Crony capitalism has been alive and kicking in India for a very long time.
One of the original crony capitalists in this country was Sanjay Gandhi, son of the then Prime Minister Indira Gandhi. Sanjay was a Doon school drop-out and had apprenticed as a motor mechanic at Rolls Royce in Great Britain in the 1960s.
He wanted to build a low priced people’s car called Maruti. His mother was the Prime Minister of the country and her colleagues in the government and the Congress party went out of their way to fulfil Sanjay’s dream.
In November 1970, a letter of intent was handed over to Sanjay Gandhi by Dinesh Singh, the then minister for industries. As Vinod Mehta writes in The Sanjay Story “The letter of intent was granted ‘on the basis of a paper proposal with no tenders called for and no impartial study’ for the mass production of 50,000 ‘low-priced’ cars per year made entirely of indigenous materials. In short, Maruti was licensed to match the total output of the other three domestic car manufacturers.”
But just a letter of intent wasn’t enough to get the project going. Land was needed to build the factory where cars would be manufactured and before that money was needed to buy that land. In stepped Bansi Lal, the chief minister of Haryana. “To his credit it must be said that Bansi Lal was the first to spot Sanjay Gandhi as a man of the future, as a man to hitch your bandwagon to,” writes Mehta.
Bansi Lal offered land to Sanjay Gandhi for the Maruti factory and at the same time gave him a loan to buy that land. As Kuldip Nayar writes in Emergency Retold about Bansi Lal “He was unscrupulous; means never mattered to him, only ends did. From being a briefless lawyer he had risen to be chief minister in less than a decade, and he wanted to go still higher. It was he who gave Sanjay, a 290 acre plot for the Maruti factory at a throwaway price along with a government loan to cover the amount.”
Despite all the help from Bansi Lal and the union government, Sanjay Gandhi’s people’s car never got going till he was alive. Production started only when Japanese car manufacturer Suzuki was roped in after Sanjay’s death in 1980.
Something similar has played out in Haryana where the current chief minister Bhupinder Singh Hooda seems to have gone out of his way to help Robert Vadra, the son-in-law of Sonia Gandhi, the chairperson of the United Progressive Alliance (UPA).
The IAS officer Ashok Khema brings out this nexus in a 105 page reply to the report of the committee constituted by the Haryana state government (dated October 19, 2012) to inquire into the issues raised by Khemka when he was the director general of land records.
This is how the story goes. Sky Light Hospitality Private Ltd bought 3.531 acres (or 5 bighas 12 biswas) of land from Onkareshwar Properties Private Ltd for a consideration of Rs 7.5 crore. This sale was registered on February 12, 2008.
Publicly available data on the MCA 21 portal of Ministry of Corporate Affairs, shows that Sky Light Hospitality is a company that was incorporated on November 1, 2007. As on March 31, 2008, the company had a paid up share capital of Rs 1 lakh. Upto September 30, 2011, its total paid up share capital was Rs 5 lakh. Robert Vadra owned 99.8% of the company and the remaining 0.2% was owned by his mother Maureen.
The company selling the land i.e. Onkareshwar Properties was incorporated as a company on September, 28, 2004. Its paid up capital as on September 30, 2011, stood at Rs 25 lakh. Of this 98% was owned by one Satyanand Yajee and the balance 2% by Godavari Yajee.
Paid up capital is the total amount of the company’s capital that is funded by its shareholders.
Various media reports have clearly established the link between Yajee and Hooda. A report published in The Economic Times today points out that “Satyanand Yajee, director of Onkareshwar Properties, which sold 3.5 acre in Shikohpur village to Vadra’s Skylight Properties, is general secretary of the All India Freedom Fighters Organisation(AIFFO) and is in charge of constructing and maintaining a memorial in the name of Hooda’s father Chaudhary Ranbir Singh in Rohtak.”
A report published in the Business Standard in October 2012, goes into even greater detail about the relationship between Hooda and Yajee. It points out the strong ties that Hooda has with the All India Freedom Fighters Organisation i.e. AIFFO. “Haryana Chief Minister Bhupinder Singh Hooda, too, has strong ties to this organisation. Before his death in 2009, Ranbir Singh, Hooda’s father, was working president of AIFFO. And, Hooda is a founder-member and working president of AIFFO’s sister body, All India Freedom Fighters’ Successors’ Organisation(AIFFSO), according to his profile in the Haryana Vidhan Sabha website.”
The report also mentions that AIFFO had spent lakhs of rupees in full page advertisements which praised Ranbir Singh’s contribution to the freedom struggle. As mentioned earlier Ranbir Singh was Hooda’s father.
Of course, just because Hooda and Yajee share a relationship does not mean that Yajee could not have sold land to Vadra.
So let’s get back to the land deal between Yajee and Vadra. Yajee’s Onkareshwar Properties sold 3.531 acres of land to Vadra’s Sky Light Hospitality. The price of the land was worth Rs 7.5 crore and over above this there was a stamp duty cost of Rs 45 lakh, for registering the sale.
As per Khemka’s reply, Vadra’s Sky Light Hospitality issued cheque number 607251 of Corporation Bank on February 9, 2008, to pay Yajee.
The question is how did Vadra’s Sky Light Hospitaliy with a paid up capital of just Rs 1 lakh(as on March 31, 2008) manage to pay an amount of Rs 7.5 crore for the land and Rs 45 lakh as stamp duty?
The answer lies in the fact that Sky Light Hospitality’s balance sheet as on March 31, 2008, shows a book overdraft of Rs 7.944 crore. This is almost equal to the amount of Rs 7.5 crore that needed to paid for the land, plus the Rs 45 lakh that needed to be paid as stamp duty for registering the sale.
What this basically means is that even though Sky Light Hospitality issued a cheque to Onkareshwar Properties, but the latter never got around to encashing it. As a report in the Business Standard dated October 16, 2012 points out “A book overdraft is not an overdraft at a bank but an excess of outstanding cheques on a company’s books over its reported bank balance.”
The notes to the account of Sky Light Hospitality also mention the same. “The overdraft shown in Corporation Bank account is book overdraft due to cheque issued before balance sheet date but not presented up to balance date, which is cleared after balance sheet date,” it is stated in serial no. 6 of the Notes To Accounts.
This can be confirmed from the balance sheet of Onkareshwar Properties as well. “Onkareshwar’s balance sheet as on March 31, 2008, showed an entry of Rs 7.95 crore under ‘sundry debtors’. This corresponds to the entry of Rs 7.944 crore book overdraft entered in Sky Light’s books. The land price was Rs 7.5 crore, and the balance Rs 45 lakh could have been registration and stamp duty costs. It appears Onkareshwar happily footed even these costs,” a report in the Business Standard dated Ocotber 27, 2012 points out.
So not only did Yajee’s Onkareshwar Properties not encash the cheque (it would have bounced if it tried to do so), it also happily paid the Rs 45 lakh stamp duty that needed to be paid to register the transaction.
The question of course is that if money did not change hands can the sale of the land to Vadra’s Sky Light Hospitality by Onkareshwar Properties be considered as a sale at all? This is something that Khemka points out in his reply. “If there was no payment as alleged in the registered deed, can it be said that the registered deed No. 4928 dated 12.02.2008 conferred ownership title over the said land upon M/s Sky Light Hospitality by virtue of the sham sale? Section 54 of The Transfer of Property Act, 1882 defines “sale” as a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised. There was no promise to pay in the future in the registered deed. No price was paid as claimed in the registered deed No. 4928 dated 12.2.2008. The “sale” registered in the said deed cannot, therefore, be called a “sale” in the true sense of the term, legal or moral, and it cannot be said that M/s Sky Light Hospitality became owner of the land in question by virtue of the “sale.””
On March 28, 2008, department of town and country planning of the Haryana government issued a letter of intent to Vadra’s Sky Light Hospitality for grant of commercial colony license for 2.701 acres out of the total area of 3.53 acres. This was done within a mere 18 days of application, writes Khemka.
He further points out that “Sub-section (2) of section 3 of the Act of 1975 mandates that an enquiry will be conducted by the Director of Town & Country Planning, particularly with respect to the title to the land and the capacity of the owner-applicant to develop a colony.”
The phrase to mark here is the capacity of the owner-applicant to develop a colony. In order to check this capacity the owner-applicant (in this case Vadra’s Sky Light Hospitality), under Rule 3 of The Haryana Development and Regulation of Urban Areas Rules, 1976, needs to furnish among other things, particulars of experience as colonizer and particulars about financial position as to determine the capacity to develop the colony, Khemka points out.
So what experience did Sky Light Hospitality have in developing colonies? If one looks at the memorandum of association of the company, stamped by the Delhi government as on October 27, 2007, the main objects to be pursued by the company on incorporation were as follows:
So this makes it very clear that building colonies was not among the main objects of Vadra’s Sky Light Hospitality, when it was incorporated. As the Memorandum of Association clearly shows the main object of the company was to be in hospitality business, as was suggested by its name.
Nevertheless that did not mean that the company could not build colonies. Just that it did not have any previous experience in doing so.
As far as the financials of the company go, as I have previously pointed out as on March 31, 2008, the paid-up capital of the company was Rs 1 lakh. The company did not earn any income upto March 31, 2008. It had an expenditure of Rs 43,380 which was met through borrowed money. Hence, the company really did not have any capacity to build a colony.
As Khemka puts it “The “capacity” of the applicant-Company was nothing else other than Mr. Robert Vadra. The man became the measure of everything and the entire statutory apparatus a castle of sand.”
Once Vadra’s Sky Light Hospitality got the letter of intent from the Haryana government for a commercial colony license on 2.701 acres out of total 3.53 acres of land, things got even more interesting. Vadra’s Sky Light Hospitality now had the land title as well as the letter of intent for grant of colony license in its possession. This made it possible for it, to enter into a collaboration agreement with with M/s DLF Retail Developers, on August 5, 2008.
After this Sky Light Hospitality received a huge amount of advance or interest free loan from DLF. The balance sheet of the company as on March 31, 2009, clearly points out entries of Rs 15 crore and Rs 10 crore as advances received from DLF.
And this money paid by DLF was finally used to clear the dues of Onkareshwar Properties. As Khemka points out “this funding from the DLF Group was used to clear the dues of Rs 7.95 crores, i.e., Rs7.5 crores towards cost of land plus Rs 45 lakhs towards stamp duty, to M/s Onkareshwar Properties, the vendor-company in registered deed No. 4928 dated 12.02.2008.”
This is how the transaction was completed. This could not have happened without the Haryana state government granting a commercial colony license within 18 days of application to Vadra’s Sky Light Hospitality, which had no previous experience of developing a colony. The license was renewed on 18th January, 2011 for a further period of two years up to December 14, 2012, Khemka points out.
Vadra’s Sky Light sold off the 3.53 acres of land to DLF for Rs 58 crore on August 18, 2012.
In doing this Bhupinder Singh Hooda turned out to be Robert Vadra’s Bansi Lal. The moral of the story is that behind every successful crony capitalist there is a successful politician.
The article originally appeared on www.firstpost.com on August 13, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
Daniel Kahneman, a Nobel Prize winning psychologist (he won the Nobel Prize for economics) , in his book Thinking, Fast and Slow, writes about a very interesting experience in designing a course he wanted introduce in high schools in Israel. Kahneman is currently the Eugene Higgins Professor of Psychology Emeritus at the Princeton University in the United States. But he started his career in Israel.
As he writes “I convinced some officials at the Israeli Ministry of Education of the need for a curriculum to teach judgement and decision making in school. The team that I assembled to design the curriculum and write a textbook for it included several experienced teachers, some of my psychology students, and Seymour Fox, then dean of the Hebrew University’s School of Education, who was expert in curriculum development.”
The team used to meet every Friday afternoon. In a year’s time they managed to construct a detailed outline of the syllabus, write a few chapters and even run a few sample lessons in the classroom. At this point of time Kahneman thought of running a small exercise and asked the team he was working with, to write down the time they thought it would take to present a complete textbook to the Ministry of Education, which could then go ahead and introduce the course.
As a part of the exercise Kahneman asked Fox, who was an expert at curriculum development, what had his previous experience been like. How much time did the teams in previous cases take to complete, what they had set out to do, Kahneman specifically asked Fox. ““I cannot think of any group that finished in less than seven years…nor any that took more than ten,””replied Fox.
Now contrast this with what is happening at Delhi University, where Vice Chancellor Dinesh Singh, is trying to introduce a four year course to replace the current three year one. As things stand as of now, the four year course is expected to be introduced in a few months time, when the next academic session of the university starts.
The work towards introducing a four year course started only in September last year and in December a proposal to that effect was passed. As an article in the Outlook magazine points out “At a hastily called emergency academic council meeting, held on a restricted holiday (December 24), the proposal for the overhaul was passed. The agenda papers of the meeting were made available to council members only two days before the meeting.”
The new academic session of the university starts in July, later this year. In six months time, between July and December, the Delhi University is trying to change the fundamental way it teaches, when it took at least seven years to introduce just a new course in the high schools of Israel.
Now that does not mean that India should also take seven to ten years to overhaul its education system, just because Israel used to do that. But the larger point is that changing the fundamental way of teaching in a central university cannot be done overnight, which is what Delhi University seems to be trying to do.
The first question that needs to be answered is that why is the change being made? Satish Despande, who teaches at the Delhi School of Economics told Outlook, “Not a single public document has been distributed for the rationale behind introducing the four-year course. So, all we are saying is, tell us why.”
The purported reason that seems to be coming out is that it will help those students who want to go to the United States for further studies. As Swapan Dasgupta wrote in a column in The Times of India yesterday “Shashi Tharoor proclaimed his support for the four-year degree course Delhi University is set to introduce from July. Tharoor’s logic was simple: the American 12 + 4 pattern has become the norm. “Indian students with 10+2+3 were made to do an extra year in the US. It was frustrating for many.””
Tharoor passed out of St Stephens College in Delhi, and then went to do his PhD from the Tufts University in the United States. Given this, Tharoor’s concern for those students of Delhi university who go to the United States for further studies is understandable.
But what about the ‘lesser mortals’ who decide to stay back and carry on their education or work to make a living, in India? As Ramachandra Guha writes in a column in the Hindustan Times “The logic of converting an established three-year degree programme into one of four years has not been carefully examined. When all other public universities in India have a three-year programme, how can one university alone stand out? The argument that the change will help students get admission into American universities is extremely elitist, since that possibility is open to (at most) 1% of DU students.”
Even if one does not get into the specific reasons for this change, there are other practical issues that need to be addressed.
The new four year structure allows students to drop out at the end of two or three years. Where will these students stand? Will a student who completes three years at Delhi university be eligible for its Post Graduate courses?
As mentioned earlier, Delhi university is a central university, which attracts students from all across the Eastern and Northern India. So will students who complete three year courses from other universities all across India, be eligible for Post Graduate courses on offer at the Delhi university?
If yes, then shouldn’t that be the case with students who complete three years at Delhi university? And if that is the case then why have a four year course at all? These are practical questions which need to be answered for the benefit of students who plan to apply in the various colleges affiliated to Delhi university later this year.
Then there is the problem of how will others treat Delhi university students who drop out at the end of two or three years? Will these students be eligible for MBA/UPSC/PO/any other exam that requires a three year bachelors degree?
That’s the practical part of it. Now lets come to the learning part. A senior administrator of the Delhi university told The Telegraph “Students are not gaining adequate skills and fundamental knowledge on matters relevant to life. The four-year course aims to teach those subjects that are relevant for students for their career, personal conduct and good citizenry.” The question of course is why can’t that be done in three years instead of four? And if its not being done in three years time what is the guarantee that it will be done in four years time?
The way the university plans to go about doing is this is putting students through 11 basic courses in the first two years. As Jayati Ghosh writes in The Hindu “Regardless of their previous training or choice of subject, allstudents will be forced to take 11 foundation courses, which will occupy most of their time in the first two years. These include two courses on “Language, Literature and Creativity” (one in English and the other in Hindi or another Modern Indian Language), “Information Technology,” “Business, Entrepreneurship and Management,” “Governance and Citizenship,” “Psychology, Communication and Life Skills,” “Geographic and Socio-economic Diversity,” “Science and Life,” “History, Culture and Civilisation,” “Building Mathematical Ability” and “Environment and Public Health.”
While broadening the horizon of students is always a good idea, doing it in an unplanned way can have unpleasant consequences. There are multiple questions that crop up here. Who will teach these courses? Are the current lot of Delhi university equipped enough to teach these courses? The Delhi university currently has 4000 vacancies for teachers. So is it in a position to take on this extra burden? What about the text books for these courses?
Also what will be the level of these courses going to be? As Ghosh puts it “These courses will have to be pitched at a level that can be understood by anyone with a basic school qualification. So the course on, say, “Building Mathematical Ability,” must be comprehensible to a student who has not done Mathematics at the Plus Two level, which would make it too basic to retain the interest of students who have already done it in school.”
The multi-disciplinary course goes against the entire idea of the Indian education system where students are expected to pick up their broad specialisation at the 10+2 level.
There are too many questions which need to be answered before a four year course can be introduced. Introducing the course without answering these questions would amount to experimenting with lives of students. Something that should not be done.
Let me conclude this with a personal experience. My three year bachelors degree in mathematics from Ranchi University took me four years to complete. The university during those days was running a year late. Final year exams which should have happened in May-June 1998, finally happened in May-July 1999. In fact, we were told that we were lucky because in the late eighties and the early nineties it took even five and a half years to complete a three year bachelors degree from Ranchi University.
In the end it were students like me who lost precious time because the university system kept screwing up. If the Delhi university goes ahead with its four year programme in its current shape, it is the students who will have to pay for it.
PS: And who has come with the names for the new Delhi university degrees? The university will award an Associate Baccalaureate (after 2 years), a Baccalaureate (after 3 years), and a Baccalaureate with Honours (after 4 years). Can we at least have names for degrees which we can pronounce, the fascination of Delhi university and Dinesh Singh for French notwithstanding.
The article originally appeared on www.firstpost.com on May 6,2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)