February 23, 2017

Mutual funds exposure in Jan rise highest in second rung large caps

​Here is a story I contributed earlier this week for the organisation I work for presently:

[C] Mutual funds exposure in Jan rise highest in second rung large caps
Cogencis, Tuesday, Feb 21

    By Rajesh Gajra
    NEW DELHI - Second rung of large cap stocks attracted the attention of mutual fund schemes in January compared to the previous month with their exposure increasing at a rate higher than the rise in the market value of the stocks.
    Aggregate assets under management across all equity mutual fund schemes in stocks forming a part of the Nifty Next 50 index went up by 12.4%, or 75.22 bln rupees, month on month to nearly 680 mln as of end of January, data from Cogencis Corporate Fundamental Database showed.
    The on-month rise in Nifty Next 50 was just 8.8% in the same period. A difference between the rate of index value change and the change in the AUM can be ascribed to fresh investments made by the mutual funds from net
inflows across all their equity and equity-oriented schemes, including index ETFs and index funds.
    Reliance Mutual Fund, Birla Sun Life Mutual Fund, DSP BlackRock Mutual Fund and Kotak Mahindra were the most aggressive buyers in the large-cap stocks from Nifty Next 50 in January.
    The Nifty Next 50 index largely represents the second-rung large cap stocks after the Nifty 50's major large cap stocks.
    On the other hand, equity mutual fund schemes' collective AUM in the first rung large cap stocks of Nifty 50 stood at 2.89 trln rupees on Jan 31, up 8.0% on month while the index itself rose by just 4.6% on month (see table below).
    Mid cap stocks were also in demand with aggregate equity mutual fund AUM in Nifty Midcap 50 stocks going up by 7.9% on month to 396.91 bln rupees at the end of January.
    A substantial part of the on-month increase in large cap and mid cap stocks was driven by the deployment of fresh inflows by the Central Public Sector Enterprises Exchange Traded Fund managed by Reliance Mutual Fund.
    The CPSE ETF's follow-on public offer in January had fetched about 60 bln rupees. With inflow turning positive, the CPSE ETF's AUM in Nifty 50 stocks went up 3.4 times on month to 43.27 bln rupees, while its exposure to Nifty Next 50 rose by 3.5 times on month to 29.21 bln rupees and its exposure to Nifty Midcap 50 went up by 3.5 times to nearly 6 bln rupees.
    In the first rung large cap stocks of Nifty 50, besides Reliance Mutual Fund's contribution on account of the CPSE ETF inflow, SBI Mutual Fund, HDFC Mutual Fund and Kotak Mahindra Mutual Fund were seen jacking up their exposure.
    In particular, their schemes such as SBI Magnum Taxgain, SBI ETF Nifty 50, HDFC Prudence, Kotak Banking ETF and Kotak Select Focus saw sharp jumps in exposure to Nifty 50 stocks.
    The second rung large cap stocks from Nifty Next 50 were seen being bought by schemes such as Reliance CPSE ETF, Birla Sun Life Advantage, Birla Sun Life Enhanced Arbitrage, DSP BlackRock Top 100 Equity and Kotak Equity Arbitrage.
    Taking fancy for the mid cap stocks of Nifty Midcap 50 were HDFC Prudence, HDFC Top 200, Birla Sun Life Advantage and Birla Sun Life Equity.
    Mutual funds did not show any enhanced interest in small cap stocks despite the on-month return of 9.0% of Nifty Small Cap 100 being the highest among the four indices.
    The on-month rise in aggregate fund exposure to stocks of Nifty Small Cap 100 was 9.2% as of Jan 31, marginally higher than the 9.0% on-month rise in the index itself.
    Clearly, the month of January belonged to second rung large cap stocks and partly to mid cap stocks as far as change in equity mutual fund investments were concerned.

The table below summarises the aggregate mutual fund AUM in index stocks:
                        AUM on Jan 31        Month-on-month change
                        (bln rupees)        AUM          AUM      Index
                                          (bln rupees)    (%)
                         -----------      ------------   ----     ----
Nifty 50                  2890.86         214.39          8.0     4.6
Nifty Next 50              679.68          75.22         12.4     8.8
Nifty MidCap 50            396.91          29.12          7.9     5.6
Nifty Small Cap 100        146.01          12.29          9.2     9.0

The tables below list mutual funds whose exposure went up considerably:
                               AUM on Jan 31    Month-on-month change
                               (bln rupees)     (bln rupees)    (%)
                                -----------      -------------------
In Nifty 50:
Reliance MF                      286.64         41.34           16.9
SBI MF                           342.15         35.99           11.8
HDFC MF                          455.97         32.93            7.8
Kotak Mahindra MF                115.37         10.22            9.7

In Nifty Next 50:
Reliance MF                       95.26         25.14           35.8
Birla Sun Life MF                 68.55          9.00           15.1
DSP BlackRock MF                  24.35          4.90           25.2
Kotak Mahindra MF                 30.33          3.25           12.0

In Nifty MidCap 50:
Reliance MF                       44.06          6.64           17.7
HDFC MF                           60.87          5.68           10.3
Birla Sun Life MF                 32.38          2.92            9.9
DSP BlackRock MF                  12.22          1.13           10.2

In Nifty Small Cap 100:
Reliance MF                       32.21          3.32           11.5
Birla Sun Life MF                 12.96          1.56           13.7
UTI MF                             6.88          1.21           21.4
L&T MF                             9.27          0.89           10.6


February 16, 2017

The Mountain Called Her By Name

New post on Barnstorming

The Mountain Called Her By Name

by briarcroft


Devi and father Willi


Nanda Devi courtesy of Stanford Alpine Club


The rippeld's arrival as a new junior in Olympia High School in 1970 reached me within minutes, as I felt the impact of her presence on campus immediately.  One of my friends elbowed me, pointing out a new girl being escorted down the hall by the assistant principal.  Students stared at the wake she left behind: Devi had wildly flowing wavy long blonde hair, a friendly smile and bold curious eyes greeting everyone she met.

From the neck up, she fit right in with the standard appearance at the time:  as the younger sisters of the 60's generation of free thinking flower children, we tried to emulate them in our dress and style, going braless and choosing bright colors and usually skirts that were too short and tight.   There was the pretense we didn't really care how we looked, but of course we did care very much, with hours spent daily preparing the "casual carefree" look that would perfectly express our freedom from fashion trends amid our feminist longings. Practicing careful nonconformity perfectly fit our peers' expectations and aggravated our parents.

But Devi never looked like she cared what anyone else thought of her.  The high school girls honestly weren't sure what to make of her, speculating together whether she was "for real" and viewed her somewhat suspiciously, as if she was putting on an act.

The boys were mesmerized.

She preferred baggy torn khaki shorts or peasant skirts with uneven hems, loose fitting faded T shirts and ripped tennis shoes without shoelaces.  Her legs were covered with long blonde hair, as were her armpits which she showed off while wearing tank tops.   She pulled whole cucumbers from her backpack in class and ate them like cobs of corn, rind and all.  She smelled like she had been camping without a shower for three days, but then riding her bike to school from her home 8 miles away in all kinds of weather accounted for that.   One memorable day she arrived a bit late to school, pushing her bike through 6 inches of snow in soaking tennis shoes, wearing her usual broad smile of satisfaction.

As a daughter of two Peace Corps workers who had just moved back to the U.S. after years of service in Nepal, Devi had lived very little of her life in the United States.  Her father Willi Unsoeld, one of the first American climbers to reach the summit of Mt. Everest up the difficult west face, had recently accepted a professorship in comparative religion at a local college.  He moved his wife and family back to the northwest to be near his beloved snowy peaks,  suddenly immersing four children in an affluent culture that seemed foreign and wasteful.

Devi recycled before there was a word for it simply by never buying anything new and never throwing anything useful away, involved herself in social justice issues before anyone had coined the phrase, and was an activist behind the scenes more often than a leader, facilitating and encouraging others to speak out at anti-war rallies, organizing sit-ins for world hunger and volunteering in the local soup kitchen.  She mentored adolescent peers to get beyond their self-consciousness and self-absorption to explore the world beyond the security of high school walls.

Regretfully, few of us followed her lead.  We preferred the relative security and camaraderie of hanging out at the local drive-in to taking a shift at the local 24 hour crisis line.  We showed up for our graduation ceremony in caps and gowns while the rumor was that Devi stood at the top of Mt. Rainier with her father that day.

I never saw Devi after high school but heard of her plans in 1976 to climb with an expedition to the summit of Nanda Devi,  the peak in India for which she was named.  She never returned, dying in her father's arms as she suffered severe abdominal pain and irreversible high altitude sickness just below the summit.  She lies forever buried in the ice on the faraway peak that called her by name.  Her father died in an avalanche only a few years later, as he led an expedition of college students on a climb on Mt. Rainier, only 60 miles from home.

Had Devi lived these last 40 years, I have no doubt she would have led our generation with her combination of charismatic boldness and excitement about each day's new adventure.  She lived without pretense, without hiding behind a mask of fad and fashion and conformity and without the desire for wealth or comfort.

I wish I had learned what she had to teach me when she sat beside me in class, encouraging me by her example to become someone more than the dictates of societal expectations. I secretly admired the freedom she embodied in not being concerned in the least about fitting in.   Instead, I still mourn her loss all these years later, having to be content with the legacy she has now left behind on a snowy mountain peak that called her by name.



briarcroft | February 16, 2017 at 7:17 am | URL: http://wp.me/poRrb-7kj

February 14, 2017

Oct-Dec 2016-17 earnings review of Piramal Enterprises

Piramal Enterprises Oct-Dec consol net profit margin growth flat YoY
Feb 13

Higher operating profit from its financial services and its
pharmaceuticals business segments drove Piramal Enterprises Ltd to record a
on-year jump of 32% in its consolidated net profit to 4.04 bln rupees in
    Segmentwise data of the company showed the financial services segment
profit to more than double to 3.95 bln rupees in the December quarter from
1.84 bln rupees a year ago.
    Pharmaceuticals business of the company recorded a segment profit of 339
mln rupees in Oct-Dec, up 28% on year.
    Piramal Enterprises' information services business, on the other hand,
recorded a on-year fall of 10% in segment profit to 1.60 bln rupees in the
reporting quarter.
    The company's consolidated total income grew by 31% to 23.42 bln rupees,
driven by on-year increases of 96%, 8.3% and 9.3% in the segment revenues
from the financial services, pharma and information segments.
    The consolidated operating margin of Piramal Enterprises stood at 46.3%
in the December quarter, 850 basis points higher than that in the year ago
    The segment margin, calculated as the percentage of segment profit to
segment revenue, rose the highest in the company's financial services segment to
43.7% in from 39.9%. Following it was the pharmaceuticals segment whose
margin went up to 3.5% from 2.9%. On the other hand, the information
management services business saw segment margin decline to 34.6% from 42.0% a
year ago.
    Though the operating margins grew at a robust pace, the consolidated net
profit margin of the company showed a near flat growth to 17.3% in Oct-Dec
from 17.2% a year ago.
    This was because of a sharp increase in the company's interest costs in
Oct-Dec which stood at 5.91 bln rupees, 130% more than the year ago quarter.
The company said this was primarily on account of increase in debt for making
investments under financial services business and partly for the acquisitions
in its pharma business.
    "This quarter (Oct-Dec) witnessed new acquisitions... We remain
committed to our overall business strategy of efficiently allocating capital
towards growing both organically and inorganically," Ajay Piramal, chairman
of Piramal Enterprises said in a company statement.
    In its pharma segment, the company said its global pharma business
revenue grew 5% on year to 8.70 bln rupees while its domestic consumer
products business rose 28% on year to 850 mln rupees. The company said
despite demonitisation, most brands under its consumer healthcare products
performed better than expectations.
Today,  Piramal Enterprises shares ended at 1,811.10 rupees on the NSE, up
1.94% over Friday.

February 01, 2017

India Budget 2017-18: Trend in Tax Revenue in last 4 years

Tax revenue trend from 2014-15 to 2017-18

In 2016-17 and 2017-18, indivudal income tax (majorly salaried taxpayer) receipt are up 25% year on year while corporate tax receipts are up just 9% YoY.

What it shows that Individual taxpayers of India are paying more tax every year at a pace much faster than that of companies are paying less.

Finance minister Jaitley has time and again supported this trend. But companies profit before tax runs into amounts in multiples of the taxable income earned by individuals (including those who are currently evading tax). So corporate tax should grow at a pace equal to, if not more, than the pace seen in rise of income tax collection from individuals.

          YoY change (%)  
  Actual  Actual Budget Revised Budget Estimates 2014-15 to 2015-16 to 2016-17 to
2014-2015 2015-16 2016-2017 2017-18 2015-16 2016-17 2017-18
A. TAX REVENUE              
(a) Taxes on Income and Expenditure 687260 733515 839699 972232 7 14 16
Corporation Tax 428925 453228 493924 538744 6 9 9
Taxes on Income Other Than Corporation Tax 258326 280322 345776 433487 9 23 25
Hotel Receipts Tax 1 1 ...        
Interest Tax 6 5 ...        
Fringe Benefit Tax -8 -46 ...        
Other Taxes on Income and Expenditure 11 4 ...        
(b) Taxes on Property and Capital Transactions 8484 8430 7398 7768 -1 -12 5
Estate Duty 0 1 ...        
Taxes on Wealth 1086 1079 ...   -1    
Gift Tax 0 0 ...        
Securities Transaction Tax 7398 7350 7398 7768 -1 1 5
(c) Taxes on Commodities and Services 546188 710068 852118 927150 30 20 9
Customs 188016 210338 217000 245000 12 3 13
Union Excise Duties 188128 287149 386415 405920 53 35 5
Service Tax 167969 211414 247500 275000 26 17 11
Other Taxes and Duties on Commodities and Services 2074 1167 1203 1230 -44 3 2
(d) Taxes of Union Territories without Legislature 3204 3879 4277 4680 21 10 9
GROSS TAX REVENUE 1245136 1455891 1703492 1911830 17 17 12
State's share excluded from the Consolidated Fund 337808 506192 608000 674565 50 20 11
Tax Revenue of the Central Government 907327 949698 1095493 1237264 5 15 13

Equity assets under PMS schemes jump 30% on year in Jan-Dec 2016

My recent contribution:

[C] Equity assets under PMS schemes jump 30% on year in Jan-Dec 2016
Cogencis, Monday, Jan 30

    By Rajesh Gajra
    NEW DELHI - Equity assets of portfolio managers registered with Securities and Exchange Board of India under the SEBI (Portfolio Managers) Regulations have been growing at a rapid pace in the last couple of years.
    And, the pace quickened in the Jan-Dec 2016 period as compared to the year ago period, an analysis of discretionary assets under management data released by Securities and Exchange Board of India showed.
    This indicates rising preference of high networth investors to invest in equities through the portfolio managers under their portfolio management schemes as the minimum investment size in these schemes is Rs 25 lakh and the investment strategies are specialised in nature.
    Total discretionary assets of portfolio managers in listed equity shares recorded a sharp rise of 30.1% to 620 bln rupees as of Dec 31 2016, compared to a year ago. This surge was more than the 4.1% rise seen in the same period in movement of the equity benchmark index, Nifty 50.
    In the Jan-Dec period of 2015, discretionary equity assets under portfolio managers had recorded a high rate of growth, with the corpus of 477 bln rupees as of Dec 31 2015 being 25.2% more than a year ago. This growth took place when the Nifty 50 actually recorded a decline of 4.1% in the same period.
    In contrast, the discretionary debt assets corpus of portfolio managers saw a lower growth rate of 17.1% in the Jan-Dec period of 2016 (see table).
    The debt funds corpus of portfolio managers comes predominantly from the funds of employees provident fund organization and various provident funds.
    Portfolio managers are allowed to invest on behalf on private clients under the SEBI regulations with a minimum investment ticket size of Rs 25 lakh per client, unlike mutual funds which solicit investment funds from public investors.
    Portfolio managers' assets under management are typically of two types--discretionary and non-discretionary.
    Under the discretionary mode, the clients authorize the portfolio to invest in any instrument or asset class under broad investment objectives specified in the fund prospectus. Under the non-discretionary category the clients direct the portfolio manager to invest their funds into specific instruments.
    As of Dec 31 2016, the total non-discretionary assets of portfolio managers in listed equities stood at 114 bln rupees.

DISCRETIONARY AUM UNDER PMS                           
                                    Dec 2016    Dec 2015          Dec 2016      Dec 2015
                               Assets under management         On-year change    
                                        (Rs billion)                           (per cent)      
Listed equities                620             477                    30.1             25.2
Plain debt                     8320           7107                    17.1             19.0
Mutual funds                   86               62                     38.1             23.7
Total*                           9201           7845                    17.3             18.4
- of which EPFO/PFs   8210          7083                     15.9            18.2
* across all asset classes and instruments

Source: Securities and Exchange Board of India                             

January 18, 2017

Mutual funds' sectoral preferences as of Nov 2016

A story I wrote last month as a journalist in the organisation I work
for currently:

[C] ANALYSIS: Bargain buying by MFs cushions pharma, IT, auto stocks
Cogencis, Monday, Dec 26

By Rajesh Gajra
NEW DELHI - When sector indices for information technology, consumer
durables, pharmaceuticals and auto stocks fell by more than 5% each between
August and November, domestic mutual fund investors saw it as an opportunity
to invest in them.
But the rising index for the oil and gas sector in the same period didn't
evince a similar interest from mutual funds that collectively make for one of
the largest domestic institutional investors, and account for around 10% of
the free-float market capitalisation of NSE worth about 50 trln rupees.
The investing trend by India's mutual funds provided cushion to falling
sectors and prevented the runaway rise of oil and gas stocks, an analysis of
sector-wise fund holding value data from Cogencis Corporate Fundamental
Database showed.
The Nifty IT index fell 7.0% from its average closing level in August to
that in November. In the same period, mutual funds' exposure went up by 8.8%
to 353.96 bln rupees from 325.47 bln rupees.
When S&P BSE Consumer Durables index and Nifty Pharma index fell around
5.5% each in this period, mutual funds increased their exposure to the stocks
in the two indices by around 7.5% each, to 36.3 bln rupees and 286.1 bln
rupees, respectively (see table).
Mutual fund holdings in stocks of Nifty FMCG and S&P BSE Capital Goods
fell, but not as much as the index fell in value during Aug-Nov.

AUG 31-NOV 30
Sector Index    Index value     MF holding value         MF holding in Nov
                              (percentage change)                          (in bln rupees)
Nifty IT                    -4.3             8.8                                         354
Nifty Auto                -7.9             6.2                                         412
Nifty Pharma            -3.6            7.7                                         286
Nifty FMCG             -9.4            -1.6                                       211
BSE Cap Goods         -7.7           -1.3                                      324
BSE Cons. Dur.          -9.7           7.5                                         36
Nifty Bank                 -5.9            0.9                                     1003
BSE Oil & Gas           8.1             3.6                                      287

From August to November, S&P BSE Oil and Gas Index rose by nearly 10% but
mutual funds' exposure went up only by just 3.6% to 287.0 bln rupees on
account of profit booking.
The value of mutual fund holdings in stocks of Nifty Bank index rose a
nominal 0.9% in November to 1.0 trln rupees from August even though the index
fell by nearly 6%. Banks stocks accounted for 20% of mutual funds' total
equity exposure.

In the last one year, mutual funds have pared their exposure to the
realty sector. The value of their holdings in Nifty Realty stocks fell 4.3%
to 8.7 bln rupees in November from 9.1 bln a year ago, even though the index
rose by 3.2% in this period.
Exposure of mutual funds rose the highest on year in Nifty Metal stocks
to 73%, more than the 57% increase in the value of the index.
In the case of Nifty FMCG, S&P BSE Consumer Durables and Nifty Pharma
indices, the mutual fund holdings went up in value significantly even though
all the three indices recorded on-year fall (see table).
Funds are using the current slide in these indices to increase exposure
as they expect them to do well over the next 3-4 years.

NOV 30 2015-NOV 30 2016
Sector Index                 Avg index value                      MF holding
                                                    (percentage change)
Nifty IT                               -10.0                                         0.3
Nifty Pharma                        -3.6                                       28.5
BSE Cons. Dur.                    -9.5                                        36.2
BSE Cap Goods                   -3.7                                          2.5
Nifty FMCG                          1.0                                        39.9
Nifty Bank                             6.9                                        20.8
BSE Oil & Gas                    28.3                                       22.5

The analysis showed that among diversified indices, mutual funds
preferred large-cap and mid-cap stocks over small-caps.
From August to November, mutual fund holdings in Nifty 50 stocks went up
2.6%, even though the index itself lost 4.5% in value.
Nifty Mid-cap 100 Index fell by 1.0% but mutual funds' exposure increased
a little by 0.9%.
The small-cap stocks index, Nifty Small-cap 100, fell 3.1% in the same
period and mutual fund exposure also fell by 2.1%. End

Dark regime

I share below an interview from Scroll.in which I found insightful. I wish universal brightness to envelop all those people in the country's governance system today whose hearts are filled with darkness currently as a result of which they indulge in politics of revenge.

I dream of a India where ALL honesty and ethics are rewarded.

Interview: Arvind Kejriwal's principal secretary on how he was hounded, humiliated and maligned
'I can speak out,' says Rajendra Kumar, 'but there are millions who are framed out of vengeance, who are framed to fix them politically.'

Ajaj Ashraf

Till the time he was arrested last year for alleged corruption, Rajendra Kumar had been the Principal Secretary to Delhi's Chief Minister, Arvind Kejriwal. In this 90-minute interview to Scroll.in, Kumar bares his heart. He speaks of his run-in with former Lieutenant Governor Najeeb Jung, the ominous messages that would be sent to him, the raid the Central Bureau of Investigation conducted on his office and residence, the people he claims were beaten to make them testify against him, the details about his arrest and suspension, and why it is important for civil servants to stand up and be counted.

What was your interaction like with Najeeb Jung, who became Delhi's Lt Governor in July 2013, and Sheila Dikshit was then the chief minister?
I was then Secretary, Higher and Technical Education. My interaction was mostly with Sheila Dikshit and her ministers only. With the Lieutenant Governor, my interaction with him was mostly confined to formal meetings in a group.

During those days, didn't Jung insist on bureaucrats sending files directly to him, as he was to do later with the Aam Aadmi Party government?
No, it was nothing like that. I served Delhi under the Dikshit government right through its entire tenure [which was 15 years long] but for two years. There was no system of all files going to the Lieutenant Governor. Only on the issue of transfer and posting of senior IAS [Indian Administrative Service] officers, super-time and above (that is, secretaries and above), the files would go to the LG, broadly, for his concurrence. None of the LGs differed with the proposals sent by the government. For all other officers below them, the files would be handled by ministers or the chief minister, depending upon portfolio allocation.

So when you were handling higher education at the time Dikshit was chief minister, did Jung ever summon you?
He called me once to say that he wants the files of a Vice-Chancellor of a particular university. I sent the files to him via the chief secretary. Subsequently, Jung responded saying he didn't want these files but one which had against complaints against that Vice-Chancellor.

Who was the Vice-Chancellor?
He was the Vice-Chancellor of Delhi Technical University. I sent the file Jung wanted. But he said it didn't contain specific complaints. He asked me to examine and bring out his misdemeanour, his misconduct, his favouritism and then put it up, again, to him. I sincerely looked into the complaints. There are always general complaints filed against almost all authorities. However, after examining the complaints against the Vice Chancellor, I concluded these complaints didn't have a reasonable chance of being proved. I submitted the file with my observation that none of the complaints was fit to be investigated.

You made a note of it in the file?
Yes, I did, and I forgot about it. Much after I left the higher education department, I came to know that the Vice Chancellor was forced to go on leave. He did come back to Delhi Technical University for 15 days or a month, and retired thereafter. That particular VC was earlier the Director of Delhi College of Engineering for 10 years or so. A learned professor of the Indian Institute of Technology, he took the Delhi College of Engineering to great heights.

It is easy for me to figure out who the Vice Chancellor was.

Well, I don't wish to name him. However, in my 25 years of career till then [now 27 years], I had never seen a person go after another in such a manner. The humiliation of being asked to go on leave at that level is extreme.

Then the Aam Aadmi Party formed the government after the December 2013 polls and lasted for 49 days. You were appointed as principal secretary to Chief Minister Arvind Kejriwal. Did your relationship with Jung change then?
With the chief minister, I attended some meetings with Jung. Two days after the government resigned, Jung called me. The first thing Jung said, "Rajendra, people tell me that you have identified yourself too closely with the AAP government."

Being a person who believes in giving direct answers to direct questions, I countered, "Sir, do you also think I was too close to the AAP government?" Jung kept quiet. But it was obvious to me that he thought I had gone far beyond my call of duty.

Thereafter, President's rule was imposed. Did your relationship with Jung become strained in this phase?
I moved to the Department of Urban Development, which is [a] very public oriented [entity]. His difficulties or anger or dissatisfaction, whatever you may wish to call it, with me continued. Jung gave me a show cause notice for reaching five minutes late in a meeting he had once called. I was late because I was in a meeting with the chief secretary. I had assumed the chief secretary too was supposed to attend the meeting. That was the first show cause notice I had ever been served in my life.

Other than this show cause notice, did his anger or dissatisfaction with you become obvious
In meetings, his behaviour towards me was what you can call a bit stern. But I continued with my work in the best possible manner. During President's Rule, all MLAs, irrespective of their party affiliations, would come to me, primarily, for executing scheme under the MLA Local Area Development.

Did Jung have complaints that your were helping AAP MLAs?
No, but I suppose – and I can't know that – he perhaps thought AAP wouldn't come to power again. I say this because once AAP came to power again, in 2015, Jung's behaviour towards me became very, very different than what it was during President's rule.

Did he write your Annual Confidential Report during President's rule?
He graded everyone outstanding, including me. In that respect, he was very kind to all of us. However, after AAP came back to power and I was back as principal secretary to the chief minister, I found he was very uncomfortable with me during two-three meetings, which were held in a group and were not one-to-one.

In these meetings, Jung would say, "Rajendra, come and meet me." On each occasion I replied, "Sir, I am always there." A few times, I sought an appointment with him because LG, after all, is the executive head. However, I never got an appointment with him.

What could have been his idea to ask you to meet him and yet not give you an appointment
You will have to ask him that, but I suppose he wished to make a public expression of supporting or liking me even thought he perhaps personally never felt that way.

Did you sense Jung was gunning for you before it all blew up? Let us go chronologically – of complaints being filed and you being raided and…
AAP formed its second government in February 2015, and from April onwards, I used to get messages that I am misguiding the government.

From whom did you get these messages?
From different officers.

From whom were these messages coming?
The Lieutenant Governor. But I ignored these message because as a staff officer of the chief minister, who has a council of ministers, and if they seek my advice, it my duty to give it. In fact, it is my duty to give advice even if they don't seek it, for instance, on a better way of doing things. This normally comes to you after some years of administrative experience.

There was also the issue of my holding the charge of home secretary. A duly authenticated order of the services department gave me this charge. Even then, messages were communicated to me, besides notices and orders from the chief secretary.

What did these notices say?
These notices said that I shouldn't look into the files of the home department. I asked the Chief Secretary, in writing, to the effect, "Please sir, there is a duly authenticated order and if you don't want me to work, I don't have any issue at all. But please, kindly have the order withdrawn."

He would verbally tell me not to look into the files, but I said that as long as the order wasn't withdrawn, I would be guilty of misconduct and non-performance of my duty. The home department is anyway a difficult department to work in. Later on, the order was withdrawn and I stopped looking into the files of the home department. The correspondence between the Chief Secretary and me exists.

This was when?
May 2015. Many reports were also sent by the LG to the Union Home Ministry, and I am given to believe that he personally briefed people in that ministry about the so-called misconduct of mine.

Was it spelt out what your misconduct was all about?
I have notes and letters sent by the LG. These are very general in nature. These would say that my behaviour is unbecoming of an officer of my seniority. It was never specific. My reply to the show-cause notice given by the Home Ministry…

What was this show cause notice about?
It asked me to explain why I looked after the work of the home department despite having received instructions to the contrary from the Chief Secretary.

My reply to the show-cause went into several pages. In it, I raised questions extremely pertinent to the civil service. I said, "Sir, kindly guide, for there is a duly authenticated order and I am being verbally asked not to follow that order. You are the Chief Secretary and I am secretary. What's government in this context isn't at all clear to me." The simplest thing was to withdraw that order. But I was told, no, no, simply follow what you are being told.

Why was the Chief Secretary asking you not look after the home department?
There is a 1998 Presidential Order, which prescribed that on reserved subjects of land, public order and police [which falls in the jurisdiction of the Central government], the files will be submitted through the chief minister. In pursuance of that Presidential Order, the chief minister [Kejriwal] issued instructions that all such files [pertaining to reserved subjects] should be sent through him [to LG]. I think that was what Jung didn't like. He perhaps thought that it was I who advised Kejriwal to issue the order.

But even if I had advised the chief minister to do so, I would be deemed to have advised correctly as there was a Presidential Order to that effect. To threaten officers for giving advice which is inconvenient to you (LG) is not what our system is. Our system runs on rules, regulations and set patterns. The matter went to the Home Ministry, which then issued me the show-cause notice.

To which you just said you replied.
Yes, after which they issued a final order. Once again, it reiterated that I shouldn't have continued to look after the files of the Home Department despite the Chief Secretary advising me. They never clarified the points I had raised in my lengthy reply. They disregarded that.

Instead, they issued an advisory that I should be more careful in the future. [Decoded], it meant I shouldn't advice the chief minister properly. I should not, as a staff officer, do what I am required to do under the law. [To dissuade me], they had to find something else.

Which was what?
In June 2015, they forcibly posted an officer to the Anti-corruption Bureau, which, so to speak, went under their control. In September, the Anti-Corruption Bureau called me for a month.

Every day?
No, I was called five or six times. The purpose was to indirectly give me a warning that…

Could you describe what these indirect warnings were?
They found that I had been transport commissioner for three months, between November and January, in 2012-2013. In the year 2002, the transport department had given a contract for [implementing] CNG [Compressed Natural Gas] fitness issues. The Anti-Corruption Bureau was examining was whether or not the contract had been properly awarded. In December 2012, they filed an FIR [First Information Report], which had nothing to do with me as I hadn't been in the transport department in 2002.

In September 2015, however, the Anti-Corruption Bureau wanted to know why I didn't cancel that contract in Dec 2012 and Jan 2013 after the FIR had been filed. I explained to them that there is no law which calls for cancelation of contracts after the filing of an FIR [as it does not mean that the person against whom it has been filed is guilty].

Was the contract cancelled after you left the transport department in January 2013?
For the next two years, I am sure it wasn't. I am also sure my successors were not summoned to the Anti-Corruption Bureau and grilled.

And the Anti-Corruption Bureau was under Jung's control?
It was completely under his control. After that, as is known, a person made a complaint to the Anti-Corruption Bureau. That complaint was transferred to the Central Bureau of Investigation, and then the raids happened in December.

Didn't this complaint pertain to contracts given by you to Endeavour Systems Pvt Ltd.?
Yes, but I can't talk about the details of the case as the matter is before the court.

When did you start getting summons from the CBI?
The CBI never questioned me. The CBI manual says that when there is a complaint, it has to conduct a form of preliminary inquiry. Let us say that the CBI did conduct an inquiry into the complaint which the Anti-corruption Bureau had transferred to it. In that case, they either found something or nothing at all. If they hadn't found anything, they couldn't register a case. If they had, then they would have registered a case on the findings of the inquiry. They did neither. The FIR that the CBI filed against me mentions only oral information. It doesn't even state when that information came to them. Even the special judge court found it unusual.

When was this FIR filed?
It was filed on December 14, 2015 by the CBI. They were in such a hurry that they registered it (the case) on the 14th, obtained a search warrant the same evening, and on the 15th morning searched my house, my office, and the chief minister's Office.

Weren't you expecting this blowback? Didn't you between September and December feel, even once, why you were getting into all this?
Maybe I am naïve. My trust in the government system was so high that I never thought these things were possible.

The search or raid must have come as a shock to you and the family.
It was definitely a shock. They searched the entire house, opened all almirahs, took out all the stuff in there, looked up the rooms where my helpers stay, looked into drains, even the cars parked outside. The media people were there…

I suppose the media had been told about the raids beforehand.
I suppose so. This is a rich neighbourhood [Maharani Bagh, which also has government quarters]. The search party thought that the cars parked by the road running past my house were mine as well. They wanted to search these cars until they were told that I wasn't their owner.

Did they check your computers and laptop?
They did, they seized my laptop, my mobile, my iPad.

In complete breach of your privacy?
The search warrant said that they had to obtain the data of electronic devices I used. Had I been careful, or the search hadn't been a surprise, I would have been able to save my gmail account, which they took control of. I am among those rare persons who pay to gmail for an extra 100 GB storage capacity.

What do you mean by saying that they took over your gmail account?
They asked for my password, and then they changed it, even the questions that constitute the process of recovering your password in case you forget it.

Is your gmail account still inaccessible to you?
It still remains inaccessible. All my life is on it. I had the habit of scanning all my documents and storing it in my gmail account. I had to restart my life. My personal photographs, even the letters my wife wrote to me, because the ink on paper fades and I wanted to preserve that memory. I have no access to them. I don't know how much they have seen.

More importantly, how much of it hasn't been deleted?
I have filed a request in the special judge's court that I should be allowed to recover my gmail account. This is in violation of the Information Technology Act, which doesn't allow unauthorised changing of passwords.

Maybe, you should have monitored them at the time they asked your password.
I even told them that my password would require an SMS on my mobile phone. But I was so confident, I thought if they want to see my email, let them see it.

How long did the search last?
The search was over in two-three hours, but they have a very lengthy procedure of documentation…

Were the people in the search team talking to…?
They were reporting every five minutes what was happening here. That was being passed to the media, which was reporting the search live. They did everything possible to malign me, pass right or wrong information. A few TV channels reported that the house I lived in was worth Rs 50 crore.

That is because your house is located in Maharani Bagh, counted among Delhi's posh colonies.
They even reported that five or six expensive vehicles have been found outside my house.

Obviously, they didn't disclose that your house is owned by the government.
They didn't disclose that. Tell me, who could have been feeding such information to the media other than members of the search team?

There was also talk about liquor being seized from your house.
It is my personal choice whether or not I drink.

Delhi, anyway, doesn't have prohibition.
Yes, but there is a limit to the amount of liquor an individual can posses.

What's the limit?
It is 9 litres for hard liquor [whiskey, rum, vodka] and 18 litres for beer and wine. These are limits for every individual above the age of 25. They found 14 litres of liquor at my house. Although my in-laws were also there in the house then, my wife and I are permanent residents. My house, therefore, could legitimately have 18 litres. I told them that.

You knew this rule?
I knew it. I have worked in the government. I don't know who were guiding the CBI people – they were under the impression that nobody in Delhi can keep a bottle of liquor without obtaining a government permit.

By that token, the entire city of Delhi would be in infringement.
They called over a guy from the excise department. But he wrote down facts – that the individual limit is 9 litres, that 14 litres were found in a house having two adults above the age of 25. Although my in-laws were also there, it was good they did not drag them into it. Later on, I found that they added one more section to it. It is a section which has been used just seven-eight times in the last 50 years. This section pertains to smuggling of liquor. I was accused of smuggling liquor.

Smuggled from where?
That is matter of proof. You must have heard a Commissioner of Delhi Police once say that a person has to prove his innocence. It puts the jurisprudence on its head, that is, they have registered a case against me for smuggling liquor and I have to prove I did not smuggle it.

Did they leave your residence by the evening of Dec 15, 2015?
They left by evening, but they asked me to come along to the CBI headquarters. I went. I was taken to the DIG's [Deputy Inspector General's] room. The DIG was watching TV.

That DIG was Sanjeev Gautam?
Yes. The news about the search on my residence was there on TV. His first reaction was, "Why don't you tell your chief minister not to use the kind of language he is employing? [Kejriwal had tweeted,"Modi is a coward and a psychopath."]

I was aghast. I told Gautam he is chief minister, it is for him to decide what he wants to speak, how can I stop him?

Gautam said, "You work for him, you guide him, you advise him, and now you are saying you can't advise him?"

Did you know Gautam beforehand?
I had never met him. He then said, "I understand there are criminal cases against you?" I said I didn't. Gautam said he had information that I had been called by the CBI earlier as well. I have never been called by any agency before, I said. After an hour or two, I was told I could return home, but I should return to the headquarters the next morning.

What was the night like at home?
My friends and relatives were there. They were very worried.

Did these friends also include some from your service as well?
Yes, they were there as well. They were worried because they were sure I would be arrested. When you start to abuse the process of law, then there is no limit. When you can file a false FIR, misguide the court to obtain a search warrant, when you can search the office, well… I don't want to speak on the legality and motive of searching my office except that even if I did something between 2007 and 2012, the files wouldn't have been kept in that office but in the departments from which contracts were granted.

Was it to find out something against Kejriwal?
I wouldn't want to speculate on their motives, but the next morning when I went over to the CBI headquarters, they said they didn't have anything against me…

'They', meaning Gautam?
Gautam and another CBI inspector. They said I could be free if I so want but only that I would have to give things and evidence which could implicate Person X.

They didn't spell out X's name?
They did.

So was X Arvind Kejriwal?

They said that without ambiguity?
Yes, they did. Not only then, but on all the five days they called me.

Are you saying that after five days, they stopped harassing you?
They didn't call me, but just about everyone I knew, they called… They went into my past…

You mean to say even those who weren't in government service?
Everybody. They called almost 300 to 400 people.

300-400 people!
I don't think they have called so many people even in the coal or 2G scams.

This is where their possession of your gmail account must have come handy, for tracking down people whom you know.
Before they raided my house, they had nothing. From my gmail account, they stumbled upon a mail from a person saying that such and such housing society is coming up and whether I would like to become a member of it. Even the person who had sent this mail was called.

Did the sender of this mail know you?
He knew me – and for a very long time. He is a co-accused as of now. That housing project has 350 flats, and even at the time of recession, they sold 300 of those. Of the 300 purchasers, they called almost 175 of them. They were mostly government officials. To each of them, they said your property belongs to Rajendra Kumar and that they were holding it as benami.

The person would plead that he didn't even know me. To it, they would ask him to prove ownership. All these 175 people had to submit proof of purchase. But it didn't end there. They would inquire whether they had intimated the government about the purchase. They would then bring their notice of intimation.

Three or four of them hadn't, as it often happens, because they were lazy. They filed disproportionate asset cases against them. They went as far as beating some of them.

Beaten up whom? A few of the nearly 175 people they summoned?
At least, a dozen of them were beaten up. They were beaten severely, not once, but over multiple days.

Were the people who were beaten closer to you than others who were not?
No, they were on a look out for those who seemed to have money and who could therefore say that their money belonged to Rajendra Kumar.

So they were harsher on those who were relatively wealthier?
Yes. One person was slapped so hard that he underwent a permanent loss of hearing. He said this in the court.

Whose doing was it? 
The person who lost his hearing was slapped by a DSP [Deputy Superintendent of Police] from the CBI. When I was taken into police custody [in July 2016], I had once seen them beat a person, a co-accused, who was made to stand on his feet, asked to raise his arms, and they beat him up from behind. He later told me that they wanted him to become approver, name me.

None of these guys who were beaten up agreed?
One of them did. It is a person who I have never met. He is not one of the accused.

How many accused are there in the CBI case, which pertains to the contracts given to Endeavour Systems Pvt Ltd?
There are seven besides me. They went to my ancestral house in Patna. It was purchased by my father before my birth. They went to my house in Greater Noida, which was on rent. They threatened the tenant, who left even before the expiry of rent lease. They went after the Chartered Accountant who used to file my tax returns.

He would come to me once every year, in July, at my office. They obtained his number from my mobile phone which they seized once they took me into police custody. They raided the CA's house and found Rs 27 lakh. I don't know whose money it was.

I suppose those who were beaten must have been bitter about it. What did they tell you?
They never told me anything. They were co-accused in the initial FIR that was filed on December 14, 2015. There were five of them. Two others were added to the chargesheet they filed in the case, one of the names was dropped. All that I know about the chargesheet is through newspapers. I haven't yet got a copy of the chargesheet. But it wasn't as if only the co-accused were beaten.

What was it like to be taken into police custody in July 2016? It must have shaken you.
Definitely not. But first, why did they need to arrest me in July? After all, they had, by March, stopped calling people and beating them up in the hope that they would implicate me somehow. My guess is that I continued working as hard as I used to. They wanted to remove me from there [as Kejriwal's principal secretary]. Since I had continued to work, they thought once I was arrested I will get suspended. They succeeded in achieving their purpose.

Did you ever come close to cracking up?
You see, I had answers to all their questions. There was just a bidding of theirs I wouldn't do – and that was about naming the chief minister. They beat up people to force them into naming me. They arrested me to name the chief minister. After all, what was the purpose of seizing files from the Chief Minister's office in 2015? They would show me these files and ask, "Isn't this your signature?" I would say yes. They would then ask, "Did the chief minister ask you to sign?"

I told them it is my job to monitor schemes and projects that the chief minister has assigned. I don't have to seek the chief minister's approval or anybody else's to sign on these files, as my monitoring is supposed to improve the projects.

After how many days did the suspension order come once you were arrested?
The rule says that anyone who has been in police custody for more than 48 hours, he is deemed to be under suspension. So they issued the suspension order on July 6, 2016. They knew of the arrest, so they were ready with the order. They issued just after the expiry of 48 hours.

After three months, the suspension order is supposed to be reviewed. There is a Supreme Court order, and there is a Department of Personnel, Government of India, rule as well, that if within three months in cases such as mine, a chargesheet is not served for (initiating) disciplinary proceedings, the suspension shall not be continued. But my suspension has continued.

Haven't you moved the court on this count?
I haven't. I will, again, say I have faith in the system. When the law itself says that the suspension cannot [be extended], why should I believe they would do otherwise? Later on, I gave a representation to the Ministry of Home Affairs, to the Chief Secretary, in the belief that in an extreme, extreme case, the government's circular might have gone un-noticed. However, I still remain under suspension.

Doesn't that fill you with anger?
When the raid happened, and even after my arrest, I thought to myself that if I were to ask citizens of the country whether they would change their place with me, that is, I go take their place and they take mine, with all the problems I have been entangled in, my answer was that 99% of citizens would like to take my place. This means that even in the situation that I am, I am still better off than 99% of the people of this country.

Why should I get angry then? It is the system which has failed. The most important thing for me is that when I stand before the mirror, I am able to look into my own eyes.

I will not say I have done no wrong in my life. I have fought with my sisters and friends, I might have sometime used the pen from my office for my personal use, I am not saying I have never sinned, so to speak.

So your solace in all this is that you can still look into your eyes?
Yes, and that has been my endeavour all my life. But the important point is that if the system can do what it has to me, Principal Secretary to the Chief Minister, to an IAS officer of 26-27 years of standing, who has received top awards, including the prime minister's award for excellence in civil service – which I got in the second year of its institution – plus four national awards for e-governance, then think of what can happen to millions of people who have been wrongly framed.

I can speak out, I have people who support me, but there are millions who are framed out of vengeance, who are framed to fix them politically, think of them.

This is not the democracy we want. This is why it is necessary to tell people what has happened. What has happened may have happened physically to me, but it also tells you how agencies behave. It isn't just the CBI, but also the Anti-Corruption Bureau, the income tax department, the Home Ministry… At one time, I was told that even the Enforcement Directorate was likely to register a case against me.

Well, what is to be done when these institutions don't stand up? Or do you think the blame lies on the political masters?
Institutions are inanimate, and the people who run the institutions are important. The coercive powers of the state are confined to certain people – it could be the officer in-charge of a police or the tehsildar or the income tax officer – and if they stand up, then no political set-up can misuse them. Either they are too weak to stand up or they have their own issues because of which they are scared of standing up.

Can you recall a case similar to yours, in which a civil servant has been harassed to fix a political rival?
I have never seen it. My case has no precedent, as far as I can recall.

What is the status of the case?
In what will go down as the rarest of the rare case, the CBI has filed a chargesheet without securing approval for prosecution. This the CBI manual says, but in my case they have done it without securing the government's approval for prosecution. But the approval will come from the Home Ministry.

You have, anyway, decided to go for the Voluntary Retirement Scheme.
I have, but I am sure they will put obstructions in that as well. They haven't understood one thing – that if a person doesn't get scared, you cannot scare him by any means. After all what I have gone through, why should I get scared by them not granting me VRS? I cannot allow these people to run my life. Let them not give me VRS, there are so many other options.

Ajaz Ashraf is a journalist in Delhi.