil Nadu, Andhra Pradesh and Karnataka.

Interestingly, the raids were planned when Rao had accompanied Tamil Nadu Chief Minister O Panneerselvam, on a visit to Delhi, to meet Prime Minister Narendra Modi and read out a long list of demands including Bharat Ratna for Amma, the late Chief Minister, J Jayalalithaa. Relief for damage inflicted by Vardha cyclone was also on the list of demands.

Long-time Tamil Nadu observers believed such actions were long overdue on power centres in the state.

Yet, post-Jayalalithaa, the raid assumes significance as it is a warning to the ruling AIADMK front to toe the centre’s (read BJP) line.

Also, raids were conducted at the residence of DK Badrinarayana, a relative of Rao, at Chittoor in Andhra Pradesh.

So far, probing agencies have recovered nearly INR 3 million in cash and five kilograms of gold during the raids. However, there is no confirmation on whether these assets were unaccounted for and disproportionate to declared income.

A case has been registered under the Prevention of Money Laundering Act. Rao will be questioned by officials from the enforcement directorate.

Why the Chief Secretary?

The raid is important for many reasons. This is the first high-profile raid since Prime Minister Narendra Modi announced his decision to demonetise high-value currency bills of INR 1,000 and INR 500 on November 8, to contain black money and punish the offenders.

Sources in the IT department point out that the raids are linked to a tax-evasion investigation against Rao’s son, Vikram. Earlier this month, the IT department found over 100 kg of gold, INR 960 million in banned 500 and 1,000-rupee notes and INR 340 million in new currency notes in raids at the homes of three Tamil Nadu businessmen — one of them, J Shekhar Reddy, allegedly has business links with the chief secretary’s son. Reddy was arrested on Wednesday.

The probe is also hinting at a possible sand-mining scam.

Politically, post-Jayalalithaa’s death, the BJP is eager to keep the AIADMK flock together by overt and covert measures. The raid is just the beginning. There is an intense power struggle for the control of leadership of both party and chief ministerial aspirations. BJP and Prime Minister Narendra Modi want to keep the AIADMK together and also under their watch. This is crucial, as BJP would need support to get its choice of candidate elected as the President of India, as Pranab Mukherjee’s term ends in July. Also, the saffron party has been making attempts to gain pockets of influence for the last one year now.

The raid on chief secretary, who wielded absolute control over the state administrative machinery, should serve as a warning to other power centres, who have amassed illegal wealth.

The post of chief secretary belongs to the cadre within the Indian Administrative Service and is the main link between the state and the centre. Rightly so, Rao, a 1985 batch officer, was one of the power centres in Tamil Nadu along with Sheela Balakrishnan, the adviser to the chief minister, who was reportedly been calling the shots in the administration when the then chief minister, Jayalalithaa was hospitalised.

Who is P Ram Mohan Rao?

A native of neighbouring Andhra Pradesh, the 1985 Tamil Nadu IAS batch inductee first shot into prominence when he was appointed secretary to the then chief minister, Jayalalithaa, when she assumed office in 2011. He served as her secretary till mid-2016. Soon after, when Jayalalithaa retained power in June 2016, she appointed Rao as the chief secretary, superseding some seniors and replacing K Gnanadesikan.

No sooner had the raids begun, than the political parties started reacting. Opposition and DMK leader, MK Stalin tweeted that the raids had “brought disgrace to the state”.

After the raid, Tamil Nadu will haunt the headlines. Watch this space.

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