The Life Insurance Corporation of India (LIC), a state-owned company, has reportedly lost over ₹ 20,000 crore of investment value out of the total holding of ₹ 36,000 crore (equity and debt) in Adani companies. That is, for every ₹ 10 invested, almost ₹ 6 has been lost. State Bank of India, a public sector bank, has an outstanding exposure worth ₹ 27,000 crore to the same group.

Both LIC and SBI have built their credibility over decades. They are custodians of the savings of crores of poor and middle-class citizens. It is these savings that are at risk today.

All opposition parties were unanimous that an inquiry needed to be done. The only difference of opinion was on the mode of investigation. Last month in parliament, polar opposites like the communists and the All India Trinamool Congress (TMC) were demanding a (time-bound) Supreme Court-monitored investigation. Other opposition parties wanted the inquiry to take the form of a Joint Parliamentary Committee (JPC). On March 2, the Supreme Court gave its judgment.

The Left parties and the TMC being on the same page is the rarest of rare occurrences. A Lady Gaga-Pankaj Udhas duet is more likely. But there are times when parties with divergent political ideologies come together on a major issue. I can share another example. In 2016, days after demonetisation, Mamata Banerjee led her MPs on a march from Parliament House to Rashtrapati Bhavan. The BJP’s old and trusted ally Shiv Sena, then still very much part of the NDA, were the unlikely participants at that important protest.

A Supreme Court-monitored investigation is what the CPI(M), CPI and TMC have been demanding on the floor of parliament. It is not the 10/10 solution, but it will be far more effective than a JPC. But before I spell out why JPCs are pointless, let me flag the alternate view that suggests the Supreme Court should not have intervened, as this is beyond its remit. This school of thought believes that any market-related issue should be investigated by the Securities and Exchange Board of India (SEBI). Since SEBI was in slumber and did not even follow the tenets of its own preamble, which gives it considerable authority, the Supreme Court-monitored probe was an option worth opting for. Veteran business journalist Sucheta Dalal, though, is still cynical: “Is there a parallel anywhere in the world where corporate honchos/lawyers with deep connections to the business community are appointed to what is supposed to be an investigation exercise?”

Here are three reasons why JPCs are an exercise in futility.

One, the chairperson of the JPC is decided by the Speaker of Lok Sabha and the chairperson of Rajya Sabha, in consultation with each other as may be necessary, and its members are subsequently nominated by each party according to the party’s strength. This makes these committees skewed towards the ruling majority because of their numbers in the Houses. The chairperson of the JPC would have been a BJP MP.

Second, in almost every JPC there is no consensus on the final report. Whenever important amendments are proposed by an opposition MP, the amendments are defeated in the committee by a show of hands. The ruling party uses its brute majority to do this. This has become a trend. Instead of coming to these meetings with an open mind, Members of Parliament representing the treasury benches come and rubber stamp the views of the ruling party. Those in the opposition, holding an alternate view, are outvoted. The only recourse left is to table a dissenting note – for the record.

Third, let me pluck out a few examples – from 1987, 1992 and 2001. In the Bofors case of 1987, it was alleged that a Congress member had taken bribes while settling the deal of purchasing the Bofors ‘shoot and scoot’ guns. The JPC report was boycotted by the opposition highlighting that the committee was packed with members of the ruling party. When the Harshad Mehta scam (1992) surfaced, a JPC was set up to inquire into allegations that Mehta diverted funds to Maruti Udyog Limited and provoked a major fall in the Sensex. However, the recommendations were neither accepted nor implemented. During the Share Market Scam (2001), the Ahmedabad-based Madhavpura Mercantile Cooperative Bank had big exposure to the stock market, courtesy former stockbroker Ketan Parekh. The JPC suggested stock market regulations, which were subsequently diluted.

There have been other cases where a JPC has been formed for investigations. For example, the Joint Committee on pesticide residues in and safety standards for soft drinks, fruit juice and other beverages (2003) and the Joint Committee to examine matters relating to allocation and pricing of telecom licences and spectrum (2011). While only some recommendations were implemented from the former, the latter was mired in controversy.

A time-bound investigation conducted under the supervision of the Supreme Court must get to the bottom of the truth. India is watching. The world is watching.

[This article appeared on NDTV.com | Monday, March 06, 2023]