Rahul Gandhi, the Gandhi family scion and the vice-president of the Congress party, is back from his two month holiday (57 days to be exact). And if nothing else, he surely has discovered his political machismo during the period. Speaking in the Lok Sabha today (April 20, 2015) Rahul said that the Narendra Modi led National Democratic Alliance(NDA) government was a government of industrialists, or as he put it: ‘suit, boot ki sarkar‘.
In a speech he made at the Ram Lila Maidan in New Delhi on April 19, 2015, he made similar allegations when he said: “Let me tell you how Modi ji won the election. He took loans of thousands of crores from big industrialists from which his marketing was done. How will he pay back those loans now? He will do it by giving your land to those top industrialists. He wants to weaken the farmers, then snatch their land and give it to his industrialist friends.”
There are multiple points that need to be made here. Is Rahul Gandhi trying to suggest that the Congress party did not get corporate funding to fight the 2014 Lok Sabha elections? Is he trying to suggest that the Congress party has never got corporate funding to fight elections? Is he trying to tell us that the Congress party has never used “black-money” to fight elections?
Or is it more a case of sour-grapes—the fact that when it came to the 2014 Lok Sabha elections the corporates where on Modi’s side, given the sordid performance of the Manmohan Singh government. As Jairam Ramesh told The Times of India after the Lok Sabha elections: “We were out-campaigned, out-manoeuvred, out-funded and out-spent by Modi.” So, it is clearly a case of sour grapes for Rahul. Also, in all these years that Congress was in power, why did it never try to clean up political funding? Does Rahul have an answer for that?
Rahul, further said in his Lok Sabha speech that: “You know as well as I do, that this government is one that works for industrialists.” So, does this imply that the last Congress led United Progressive Alliance government did not work for industrialists?
If that was the case then why did so many scams involving corporates happen in the second term of the Congress led UPA government? Was the telecom 2G scandal a creation of the Modi government? Did the Commonwealth Games scam happen under the Modi government? Did the coalgate scam, where the governments loss lakhs of crore happen under the Modi government?
Rahul also suggested in his two speeches that the Modi government is hell bent on taking away land from the farmers and giving it to corporates. The question is what were multiple Congress governments doing since the independence?
Until 2013, the land acquisition act 1894, governed land acquisition in India. A 1985 version of this Act stated: “Whenever it appears to the [appropriate Government] the land in any locality [is needed or] is likely to be needed for any public purpose [or for a company], a notification to that effect shall be published in the Official Gazette [and in two daily newspapers circulating in that locality of which at least one shall be in the regional language], and the Collector shall cause public notice of the substance of such notification to be given at convenient places in the said locality.”
The language of the 1894 Act shows that it gave unlimited power to the government to acquire land. This wasn’t surprising given that the law came into being when the British ruled India. The Act allowed governments all over India to acquire land from the public. Many governments passed on this land to corporates, and in the process both the government and the corporates made money.
The only one who did not make money was the individual whose land was being acquired. Of course, this did not go unnoticed. People saw politicians and corporates making a killing in the process. And the trust that is required for any system to work completely broke down. The various Congress governments which led the country between 1947 and 2013(nearly 66 years) chose to do nothing about it. In 2013, the Congress led United Progressive Alliance (UPA) brought in The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013.
By ensuring that corporates got land on a platter, the Congress party essentially helped build a system of political-corporate corruption. Further, given that governments acquired land for them, Indian corporates have become lazy over the years. Also, many of them started to see themselves as landlords and wanted land just for the heck of it. This can be said from the inefficient use of industrial land in India. Narendra Modi had no role in building this system. He just inherited it.
And there is more. Along with the budget document, the government releases a statement of revenue foregone every year. “The estimates and projections are intended to indicate the potential revenue gain that would be realised by removing exemptions, deductions, weighted deductions and similar measures,” the statement points out.
For the year 2014-2015, the government is expected to forego revenues of Rs 62,398.6 crore because of exemptions and deductions given to corporates. Interestingly, the bigger the corporate the more deductions and exemptions they take. Corporates which make an operating profit within the range of Rs 0-1 crore have an effective tax rate of 26.89% Those in the Rs 50-100 crore range have an effective tax rate of 24.29%. Whereas those making a profit of greater than Rs 500 crore have an effective tax rate of 20.68%. The overall rate is 23.22%. This is not a recent phenomenon. It has been true for many years.
Who has built this tax system which favours the corporates? The Congress party is the answer. The party has been in the government in every decade after independence. Narendra Modi has not been in power even for a year. Once these factors are taken into account, the only thing one can say is that Rahul’s “suit boot ki Modi sarkar,” comment, stinks of hypocrisy. Guess, the two month sojourn hasn’t done him much good.
(Vivek Kaul is the author of the Easy Money trilogy. He tweets @kaul_vivek)
The column originally appeared on Firstpost on Apr 20, 2015