- Jul 31, 2009
Mayawati's 'illegal tax' exposed
Mon-Oct 05, 2009
Noida / Manmohan Gupta, Pandit Ayush
A NewsX special investigation reveals that UP Chief Minister Mayawati and some of her associates are being accused of extracting crores of rupees a day from Uttar Pradesh’s liquor shops.
The stores' salesmen say they are being forced to pay a 10 rupee "Mayawati Tax" on every bottle of liquor they sell.
The scam appears to stretch across the state. Wherever you go the extortion or the Mayawati Tax remains the same.
A salesman in Noida says that Rs 15 is charged per bottle. Rs 15 may seem like a small amount. But multiply it by the 6 crore bottles of liquor sold in UP every year, according to the UP Excise department. That’s a whopping Rs 90 crore a year!
The tax on beer is less – Rs 5. And with beer sales also standing at 6 crore bottles a year, that’s another Rs 30 crore the "Mayawati tax" will mop up.
And that's not all. Ironically, the plight of the poor, who buy country-made liquor, is worse.
It’s estimated that six and a half crore litres of country made liquor is sold every year in Uttar Pradesh. So the Mayawati’s tax would garner an astonishing Rs 1200 crore.
So that’s a total of Rs 1350 crore Mayawati and her associates could be raking in.
Store salesmen say this illegal extortion started around seven months ago. That could mean Rs 780 crore for Mayawati and her associates - and not a word of protest from the police, excise officials or central authorities.
From what the liquor store salesmen reveal, it’s all a very well organized racket. But who is accused of running this racket for Mayawati?
When asked, this is what one salesman said.
NewsX: With whose permission are you doing this?
Salesman: Ponty Chadda….with Ponty Chadda’s permission
NewsX: Who is Ponty Chadda?
Salesman: He owns all the liquor shops.
The shadowy Ponty Chaddha and his family rule the UP liquor distribution business. His business is estimated to have a turnover of more than Rs 4000 crore and Chadda is now said to be a favoured associate of the UP Chief Minister.
In an unprecedented deal, the Mayawati government has asked Chadha to manage all the state’s liquor business on its behalf. So the Chadha group buys liquor at whole sale prices and sells it to retailers at a margin.
NewsX tried to contact Ponty Chadha for his take on the story, but despite numerous attempts there was no response.
What's astounding is that salesmen talk openly about the "Mayawati Tax "- as if it were an open secret.
Salesman: A team had come from Lucknow, they took away Rs 10-15 lakh.
NewsX: From whom?
Salesman: Yes…this has been the practice…the prices were lower only for a day…
NewsX: Ye kiske aadesh se badhaya hai?
Salesman: Yeh Mayawati se poochhiye aap.
NewsX: Kis se?
Salesman: Mayawati se
NewsX: Majak kar rahe hain kya?
Salesman: Aap aadesh ki baat kar rahe hain to aadesh to wahin se hai na. Ab woh paisa lengi toh paisa kahan se aayega. Niklega to yahin se na.
UP officials were too afraid to comment on this story. When NewsX spoke to excise department officials they refused to come on camera. Some even came to the NewsX office to try and dissuade us from running this story.
The Mayawati tax allegations could further sully the reputation of a Chief Minister now widely seen as a tainted politician.
But Mayawati’s party, the BSP, did not speak to NewsX on the matter. NewsX approached the BSP’s Naseemuddin Siddiqi, who is also UP’s excise minister, for a comment on the issue. This was his reaction.
“I will not speak on this issue. Kya tamasha hai,” said Naseemuddin Siddiqi, Excise Minister, UP.
Conspiracy of silence
Several requests for comments from the Chief Minister's office and the state police chief's office also went unanswered.
Instead, and perhaps coincidentally, UP's Principal Secretary suddenly asked our Lucknow Correspondent for details on NewsX's capital, broadcast licence etc.
But the opposition has been stirred by the expose.
Apart from validating what NewsX has found, Samajwadi Party leader pointed to the deep-seated corruption in UP's Liquor Industry.
“Yes it’s absolutely correct. The same liquor mafia approached me when we were in power. But we didn't succumb to the pressure. There is a gentleman, who happens to be a close relative of a powerful politician from Punjab. He is the negotiator between Shashank Shekhar Singh and the liqour mafia,” said Amar Singh, General Secretary, Samajwadi Party.
The nexus between the UP government and the liquor mafia is often spoken about. But this is the first time Amar Singh has clearly named and targeted Mayawati's all powerful Cabinet Secretary, Shashank Shekhar Singh, as a key player in the nexus.
Shashank Shekhar, however, could not be reached for a reaction, despite repeated efforts. NewsX also faxed a letter to Singh's office and sent an email at Chief Minister’s address but the response is still awaited.
The SP is now calling for an inquiry into the Mayawati tax and attacking the Congress on the issue as well.
"There should be an inquiry but I'm afraid both Congress and BSP are working in tandem. BSP and Congress are two sides of the same coin," said Amar Singh.
The Congress, on the other hand, is asking UP's opposition parties to come together and challenge the BSP in the assembly over the "Mayawati tax".
“All the Opposition leaders should raise the issue inside the house. The UP government must punish all those involved in such activities," said Shakeel Ahmad, Spokesperson, Congress.
The BJP too feels NewsX's investigation vindicates their claims that the BSP is running an exceedingly corrupt government.
"We had heard about extortions by mafia, but it's outrageous to hear about the use of political clout, that too by a Chief Minister to generate funds for selfish interests," said Rajiv Pratap Rudy, Spokesperson, BJP.
Field officers are afraid and are not ready to discuss the issue. Top government officials and BSP functionaries have refused to buzz.
Meanwhile, UP's liquor shops continue to levy the Mayawati tax - apparently with far more zest that they levy official taxes. And customers continue to be forced to pay the Mayawati tax.
For now, it remains as the most universal sign of how the UP chief minister is turning India's most populous state into her personal fiefdom.
Mayawati's 'illegal tax' exposed | NewsX