The BJP on Wednesday accused former Finance Minister P Chidambaram of being involved in a “downright racket” in granting private firms, especially diamantaire Nirav Modi-owned Gitanjali Gems, gold import benefits just a day before the results of the 2014 Lok Sanbha elections were announced.

Addressing a press conference at the BJP headquarters, Law Minister Ravi Shankar Prasad and Minister of State for Agriculture Gajendra Singh Shekhawat said that on May 15, 2014, a day before the general election results, Chidambaram allowed a new policy that changed the 80:20 gold import scheme launched on August 14, 2013. Prasad said a policy aimed at improving the fiscal health of the country was overturned to give undue benefits to private firms.

“It was a downright racket. It is our clear charge that under extraordinary pressure of vested interests, Chidambaram took this decision a day before the results. The nature of interest is clear from the way the file travelled with supersonic speed to nine desks in one day, on May 15, 2014. Chidambaram knows the Constitution, he was aware of the democratic propriety which prescribes that you don’t take a policy decision a day before the election results. What was the price, pressure and obligation Mr Chidambaram which made you change a policy affecting the Nation’s fiscal health a day before the election results,” said the Law Minister.

Prasad asked former Commerce Minister Anand Sharma, who has described these charges as “absurd”, to apologise and retract the statement. Sharma has maintained that the government is “manufacturing” documents to malign political opponents and divert attention from the estimated ₹27,000-crore fraud by Nirav Modi, Mehul Choksi and Jatin Mehta.

According to the Law Minister, a policy decision was taken by the UPA government restrictions on August 13, 2013, to place restrictions on the import of gold — known as the 80:20 scheme — at a time when huge imports of gold were putting a strain on the country’s foreign exchange as well as the current account deficit (CAD).

“The situation with regard to CAD was critical by 2012-13. The government decided that only the public sector entities such as the SBI, MMTC, STC and possibly Bank of Baroda were declared as nominated agencies to handle gold import and export. All jewellery exporters were to operate through public sector entities. But then the elections approached and the traders clearly felt that with Modiji’s certain victory, they will not have the necessary clout. So they put pressure on the incumbent government to act before Modiji arrived on the scene.

“Anand Sharma says it is ‘absurd’ to suggest that the gold scheme was used by Chidambaram to benefit Nirav Modi. But Anand Sharma, you do not do your home-work. Chidambaram is cleverer than you and me. He did not sign the file on May 16 but he committed a bigger sin. He signed it on May 15, a day before the results, and allowed star trading houses which include premier trading houses such as Gitanjali Gems to import gold. On May 15, 2014, the file passed through nine desks within a day in supersonic speed,” said Prasad.

“He changed a policy decision which was aimed at creating better fiscal health to benefit private interests. Under the new rule, which the RBI diligently followed, the private firms could import from whichever port they wanted. No verification of their antecedents was required. Why was this critical decision taken in complete violation of the model code of conduct a day before the election? Did the lame duck government at the time ask the Election Commission for permission?” asked the Law Minister.

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