Ponzi-Pyramid, NPS and the Pious Fraud

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TMC MP Kunal Gosh’s arrest perhaps has refreshed your memory of the horrific Saradha scam. If not, let me remind you. Saradha group of companies looted thousands of crores of rupees from the poor people of the states of West Bengal and Assam. It is alleged that West Bengal Chief Minister was fully aware of the detailed functioning of the company and her party was getting maximum benefits from the satellite television channels and newspaper owned by the company. Kunal Gosh claimed that those media houses were working under the direct instructions of TMC. In fact Mr. Gosh claimed that he was compelled to sack one of his editors to satisfy Didi! Same things happened in Assam. Saradha CMD Sudipta Sen himself alleged that a powerful minister of Gogoi cabinet, top cop of the police administration, journalists and even so called artists were benefited out of his fraudulent company.

Saradha was not the only company to loot the hard earn money of the poor investors of the state. There were many other ponzi companies like ABYSS, Ramel etc etc. We also noticed the operation of the fraudulent pyramid companies like Unipay2You, Royal Forex, Sambav etc in Assam. Those companies also looted thousands of crores. Some of the perpetrators were booked and many got spared.

Another such possible threat of pyramid scheme is going to be exposed through this article.  It may be shocking for you to know that government welfare scheme National Pension System is going to be used as a tool to fool the poor people of the state by some pyramid fraudsters.


National Pension Scheme is a social security scheme by government of India. It is meant to provide a secure retirement life to the citizen of the country keeping in mind the inflation, rising cost of living as well as increased life expectancy. Swavalamban Yojana is designed for the workers of unorganized sector under NPS. It is expected that the scheme will benefit the poor workers to great extend. Under this scheme if the subscriber pays a minimum yearly contribution of Rs. 1000 and maximum Rs. 12000; government will contribution another one thousand to their pension account i.e. Permanent Retirement Account Number (PRAN). This scheme will continue to till FY 2016-17 and may be extended also. No doubt it’s a very good scheme for the poor unorganized workers.

Now let’s see how the pyramid fraudsters are planning to the fool those poor unorganised workers. In the first week of this month (Nov’2013), an NGO (Non Government Organization) is register under the Societies Registration Act 1860. The organization has designed such a plan that you even can’t raise question to their noble (?) initiative! They will organize awareness camps to promote Swavalamban Pension Scheme (PRAN CARD). To get involved with the campaign you need to donate only Rs. 500/-. Yes! This is not a big deal. In fact they will be helping the poor to get their legitimate entitlements! But they have different plan to benefit you as well. What is the actual plan?

The subscriber needs to pay Rs. 500/- and the organization will liaison with the Point of Presence (PoP) to open his/her NPS account. Pension Fund Regulatory and Development Authority (PFRDA) have identified 58 PoPs all over the country. PoPs are basically banks (both PSU and private), private financial institutions and Department of Posts. The next move is very interesting. The subscriber will be qualified for an income as soon as he adds three subscribers (A, B and C) in his immediate downline and A and C again add three subscribers each as their immediate downline. The first subscriber (Top of the pyramid ToP) will get a bonus of Rs. 200/-.

Now, calculate the total amount received by the organization. The organization had added 13 NPS subscribers so far and had collected Rs. 6500/- from the bottom of the pyramid (BoP). The organization will be incurring the expenses Rs. 1300/- for their PRAN card and Rs. 200/- as bonus to the ToP. Thus their net profit is going to be approx Rs. 5000/- from the one single ToP!


Remember if the ToP somehow fails to add a single subscriber he/she will not be eligible to get the bonus amount of Rs. 200/-.

The organization has also a very lucrative award and reward plan. If there is a 100 pairs of countable (A and C only constitutes countable pair, B is not countable!) subscribers, the ToP subscriber will get a tab and if there is 25000 such pairs under the ToP, he will get a Skoda car!


Let us make it easy to guess the total benefit of the pyramid organization from such single ToP subscriber 25000x3x400=30000000. Yes, you are not mistaken; the fraudster can earn a hefty amount of approx Rs. 3 crores! So, giving a skoda car as incentive is not a big deal! We shouldn’t forget that the huge income of the fraudster is nothing other than the great loss to the poor people of the state.

Now let’s examine why such scheme is viable to operate in Assam only. The reason behind the rise of ponzi schemes like Saradha, Jeevan Suraksha, Ramel etc is same with the case of this pyramid schemes. Lack of financial literacy, financial inclusion and the anti-poor attitude of the formal financial system are the major reason behind this menace. Financial literacy is a must to protect the financial vulnerability of the poor of the state. Moreover, the status of financial inclusion is worse in Assam. Business Correspondent model ‘Swabhiman’ has become a liability for the banks. At the same time the 58 PoPs identified by Pension Fund Regulatory and Development Authority (PFRDA) are not poor friendly. The fraudsters can read the weakness of the financial system in Assam and they are making cash on it.

This fraud scheme is reaching the interior parts of the state like wildfire. Districts like Barpeta, Nagaon, Dhubri etc are more prone. In fact a huge network has already been built within a couple of days. Some of the subscribers are even thinking that this is the only way to get the PRAN card!

The fear is not only to lose the Rs. 500 alone, but to lose the entire life savings of the poor unorganized workers. Our fear is based on some crucial documents. We have accessed some documents which clearly indicate that even some of the government machinery is also involved in this fraud campaign. We are not disclosing those documents here to help the administration to nab the fraudsters.

We hope, government will wake up and take action against those fraudsters.

Celebrated Diwali with Street Children : A Life Time Experience

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My friend Nilesh called me before Diwali and shared a plan to celebrate this Diwali differently. We pledged not to crack the fire crackers. As per the plan we reached Lakhtakia area of the city at 6pm on the day of Diwali. We, a group of the 10 youths from Tata Institute of Social Sciences and Gauhati University and Mr. Indrajit Sinha, a post graduate from Rajiv Gandhi Nation Institute of Youth Development assembled beneath the fly over. Mr. Sinha is the Director of “We Are Young” foundation. The young director briefed us about the programme, dos and don’ts etc.

As per the programme we started moving towards Fancy Baazar area to meet the street children and wish them “Happy Diwali” as well as to share sweets, chocolates as a part of our Diwali celebration. We got scattered and approached the children individually. One the major objective of the programme was to sensitise ourselves about the issues related to the street children. We loved the idea!

Diwali 3

I moved towards Sani Mandir area, one of the busiest streets of Fancy Bazaar. I first encounter with Mamata Kumari, a 7-8 years old girl child. I approached her, offered her a laddoo and tried to chat with her. But she was not interested to talk to me and even I felt she was not happy to get the sweet. I tried to know about her family. Her mother is physically challenged, can’t walk. Her father works in a hotel in railway platform. Her elder sister collects scrap. And she begs!

–          How much you earn per day? I asked.

–          She replied “one hundred to two hundred per day!”

I was shocked! I couldn’t believe. I offered her 10 rupees note to know her arithmetic.

I asked:

–          Now what is your today’s income?

–          Two hundred and ten. She replied and asked for another ten rupees.

We talk many things. When and why they have come to Guwahati? Who are left in their family at Siliguri? Does she remember them etc etc.

She is smart, talented and cute. Moreover, she is an earning member of her family! I realise, why a small laddo couldn’t bring smile to her face? In fact, she is carrying the responsibility of an adult!

My next guest was a Guljar Hussain, he may be 4 to 5 years of age. He doesn’t know his father’s name, native address or even his mother’s name.

I asked:

Abba ki kore? (What your father does)”

–          Abba? Abba masjid banay. (Abba makes mosque). (I guess as mason)

I kept asking:

What you are doing here?

–          I, I stay in a fruit shop”.

What you do in the fruit shop?

–          Nothing

Then why do you stay in the fruit shop?

–          The shop keeper gives me food

I couldn’t ask any more questions. I couldn’t control my emotion. He opened a match box from his pocket and long (rope like) cracker. He puts the fire on and started walking towards the fruit shop. The light of the cracker made his face more pale and thirsty. I stood like a statue for a while!

I moved towards Sani Mandir. I saw a group of such children were surrounding Indrajit Sinha, our moderator, as he was distributing some chocolates among them. He finished his chocolates within seconds. I lost him somewhere.

I gathered some strength to talk to the children. This was a group. I targeted one, so that I can talk to him openly. He is Alam. I asked his full name “Alam only”. His native house is in Kalgachia in Barpeta district. I couldn’t continue the talk as others came. Everybody started talking to me. Manjul, Bishnu, Sunita, Munni, Ainuddin; everyone has a story to share. Manjul, he has five brothers in his house somewhere in Kalaitoli char. He is alone in Guwahati. He stays with Bishnu along with few others in Railway gate No. 3. They have their tarpaulin house.

Another cute girl, she was smiling while I was talking to Manjul.

I asked her:

What is your name?

–          I have no name (laughing out loud)

Who are there in your family?

–          Maa, Abba, three sisters and me

She is from Besimari. Two of her sisters and she use to beg here and elder sister work as domestic helper. Suddenly everybody ran away from me, even I couldn’t ask about her parents! I saw a person was distributing samosa after his prayer at the Mandir. Everybody surrounded him as like as our moderator Indrajit was!

I was returning to the place where we assembled first. A thought came to my mind spontaneously, when the communalism is a decisive factor in our national politics; Manjul, Bishnu, Alam and Sunita are living under the same tarpaulin, eating the same samosa and fortunately they all are thousands miles away from the vague called superpower INDIA!