The latest fleecing of poor and middle-class investors brought in an estimated $730 million, according to media reports, though public interest litigation filed in the Calcutta High Court by one lawyer says the amount is as high as Rs. 300 billion. ($5.5 billion) The head of the Saradha Group and accused mastermind of the scheme, Sudipta Sen, was arrested in Kashmir on April 23 after two weeks as a fugitive. He has maintained his innocence, and reportedly threatened suicide, saying he might not be able to repay investors.

Sen started out as a small-time property dealer in the late 1990′s in Kolkata. His Saradha Group in the past decade had interests in real estate, tours groups and newspapers and television stations, and eventually owned nearly 100 companies.

Data from India’s Ministry of Corporate Affairs reveals interesting details. Many were incorporated in a one-week period in January 2011. They shared an address: 455 Diamond Harbour Road, Behala, Kolkata. They each listed working capital of Rs. 5 lakh each ($9,196). Their email addresses were the same. India’s market regulator, the Securities and Exchange Board of India, began investigating the Saradha Group in 2010.

Three years after its investigation began, SEBI on April 23 ordered the company to pay back investors in three months. It has threatened to start a criminal case if investors don’t get their money back, according to NDTV. West Bengal sought Sen’s arrest, and the Congress Party has asked for a federal law enforcement investigation.

Here is how Saradha allegedly presented the scheme, according to NDTV: glossy brochures, abnormally high returns of 15 percent to 50 percent, an estimated 250,000 to 350,000 people investing their money and bringing others on board for 15-percent to 40-percent commissions. Starting amount for investment: as little as 100 rupees ($1.83). Also: promises of land and holiday packages. The scheme collapsed, NDTV said, as some policies matured and the group couldn’t pay up.

The responsibility for stopping such schemes lies with the state government, not the regulator. See this excerpt from an article in The Hindu Business Line. While SEBI investigates “Collective Investment Schemes,” the paper reported, state governments regulate the “chit funds,” or group savings funds that the Saradha Group used in this case. And the investigation has taken plenty of time to get anywhere.

West Bengal politicians have taken less action, and are accusing each other of ignoring the problem instead. The Left Front blames the Trinamool Congress for helping this group to flourish, while the government of Chief Minister and Trinamool leader Mamata Banerjee castigates the Left Front for allowing “cheat funds” to exist. Trinamool has proposed a 10 percent tax on cigarettes to raise money for a Rs. 500 crore ($9.2 million – actually $92 million. Editor’s error.) investor relief fund.

“All political parties are involved, at least parts of it — that is, individuals. … They are of course to blame,” said economist Avirup Sarkar of the Indian Statistical Institute. “In West Bengal, lots of people have gained from such schemes and they have made fortunes. Their names will come out eventually. Now we see the usual blame game between political parties. That is not going to change the situation. Poor people have lost money and that is not going to come back.”

Nor are their jobs. At least 10 Saradha Group-owned newspapers and television channels in West Bengal and the neighboring state of Assam have shut down in the past month. Did the journalists know that they were financed by a Ponzi scheme?

“Yes, we knew,” said one newspaper journalist who lost his job when the papers closed. He declined to be identified to avoid souring his future job prospects. “But they were paying good money, and we never thought that they would wind up the media organizations so soon.”

Others – poor people – reportedly killed themselves after losing most of their money in the scheme. What drew them to it in the first place? Sarkar said that the typical reason is financial illiteracy. And a journalist who works in the Burdwan district of West Bengal, where two people killed themselves because of the scheme’s failure, said that the temptation is too great to resist.

“Poor villagers find it much easier to invest in these schemes as they do not require too much documentation work, unlike opening a bank account or an account with the local post office,” said the journalist, who declined to be identified. “Also, the high interest returns are a lure.”

While the Saradha story has made plenty of headlines, it is far from the only Ponzi scheme that has surfaced recently. In March, India’s corporate affairs minister Sachin Pilot told Parliament that there have been complaints against 87 companies across India over Ponzi schemes. As many as 73 of those were from West Bengal. Ten were Saradha Group accusations, leaving another 67 to tackle. With the time it took to figure out that anything was wrong, it seems like defrauding investors may remain a safe bet for a while.

(An employee counts Indian currency notes at a cash counter inside a bank in Kolkata June 18, 2012. Reuters photo: Rupak De Chowdhuri)

Rahul Gandhi has his work cut out as the new Congress vice president. His speech at the party’s brainstorming meeting on Sunday impressed fans and critics, but it probably is too soon to celebrate.

While he may be the best choice to take charge of the Congress campaign before the 2014 elections, state battles could remain outside his control. No matter how good the 42-year-old Gandhi might prove himself to be, prevailing in the nine assembly elections happening this year will be a tough sell.

The opposition Bharatiya Janata Party is expected to retain Madhya Pradesh and Chhattisgarh, while electoral outcomes from the four states in northeast India are peripheral to Congress’s goals for the country at large. Gandhi will have to set his sights on Congress victories in Delhi, Rajasthan and Karnataka, but even then the task might prove too hard.

The biggest stakes are in the national capital where Sheila Dikshit has led the Congress to three consecutive wins since 1998. But her handling of the Delhi gang rape protests and perceived inability to ensure women’s safety in the city has diminished her popularity. Dikshit is still smarting from the party’s defeat in local corporation elections last year. Add to this tensions in the party’s Delhi unit, and Gandhi may have a real fight on his hands.

The other challenge is Rajasthan where the Congress government of Ashok Gehlot is facing dissent from within. The party faction close to CP Joshi, a minister in Manmohan Singh’s federal cabinet, has been at loggerheads with the chief minister. Infighting has hurt the party’s image and given the BJP reason to cheer. Gandhi will face a hard test there.

His best bet will be the southern state of Karnataka where infighting has seen three BJP chief ministers take charge in four years. Former BJP star B.S. Yeddyurappa has floated a new party, and may steal votes from the BJP. The Congress may have to deal with the question of leadership — who will spearhead its campaign here? There’s a campaign afoot to remove the party’s state president.

Will Gandhi be able to turn around the party’s fortunes by the end of 2013? Such a result in the state elections would silence critics who question his lack of political experience, but the task would be a rough one for any politician, even one with more experience.

Speculation has been rife lately within India’s centre-right nationalist party, the Bharatiya Janata Party (BJP), over who will be its candidate for prime minister in the 2014 general elections.

There were four possible candidates a few months back, but the choice seems to have narrowed to Narendra Modi, the controversial chief minister of the western state of Gujarat, or Sushma Swaraj, the party’s leader in the Lok Sabha, the lower house of India’s parliament.

The rumblings come from a restive faction that has tired of a leadership crisis in the party. This has become evident after warring factions within the BJP exposed themselves when anti-corruption activist Arvind Kejriwal accused party president Nitin Gadkari of illegally acquiring government land. BJP lawmakers Ram Jethmalani and Yashwant Sinha were among those who demanded Gadkari’s resignation in the wake of Kejriwal’s allegations and media reports that questioned the source of funding for Gadkari’s firm.

Modi seems to have the edge over his competitors, considering his performance as chief minister of Gujarat where he has brought uninterrupted power supply, smooth roads and a flood of investment. He also enjoys the support of the Rashtriya Swayamsevak Sangh (RSS), the right-wing volunteer force that controls the BJP.

Despite Modi’s advantages and the BJP’s record of not being known for surprises or risky manoeuvres, his candidacy is not assured.

The BJP knows that wresting power from the Congress party, which holds the government in a tenuous grip thanks to a coalition government, won’t be easy in 2014. And like the Congress, the BJP won’t be able to do it alone. It needs allies such as the Janata Dal (United) and its leader Nitish Kumar, chief minister of the impoverished state of Bihar.

Kumar’s party, a key constituent of the BJP-led opposition alliance in the country, the National Democratic Alliance (NDA), has repeatedly stressed that its alliance with the BJP will collapse if Modi becomes the NDA’s prime ministerial candidate. The 2002 communal riots of Gujarat that killed up to 2,500 people, have made Kumar wary. After all, he has the support of a large Muslim population in Bihar, and the last person they want to support is someone like Modi, who has faced criticism in India and abroad for failing to stop the riots and for reportedly encouraging them.

The BJP has also failed to keep Modi’s apparent friction with party president Gadkari under wraps. Senior RSS member MG Vaidya caused controversy by suggesting that Modi was stoking Gadkari’s resignation demand by a section of BJP leaders following the recent accusations against him.

As for praise showered on Modi recently by veteran party leader LK Advani and the BJP’s leader in the Rajya Sabha, or upper house of parliament, Arun Jaitley, that is unlikely anything more than campaign rhetoric. Swaraj herself has praised him, but you can read it the same way. What else would they say about a party comrade while campaigning on his behalf in his bid for re-election as Gujarat’s chief minister? Just remember that Advani and Jaitley remain contenders, however nominally, for the party’s nominee for prime minister.

However, some BJP members think that Modi must get the nod to build up the party’s voting base and settle its leadership crisis.

After all, it is Modi’s neat marketing of the “Gujarat development model” that has earned him praise from the urban middle class, which the BJP needs to cash in to get the numbers in the Lok Sabha.

But what if the scars of the Gujarat riots return to haunt Modi, not that they have ever really gone away? It will provide the Congress with a prime opportunity to resurrect its dwindling Muslim voting base across the country. At that point, BJP factions will try to eat their own, and NDA supporters likely will bolt.

It is here that Sushma Swaraj could become the compromise candidate. She enjoys excellent camaraderie with all the allies in the NDA, and is quite capable of bringing the BJP factions under one fold. She also doesn’t have the burden of buried skeletons — although she was criticised for her comments on foreign retail investment during a debate in parliament.

It is still a long way to go before the BJP makes up its mind, but it would be impossible to say with confidence that this conservative party will make a conservative choice when it at last must choose.

She is the daughter of Purno Sangma, former speaker of India’s lower house of Parliament, who was forced to resign from the Nationalist Congress Party (NCP) after refusing his boss’s order to withdraw his bid to become India’s next president. The NCP, a key ally of the Congress party, which rules India under Prime Minister Manmohan Singh in a coalition government, backs the Congress nominee for the post, ex-Finance Minister Pranab Mukherjee.

Agatha Sangma, an NCP member and representative of the Tura constituency in the northeast Indian state of Meghalaya, is:

- India’s youngest member of parliament, elected in 2008 at the age of 27

- the youngest ever junior minister (state and rural development, 2009)

She invited the ire of her bosses when she announced her support of her father’s candidacy in public forums and accompanied him to meet the chief minister of the state of Tamil Nadu, J Jayalalithaa, to seek support for his presidential run. The poll is on July 19.

Her comment to reporters on why she supports her father instead of the party’s choice sounds like rhetoric. She said that it is time the country got a president from one of India’s “tribes.” Since her father’s name was proposed by a tribal forum, which included her, Agatha Sangma’s support should not be seen as coming from the government or the NCP.

Indian political insiders don’t generally react well to such statements, and they didn’t this time. Her party bosses “censured” her, but did not expel her. Why? Precedent suggests that this is not a typical case.

Somnath Chatterjee, ex-speaker of India’s lower house of parliament, was expelled from the Communist Party of India (Marxist) in 2008 after he declined to leave his post rather than presiding over a trust vote of the Manmohan Singh government over an India-U.S. nuclear power/weapons deal.

About four months ago, Trinamool Congress party leader Mamata Banerjee forced the resignation of Railway Minister Dinesh Trivedi after he violated the party line by raising passenger fares.

Circumstances might be different for the NCP. The only other state outside Maharashtra where they have any notable presence is Meghalaya, and here they have to depend on the Sangma family, who say they represent the Garo tribe, for garnering the votes and the seats essential to maintain their national party status.

Purno Sangma’s two sons are also members of the NCP, and are legislators in the Meghalaya assembly. His eldest son, Conrad Sangma, is leader of the opposition in Meghalaya, which has a Congress government.

The Congress party that runs the show in the coalition government in New Delhi may have its own reasons that seem to have stopped it short of showing Agatha the exit.

Axing Agatha would have given Purno Sangma a free boost to his campaign for president and he could have gone around the country drumming up tribal sentiment with his daughter as exhibit No. 1 in the gallery of victims of petty Indian politics.

Agatha also is everything that the Congress party needs — in one package. She represents youth, women, the historically neglected northeast states and tribal communities. It would be difficult to find a replacement with a similar combination.

The question is: will it last? July 19 will be the day when we discover whether there was no axe to begin with or whether it was just taking a really long time to swing.