Dispossessing many to favour few & corner fruits of development
by Sandhya Jain on 13 Nov 2012 5 Comments
The word ‘reform’ was always a mask to conceal the truth that this Congress-led regime was going to restructure the Indian economy in the western capitalist way, with governance geared towards creating a society for the One Per Cent, and cussed indifference even contempt for the leftover Ninety Nine Per Cent.  An indication of the new ideology was first given by Delhi chief minister Sheila Dikshit who made privatisation of electricity distribution one of her first acts on coming to power.

Besides creating a new profit-seeking class in control of an essential commodity, she allowed all permanent employees of DESU to be phased out by the private firms and replaced by daily wagers. This pioneered the One Per Cent culture in the Public-to-Private ownership model that the Congress-led UPA energetically promoted when it came to power in 2004. In Delhi, the private firms that got the entire DESU assets and infrastructure free, hiked power tariffs by over 80% in one decade even though there was no proportionate rise in urban incomes.

The reason for privatizing power distribution came to light in the coal mining scandal, Coal-gate. Captive coal mining was mooted in 1993 for private firms producing power, iron and steel, to supplement Coal India. Under Coal-gate, UPA made discretionary allotments of coal blocks for captive mining. The Comptroller & Auditor General found that many blocks were sold for profit; some not developed because their reserves were not considered rich; and some had problems obtaining environmental clearances. Overall, only 29 out of 195 blocks were actually in production in 2010-11. Thus, captive coal mining did not solve the coal shortage problem. Worse, some firms were found selling coal to the merchant power sector instead of using it for captive industry!

A shocking scam uncovered in this period involved a 999-year lease of a captive coal mine in Jharkhand’s Ramgarh district for an annual rent of Rs 3250/ bigha (25 paise/bigha for 13,007 bighas!) Worse, Tata Steel was selling 55% of the coal commercially and dodging royalty to the tune of Rs 75 crore. The original lease began in 1946, and should have been terminated within 30 years once the Mines and Minerals (Development and Regulation Act) 1957 came into force in 1957. As many as 57 firms benefitted from Coalgate. The controversy about Congress MP Naveen Jindal’s Jindal Steel and Zee TV also centres round Coal-gate.

Liquor baron Vijay Mallya’s Kingfisher Airlines is the epitome of crony capitalism. The UPA went out of the way to help the airlines despite its persistent failures; the then Corporate Affairs Minister M Veerappa Moily said that the airline “had to be saved” (much like the ‘too big to fail’ banks in America). Mallya, a Rajya Sabha MP, was even appointed to the Consultative Committee for the Ministry of Civil Aviation despite the obvious conflict of interest.

Finally, unending violations and overdues of Rs. 300 crore to the Airports Authority of India forced suspension of Kingfisher’s licence. Cheques issued by Mallya bounced but he remained unfazed until the wife of an unpaid staffer committed suicide due to financial stress and public outrage made it difficult for the government to protect him. As employees not paid salaries since March decided to encounter him at the Formula One Grand Prix at Greater Noida where his team, Sahara Force India, was participating, the tycoon quickly arrived at an agreement to pay staff partially by Diwali.

But Kingfisher has a debt of about Rs 8000 crore from public sector banks and an additional debt of Rs 7,524 crore which has not been serviced since January (Kingfisher Annual Report 2012). The UPA needs to inform the public how it intends to recover these dues.

The most sensational UPA scam is the 2G Spectrum scam where different ministers connived to fix the license fee allotted (to select favourites) by then Telecom Minister Andimuthu Raja in 2008, instead of auctioning the sparse spectrum. The Supreme Court highlighted the gravity of the scam when it cancelled 122 telecom licences in February.

Finally, the Central Board of Direct Taxes is investigating the Unitech Group, Etisalat DB Telecom Pvt. Ltd (original Swan Telecom of Shahid Balwa), Reliance Communications Ltd, Videocon Telecommunications Ltd, Tata Realty and Infrastructure Ltd, Loop Telecom, Cineyug Entertainment, Kusegaon Fruits and Vegetables Pvt. Ltd and Kalaignar TV regarding the source of funds for the 2G licences, the tax implications on dilution of their stakes and equity to foreign companies after receiving licences, the issuances of shares to foreign companies at different prices, and the money paid to foreign vendors for purchase of goods.

The Aircel-Maxis deal is a scam within the 2G scam. Former telecom minister Dayanidhi Maran and his brother Kalanidhi Maran allegedly received Rs 549 crore as illegal gratification for their role in the acquisition of Aircel (Siva Group) by Malaysia-based firm Maxis Communications. The collection was made in the garb of premium share investment in family-controlled Sun Direct. In its status report to the Joint Parliamentary Committee, the CBI said that as telecom minister, Maran blocked legitimate requests of Dishnet DSL (Aircel) and forced the Maxis takeover. 

Naked loot of public resources is the signature tune of the UPA. A recent scam that has come to light is the theft and export of “thorium-rich sand” in Tamil Nadu. Thorium can free the country from dependence on uranium imports to power nuclear plants. Experts say that at $5,000 per tonne, the exchequer has lost at least Rs 48 lakh crore since UPA came to office in 2004 because roughly 2.1 million tonnes of sand has disappeared.

No story on cronyism is complete without mention of Robert Vadra who appears to have leveraged his political connections to amass staggering wealth in landed property worth Rs. 300 to Rs. 500 crore in just the last four years. Though Vadra has purchased at least 31 properties in and around Delhi, an analysis of the balance sheets and audit reports of five companies owned exclusively by him and his mother from Nov 1, 2007 show a total share capital of just Rs 50 lakh. The companies together had no income from any legitimate business activity (except by way of interest derived from interest free loans obtained from DLF). As Congress ministers publicly defended Vadra, he himself reportedly made a discreet exit to Dubai. 

UPA had from the very first decided to use its term to exploit real estate for itself and its cronies. Previously, governments would earmark backward regions as SEZs and give special concessions for setting up private industry and providing local employment to stimulate the economy. Under Sonia Gandhi, the concept of SEZ changed into gifting chosen industrialists with huge land banks where they could profiteer by building residential and commercial estates, five star hotels, and so on, at the cost of expropriated farmers. Though Congress expelled Kuldip Bishnoi for protesting against the new SEZs, public outcry virtually aborted the SEZs.

NCP President Sharad Pawar actively lobbied for the Lavasa private hill city without disclosing that his daughter Supriya Sule and son-in-law Sadanand Sule had over 20 percent stake in the project. Besides controversies connected with the project itself, questions are being asked about the source of funds with which the Sules bought the stake which they later sold for an undisclosed sum, ranging, according to retired cop YP Singh, between Rs. 1000 – Rs. 2000 crore. Interestingly, in an affidavit before the Election Commission, Supriya declared total assets to the tune of just Rs. 15 crore, though RTI activists have unearthed scores of high value investments by the couple.

The list of scams associated with UPA’s ‘reforms’ is endless. The latest at the time of writing is the transfer (read virtual sack) of Petroleum Minister S. Jaipal Reddy for refusing Mukesh Ambani’s pressure to revise the price of gas prematurely, thus saving the exchequer of thousands of crores of rupees. Reddy also disapproved of the steep decline in gas production from the KG D6 gas block off the Andhra coast and insisted that Reliance Industries submit to a CAG audit.

In the prevailing atmosphere of unending mega scams upon scams, the alleged misappropriation of funds for physically challenged persons by an NGO run by the family of Salman Khurshid, since elevated as Minister of External Affairs, is like small change. Sonia Gandhi’s move to convert public trust properties into private estate (National Herald and associated newspapers) is more serious, and merits a thorough investigation.

All this leaves us with little hope that there will be any positive moves to contain corruption and sleaze in public life during the tenure of the UPA, or that it will be serious about retrieving the billions reportedly stashed away in offshore havens. While the United States and Germany have forced Switzerland to get back money hidden abroad, India has made only perfunctory moves despite the growing seriousness of the problem. The UPA is like a dark cloud with no silver lining in sight.

The article was written for the Diwali special issue of Organiser weekly

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