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Activist Indian bureaucrat creates political sand storm

A young member of India’s much-maligned civil service has created a major political uproar by taking on politically connected sand mining companies in India’s largest state.

Durga Shakti Nagpal, 28, named for the Hindu goddess of the triumph of good over evil, is a member of the elite Indian Administrative Service (“IAS”), the successor to the colonial service that was called the steel frame of the British Raj. While the IAS has been described as the worst bureaucracy in Asia, there are periodic examples of IAS officers standing up against vested political and economic interests.

Ms. Nagpal, pictured above, has attacked the illegal sand mining feeding the building boom in Noida, a fast-growing area of once-agricultural land bordering the capital of New Delhi. Mining has continued unabated despite court orders from numerous courts including the Supreme Court. The dredging from the shores of local rivers is substantially degrading the environment and potentially altering the courses of waterways. Foreign private equity investors reentering the Indian real estate sector, which has taken a beating, probably have some due diligence ahead of them: the web of corruption underlying construction in India is not limited to sand mining in one state.

Ms. Nagpal cracked down on the mining, seizing unauthorized truckloads of sand and suspending a potentially rigged auction of the seized sand. The chief minister of Uttar Pradesh suspended Ms. Nagpal, allegedly for demolishing a mosque wall built illegally on public property. Uttar Pradesh is a politically critical state, with a population greater than the United States. Her suspension has created a national political furor.

While examples of rectitude such as Ms. Nagpal are common enough, the IAS is hardly the saintly victim of political pressure it likes to paint itself. No political party has ruled India so long as the IAS has governed the country. The IAS technocrats never face election, and many of the ills of the foundering Indian economy can be attributed to the recalcitrant policies of the bureaucracy.

As a veteran politician recently put it, “Bureaucrats were to be the checks in the system..[but] [t]he checks have turned into cheques while the balance is out of the window.”

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Russell Stamets is a Contributing Editor of the FCPA Blog. He was the first non-Indian general counsel of a publicly traded Indian company and was general counsel for a satellite broadcasting joint venture of a large Indian business house. Russ can be contacted here.

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