“Sixkku appuram seven da, Sivajikku appuram yevenda,” says Superstar Rajinikanth in the tremendously entertaining Sivaji – The Boss. The line basically means that “after six there is seven, after Sivaji there is no one.”
Like there is no one after Sivaji (or should we say the one and only Rajinikanth) similarly there is no one in the Congress party beyond the Gandhi family. And the party can go to any extent to keep the family going and at the centre of it all.
Take the recent decision of the Congress led United Progressive Alliance (UPA) government to implement the direct cash transfers scheme in a hurry. On the face of it one cannot really question the good logic behind the scheme. The idea is to make cash transfers directly into the accounts of the citizens of this country instead of offering them subsidies, as has been the case until now. This transfer will happen through Aadhar unique ID card enabled banks accounts.
As The Hindu reports quoting the finance minister P Chidambaram “Initially, 29 welfare programmes — largely related to scholarships and pensions for the old, disabled — operated by different ministries will be transferred through Aadhaar-enabled bank accounts in 51 districts spread over 16 States from January 1, and by the end of the next year it should cover the entire country, Mr. Chidambaram said. He added that only at a later stage would the government consider the feasibility of cash instead of food (under the Public Distribution System) and fertilizers, since it was more complicated.”
So far so good.
But the question is why is the government in such a hurry to implement the scheme? The scheme is to be implemented in 51 districts January 1, 2013 and eighteen states by April 1, 2013, the start of the next financial year. The government hopes to implement the scheme in the entire country by the end of 2013 or early 2014.
A scheme of such high ambition first needs to be properly tested and only then fully implemented. As has been explained in this earlier piece on this website there have been issues with the government’s other cash transfer programme, the National Rural Employment Guarantee Scheme (NREGS).
There have also been issues with pilot projects that have been carried on the cash transfers scheme till now. In one particular case people who got the subsidy had to spend a greater amount of money than the subsidy they received, in getting to the bank and collecting their subsidy.
The other big issue that might come up here is the opening of bank accounts. While the Aadhar Card does identify every person uniquely, India remains a terribly under-banked country. And that is something that needs to be set right in a very short period of time, if the direct cash transfers system needs to get anywhere.
The big selling point of the direct cash transfers scheme is that leakages which happen from the current system of subsidies will be eliminated. For example, currently a lot of kerosene sold through the subsidised route does not reach the end user and is sold in the open market where it is also used to adulterate petrol and diesel, among other things. Some of this kerosene also gets smuggled into the neighbouring countries where kerosene is not as cheap as it is in India and hence there is money to be made by buying kerosene cheaply in India and selling it at a higher price there.
Now people will buy kerosene at its market price and the subsidy will come directly into their bank accounts. So the subsidy will reach the people it is supposed to reach and will not enrich those people who run the current system.
While this sounds very good on paper, the reality might turn out to be completely different as an earlier piece on this website explains and the so called leakages might continue to take place.
Hence, its very important to run pilot tests in various parts of the country, solicit feedback, implement the necessary changes and then gradually go for a full fledged launch. A system of such gigantic proportion cannot be built overnight as the government is trying to.
So that brings us back to the question why is the government in such a hurry to implement direct cash transfers scheme? And in a way screw up what is inherently a good idea.
The answer probably lies in what Jairam Ramesh, the Union Rural Development Minister told The Hindu ““The Congress is a political party, not an NGO. We had promised cash transfer of benefits and subsidies in our election manifesto of 2009,” Mr. Ramesh said, asking “Where is the talk of elections?””
But as the great line from the great political satire Yes Minister produced by the BBC goes “The first rule of politics: never believe anything until it’s been officially denied.” So this hurry to get the scheme going is nothing but the Congress party getting ready for the 2014 Lok Sabha polls.
As an article in the India Today magazine points out “The government’s calculation is that just as the National Rural Guarantee Act and the farmer loan waiver had sealed its victory the 2009 Lok Sabha elections, the direct cash transfer of subsidies would do the same in the 2014.”
Or as Ramesh put it more aptly by getting into the poll mode “aapka paisa, aapke haath“. And this is being done to ensure that the Congress party does well in the next Lok Sabha elections and Rahul Gandhi becomes the prime minister of India.
There are several interesting points that arise here. The first point is that the launch of the cash transfers system will give the Congress politicians battling a string of corruption charges something new to talk about. And that is important.
Indira Gandhi established by winning the 1971 Lok Sabha with her Garibi Hatao slogan that it is important to talk about the right things in the run up to the elections irrespective of the fact whether anything concrete about it is done or not, in the days to come.
There is no one more cunning as a political strategist this country has had than Mrs Gandhi. And every Congressman worth his salt knows that. It is more important to make the right noises than come up with results.
The second point that comes out here is that the government is making all the right noises about this scheme being fiscally neutral. This means that the expenditure on
subsidies won’t go up. Only the current subsidies on offer will now be distributed through this route. This is something that I am unwilling to buy.
I wouldn’t be surprised if the right to food act is set in place in the days to come before the 2014 Lok Sabha elections. The excuse will be that now that we have a direct cash transfer set up in place we are well placed to launch the right to food act as there will be no leakages.
While the idea behind subsidies is a noble one, the government of India is not in a position to foot the mounting bills. The fiscal deficit for the year 2012-2013 has been targeted at Rs 5,13,590 crore or 5.1% of the gross domestic product. Fiscal deficit is the difference between what the government earns and what it spends.
As the Kelkar committee on fiscal consolidation recently pointed out “A careful analysis of the trends in the current year, 2012-13, suggests a likely fiscal deficit of around 6.1 percent which is far higher than the budget estimate of 5.1 percent of GDP, if immediate mid-year corrective actions are not taken.” The committee estimated if the government continued to function as it currently is it will end up with a fiscal deficit of Rs 6,15,717 crore. And I believe that the Kelkar committee’s estimates are fairly conservative. So we might very end up with a higher fiscal deficit if the direct cash transfers system is used to launch more subsidy programmes as I guess would be the case.
And that brings me to my third point. As the India Today magazine points out “The cash transfer of subsidies estimated to be worth Rs 3,20,000 crore will not be an easy task. Procedurally, one of the major obstacles would be the fact that many of the beneficiaries might not even have bank accounts. But more significantly, the scheme does nothing to address the main problem – bring down the subsidies to ease the pressure on the exchequer.”
High subsidies basically imply greater borrowing by the government. This in turn means lesser amount of money being available for others to borrow and hence higher interest rates. Higher subsidy also means more money in the hands of Indian citizens. This more money will chase the same number of goods and services and hence lead to higher inflation. Also be prepared for a higher food inflation in the years to come.
Higher interest rates will mean that the lower economic growth will continue in the time to come despite of what the politicians and the bureaucrats would like us to believe. Consumers will take on lesser debt to buy homes, cars and consumer goods. This will be bad for business, and in turn they will go slow on their expansion plans and thus impact economic growth further.
As Ruchir Sharma writes in his bestselling book Breakout Nations. “It was easy enough for India to increase spending in the midst of a global boom, but the spending has continued to rise in the post-crisis period…If the government continues down this path India, may meet the same fate as Brazil in the late 1970s, when excessive government spending set off hyperinflation and crowded out private investment, ending the country’s economic boom.”
And that’s the cost this country will have to take on a for one party’s love for a family. To conclude, let me quote something that Ramchandra Guha writes in the essay Verdicts on Nehru which is a part of his latest book Patriots and Partisans “Mrs (Indira) Gandhi converted the Indian National Congress into a family business. She first brought in her son Sanjay, and after his death, his brother Rajiv. In each case, it was made clear that the son would succeed Mrs Gandhi as head of Congress and head of government.”
The sudden hurry to implement the direct cash transfers system probably tells us that this generation’s Mrs Gandhi has also made it clear to Congressmen that her son is ready to take over the reins of this country.
Hence, the Congress government is now working towards making that possible. In the process India might get into huge trouble. But we will still have Rahul Gandhi as the Prime Minister.
And that is more important for Congressmen right now than anything else.
The article was originally published on www.firstpost.com on November 29,2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
Sonia Gandhi
How Cong ‘chamchagiri’ made Sonia India’s No 1 politician
Vivek Kaul
The closest English word for the desi word chamchagiri is sycophancy. But sycophancy doesn’t have the same depth as chamchagiri does. Sycophancy doesn’t make my tongue twirl in the same way as chamchagiri.
So let me take this opportunity to explain chamchagiri in some more detail through a song from the late Jaspal Bhatti’s superhit television serial Flop Show. For those who don’t know or don’t remember, each episode of the serial highlighted corruption from a different facet of life.
One particular episode dealt with the travails of a PhD candidate and his attempts to get a PhD. The PhD candidate (played brilliantly by Vivek Shaque who died a few years back in a plastic surgery gone wrong) carriers out various household chores including buying vegetables for his guide (played by Bhatti) in the hope of getting his PhD.
Towards the end of every episode Flop Show had a parody of a hit Hindi film song. This particular episode had a spoof of the song jo tumko ho pasand wohi baat kahenge, tum din ko agar raat kaho raat kahenge.
The lines of the parody were different and went like this:
Jo tumko ho pasand wohi baat kahenge,
beaker ko agar jar kaho to jar kahenge.
(You can listen to the complete parody here)
This is the level of commitment required of a chamcha, something that the word sycophant simply does not convey.
Now before you start to wonder, dear reader, as to why have I gone into so much detail in trying to define or rather differentiate between chamchas and sycophants, allow me to explain.
It shouldn’t come as a surprise to you if I tell you that most Indian political parties are full of leaders who are essentially chamchas who have risen to the top or full of leaders who have become chamchas after being brought in at the top.
Some of the cadre based parties like the Left Parties and Bhartiya Janta Party (to some extent) are exceptions to this.
But India’s number one party when it comes to chamchas is the Congress. Most recently the chamchagiri was in full show when top leaders of the party like P Chidambaram, Veerapa Moily, Jayanthy Natarajan, Kapil Sibal, Manish Tewari and Rashid Alvi (all lawyers to boot) spoke out to vociferously defend the shenanigans of Robert Vadra, son-in-law of Sonia Gandhi, their supreme leader.
But Congress was not always a party of chamchas and chamchagiri. At least not till 1969. Historian and writer Ramachandra Guha explains this in an essay titled A Short History of Congress Chamchagiri which is a part of his recently released book Patriots and Partisans.
“Most Indians are too young to know this, but the truth is that until about 1969 the Congress was more or less a democratic party,” writes Guha.
Sometime before Jawahar Lal Nehru died, Indira Gandhi had been planning to settle in Great Britain. After Nehru died in May 1964, she was invited to join the cabinet as the minister of information and broadcasting by Lal Bahadur Shastri who took over as the next prime minister.
“When Shastri died in January 1966, Mrs Gandhi was, to her own surprise, catapulted into the post of the prime minister. There were other and better candidates for the job, but the Congress bosses (notably K Kamraj) thought that they could more easily control a lady they thought to be a gungi gudiya (dumb doll),” writes Guha.
But instead of being a gungi gudia she turned out to be a control freak who split the party in 1969 and what was a essentially a decentralised and democratic party till that point of time became an extension of the whims, fancies and insecurities of a single individual.
Thus started an era of chamchas and chamchagiri in the Congress. Dev Kant Baruah who was the President of the Congress Party between 1975 and 1977 went to the extent of saying “Indira is India and India is Indira“. What was loyalty to the party earlier became loyalty to the individual and the family.
Also Indira Gandhi had total control over the system effectively overriding democracy and imposing emergency on June 26, 1975.
A famous cartoon made by Abu showed President Fakhruddin Ali Ahmed in his bath during the emergency signing ordinances and saying “if there are any more ordinances just ask them to wait.” Other than this, Indira Gandhi also took to firing both chief ministers and governments at will.
While she was building her own career, Mrs Gandhi’s two sons Sanjay and Rajiv were trying out their own careers as well. As Guha writes “The elder boy, Rajiv, after having followed his mother in having failed to complete a degree, took a pilot’s license and joined Indian Airlines. The younger boy, Sanjay, prudently chose not to go to university at all. He apprenticed at Rolls Royce(in Great Britain), where his lack of discipline provoked a flood of anguished correspondence between his mother and the Indian high commission.”
Sanjay Gandhi came back to India with the idea of manufacturing what he called the people’s car. “Despite the gift of cheap land (from a sycophantic chief minister of Haryana) and soft loans from public sector banks, the project failed to deliver on its promises. Another of Sanjay’s chamchas Khushwant Singh, then the editor of the Illustrated Weekly of India, claimed that his factory would roll out 50,000 cars a year,” writes Guha. But nothing of that sort happened.
Sanjay Gandhi got out of cars and gradually got into politics effectively becoming number two to his mother Indira. Rajiv Gandhi on the other hand wasn’t interested in politics. “His greatest professional ambition was to graduate from flying Avros on the Delhi-Lucknow run to flying Boeings between Calcutta and Bombay. By June 1980 he had been flying for twelve years, but his record did not yet merit the promotion he so ardently desired,” Guha points out.
In June 1980 Sanjay Gandhi died in an plane crash and Rajiv had to enter politics to support his mother. And in politics he was luckier than he was as a pilot. As Guha writes “He was rather luckier in politics. Once he had answered Mummy’s call, and changed his career, the rewards were swift. Within five years of joining the Congress he had become prime minister of India.”
And the Congress party had effectively become a family run concern. As Guha writes in the essay Verdicts on Nehru “Mrs Gandhi converted the Indian National Congress into a family business. She first bought in her son Sanjay, and after his death, his brother Rajiv. In each case, it was made clear that the son would succeed Mrs Gandhi as head of Congress and head of government.”
Once Indira Gandhi had placed her family at the helm of the Congress it was time for other parties across the country to follow suit. “Indira Gandhi’s embrace of the dynastic principle for the Congress served as a ready model for other parties to emulate…The DMK was once the proud party of Dravidian nationalism and social reform; it is now the private property of M Karunanidhi and his children…Likewise, for all his professed commitment to Maharashtrian pride and Hindu nationalism Shiv Sena leader, Bal Thackeray could look no further than his son. The Samajwadi Party and Rashtriya Janta Dal claimed to stand for ‘social justice’, but the leadership of Mulayam’s party passed onto his son and in Lalu’s party to his wife,” writes Guha.
There are other examples as well. Sharad Pawar is grooming his daughter to take over the reins of his party. Dr Farooq Abdullah passed on the leadership of his family party the National Conference to his son Omar. And this is deeply inimical to the practise of democracy in India, feels Guha.
He gives the example of once travelling through Tamil Nadu a few years back. “I was met at every turn by ever-larger cut-outs of the chief minister’s son and heir apparent – cut-outs of MK Stalin smiling, Stalin writing, Staling speaking into a cell phone. The only other place where I have felt so stifled by a single face was in Syria of Bashar Assad.”
And all this has happened because Lal Bahadur Shashtri died rather suddenly and Indira Gandhi was catapulted into a position of immense power. So the question is what would have happened if the Shastri had lived for another five years?
“Had Shastri lived, Indira Gandhi may or may not have migrated to London. But even had she stayed in India, it is highly unlikely that she would have become prime minister. And it is certain that her son would have never have occupied or aspired to that office…Sanjay Gandhi and Rajiv Gandhi would almost certainly still be alive, and in private life. The former would be a (failed) entrepreneur, the latter a recently retired airline pilot with a passion for photography. Finally, had Shastri lived longer, Sonia Gandhi would still be a devoted and loving housewife, and Rahul Gandhi perhaps a middle-level manager in a private sector company,” writes Guha.
In short, the world that we live in would have been a very different and probably a better place. But as the great Mirza Ghalib, who had a couplet for almost every situation in life, once said “hui muddat ke ghalib mar gaya par yaad aata hai wo har ek baat par kehna ke yun hota to kya hota?”
The article originally appeared on www.firstpost.com on November 27,2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
Robert Vadra’s got vision; rest of the world wears bifocals
Vivek Kaul
If ever there ever was a paisa vasool western it was Butch Cassidy and the Sundance Kid which starred Paul Newman and Robert Redford. The film other than having great visuals, a fast paced story line, brilliant background music and excellent performances by its lead cast, also had what is my favourite one liner from an English movie.
In a rather non-descript scene as Butch and Sundance head into the sunset, Butch says “Boy, I got vision, and the rest of the world wears bifocals.”
Nowhere is the statement truer currently than in the case of Robert Vadra, who has earned hundreds of crore without putting much of his own money at risk. As a line from a song in the movie Gol Maal (the original one made by Hrishikesh Mukherjee and not the recent Rohit Shetty series) goes “ke paisa kamane ke liye bhi paisa chahiye”.
Vadra broke the age old wisdom inherent in the phrase. He had the vision of figuring out how to make profits of hundreds of crore by putting very little of his own money into the business. Of course this clarity of vision wouldn’t have been possible to execute if he was not married to Priyanka Gandhi (now Vadra) India’s perennial politician in waiting.
The story started with Sky Light Hospitality, a company in which Vadra owns 99.8% stake, zeroing on 3.5 acres of land in Shikohpur, ten kilometers from Gurgaon, in February 2008. This land was bought from Onkareshwar Properties, then majorly owned by Satyanand Yajee, a man known to be close to Haryana Chief Minister Bhupendra Singh Hooda.
Yajee sold the land to Vadra for Rs 7.5 crore. The balance sheet of Vadra’s Sky Light Hospitality as on March 31,2008, clearly reveals that the company had a capital base of only Rs 1 lakh. Also the company did not have any loans on its books. So how did a company with a capital of Rs 1 lakh buy a piece of land worth Rs 7.5 crore? Over and above this stamp duty also needed to be paid, where did that money come from?
Vadra’s Sky Light Hospitality issued a cheque without having the requisite money in its bank account. Yajee did not deposit the cheque and supposedly also paid up the stamp duty. Soon Vadra sold the piece of land to DLF which valued it at Rs 58 crore. DLF gave an advance of Rs 50 crore on this. The first Rs 5 crore of this advance was paid out in early June 2008.
This money was used by Vadra to pay off Yajee. He also used the money to go on a major property buying spree across Rajasthan and Haryana, two states ruled by the Congress party and made a killing on it.
But some recent revelations made by the Outlook magazine show that Vadra could not have sold the land to DLF in the first place. “Documents seen by Outlook reveal that, till recently, the land did not have the required permission to be sold, leased or used for any other purpose (than for which it was sold to the buyer). In short, Vadra’s company (Sky Light Hospitality) could not by law sell the land (as it claims to have done in 2008) to DLF,” the article points out.
The land that Vadra had bought in February 2008 was agricultural land and agriculture land can’t be used for commercial use. The change of land use (CLU) was approved by the Haryana government in late March 2008. As The Hindu had reported earlier “A little more than a month later, on March 28, 2008, the Town and Country Planning Department issued Mr. Vadra’s company a licence to develop 2.701 acres of the land into a housing colony.”
So Vadra got the permission to develop the land into a housing colony in March 2008. But did that permission allow him to sell the land along with the licence? The answer is no.
As Outlook points out “As per one set of official records of the state government for 2008, 2009 and 2010, the permission the Shikohpur plot had was a ‘CLU’, which makes farmland fit for commercial use. This ‘licence’, officials say, could not have been transferred. Nor could a plot with CLU have been sold, sub-let, sub-divided, broken into plots, or developed in any way other than the CLU was originally meant for. In Skylight’s case, the permission is understood to have been for developing residential properties, though it is not yet known whose name exactly it was taken in. Subsequently, Skylight may indeed have decided to tie up with a builder such as DLF to develop homes—but would the company be permitted an outright sale, along with the licence? That’s something officials say can’t be done.”
What this means is that if Vadra wanted to build homes on the piece of land and sell them, he could do that. He could have even tied up with a builder and built homes. But he couldn’t have sold the land along with the licence to DLF. And that is precisely what he did.
This is proved by the statement issued by DLF on October 6, 2012. “M/s Skylight Hospitality Pvt Ltd approached us in FY 2008-09 to sell a piece of land measuring approximately 3.5 acres just off NH 8 in Village Sikohpur, Dist Gurgaon. This was licensable to develop a Commercial Complex and the LOI from Govt of Haryana to develop it for a Commercial Complex had been received in March 2008 itself. DLF agreed to buy the said plot, given its licensing status and its attractiveness as a business proposition for a total consideration of Rs 58 crore.”
So what DLF was paying for was essentially the licence that Vadra had to develop the land for commercial use from the Haryana government. The company has clearly said this.
This admittance by DLF raises another interesting question. The company has practically built a new city Gurgaon, often referred to as the Millennium City, from scratch. Given that why were they so naïve as to not be aware what the law as it stands was? Or was it just an attempt on their part to be nice to the first son-in-law of this country?
Vadra used the Rs 50 crore advance that he got from DLF to build a mini land empire for himself between 2008 and 2011. But all this had only been possible because he had the ‘vision’ to marry Priyanka Gandhi. The rest of us in the meanwhile were caught wearing bifocals.
The article was originally published on www.firstpot.com on November 17,2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
Cong trying to do a Romney in Gujarat by attacking Modi
Vivek Kaul
The Congress campaign in Gujarat is getting desperate. Sample this.
“When it comes to GDP growth, Gujarat is lagging behind states like Bihar, Odhisa and Chhattishgarh,” the Union Commerce and Industry Minister Anand Sharma said while addressing a public meeting in Gandhinagar. “Narendra Modi says Gujarat is most progressive, but if you have been to other states, Bihar, Odisha and Chattisgarh are much ahead,” he added.
When Indian politicians start using terms like Gross Domestic Product growth with voters you know that they don’t have much else to talk about.
Data from the planning commission shows that the state gross domestic product (GDP) at current prices (which does not adjust for inflation) of Bihar, Odisha and Chattisgarh grew at the rates of 20.4%, 16% and 15.3% in 2011-2012.
In comparison Gujarat grew at 15.8%. So the economic growth (which is what the state GDP measures) of Bihar and Odisha was faster than that of Gujarat. But Gujarat grew faster than Chattisgarh.
But as the old saying goes we should be comparing Apples with Apples and not Apples with Oranges. And to add to that as one of my teachers used to say “percentages should be used carefully lest we draw the wrong conclusions”.
Let me deviate a little and give an example to explain what I am basically trying to say. Let us say you earn Rs 10,000 a month and your income jumps to Rs 20,000 a month, a gain of 100%. On the other hand let’s say you earn Rs 1 lakh a month and your income jumps to Rs 1.3 lakh a month, or a gain of 30%.
So even though the percentage gain in the first case is more, the absolute gain is more in the second case. Hence, when we are talking percentages it is important to keep the base number in mind. So Bihar did grow faster than Gujarat but it was because of what economists like to call the “base effect”.
Gujarat’s state GDP in 2010-2011 was Rs 5,13,173 crore. It went up by 15.8% to Rs 5,94,369 crore in 2011-2012. In comparison Bihar’s GDP for 2010-2011 was Rs 2,17,814 crore. And it grew by 20.4% to Rs 2,62,230 crore in 2011-2012.
The point being Bihar is growing on a lower base and that’s why the percentage growth is higher. The same argument holds for Odisha as well.
The other point that comes here is the population of the state. Bihar’s state GDP went up by Rs 44,416 crore to Rs 2,62,230 crore. This gain of Rs 44,416 crore was spread across a population of 10.38 crore people. This implies a gain of Rs 4,279 per individual who lived in Bihar.
Now let’s do the same calculation for the state of Gujarat. The GDP of the state went up by Rs 81,196 crore to Rs 5,94,369 crore. This gain of Rs 81,196 crore was spread across a population of Gujarat is 6.04 crore as per the 2011 census. Hence, this implies a gain Rs 13,447 per individual who lives in Gujarat.
This basically means that the growth in Gujarat at an individual level was three times that of Bihar in 2011-2012. Hence, Sharma’s argument that Bihar grew faster than Gujarat doesn’t really work.
And Sharma is not the only one attacking Modi. Ajay Maken, the youngest minister in the Union Cabinet alleged at a rally that the ruling BJP government was neck-deep in corruption in the name of development. Well that’s like the pot calling the kettle black. As has been proven time and over the last few years, India hasn’t seen a more corrupt government than the current UPA government ruling the country.
Mani Shankar Aiyer, a former minister in the UPA government, called Modi Ravana and asatya ka saudagar. He also called him a paani purush. Congress Rajya Sabha MP Hussain Dalwai, said “Modi is just a mouse before Sardar Vallabhbhai Patel”.
Bharat Solanki, Union Minister for Drinking Water and Sanitation, decided to beat all the abuses being hurled at Modi and termed him as “Nathuram Godse” and alleged that “under the BJP rule in Gandhi’s Gujarat not truth but lies carry more currency”.
Elections campaigns can get nasty. But the Congress doesn’t seem to have learned from its 2007 blunder when Sonia Gandhi called Modi a “maut ka saudagar”. While it might have sounded like a brilliant turn of phrase to the Congress speechwriter who wrote Sonia’s speech, it clearly backfired on the party.
The issue here is what does the Congress attack Narendra Modi with? Economic development as I showed above is healthy in Gujarat. It is one of the few states in the country which has a power surplus. The roads are ‘just’ fine and the cities are largely clean. Modi doesn’t really have any big corruption charges against him unlike the Congress government as well as the party.
So what do you do in a situation like this? You get personal and attack on Modi’s big blip, the 2002 riots in the state, and hope that it creates enough fear in the minds of the voter and he decides to vote for the Congress.
But does the issue really matter to the major portion of the voters in Gujarat? The answer is no. As Aakar Patel, a known Modi baiter, recently wrote in the Open magazine “Gujaratis like to think they are great nationalists. It doesn’t occur to them that India suffers every time they triumphantly keep memories of the massacre alive, by backing the man first unwilling or unable to stop it, now too incompetent to prosecute its participants. They are voting Caesar(i.e. Modi) back to power.”
Hence, Congress’ negative campaign isn’t really going to work. In fact, it might work in favour of Modi, who will continue to espouse the cause of Gujarati Asmita and portray himself as a lone gladiator taking on the Congress baddies.
Also negative campaigns do not really work. Take the case of the recent Presidential elections in the United States. Romney’s attacks on Obama got too personal towards the end of the campaign. Donald Trump, a Romney supporter, wanted to see the college records of Obama. The insinuation here was that Obama may got into college in America as a foreign exchange student from Indonesia. Trump also wanted access to Obama’s passport. The insinuation here was that would allow him (i.e Trump) to prove something Muslim about Obama.
As marketing guru Al Ries told me in a recent interview on Firstpost “Mitt Romney spent most of his time attacking Barack Obama. That’s the wrong strategy. What a politician needs to do is to offer a positive concept first and then point out that his or her opponent lacks this concept.”
Some of the biggest state elections in India have seen winning parties run extremely positive campaigns. Akhilesh Yadav ran the umeed ki cycle campaign in Uttar Pradesh and Mamata Banerjee ran the poriborton campaign in West Bengal. While they are busy making a mess of the states after coming to power, but then that is a different issue all together.
In comparison. the Congress party doesn’t really have any strategy in place when it comes to taking on Narendra Modi. And what it is doing clearly won’t work.
The article originally appeared on www.firstpost.com on November 12, 2012.
(Vivek Kaul is a writer. He can be reached at [email protected])
Robert Vadra's Midas touch is based on inside info
Vivek Kaul
Robert Vadra is a lucky man. A very lucky man indeed.
People sell land to him and do not demand money in exchange immediately. This is not money running into a few thousands or a few lakhs, but it’s more than a few crore.
In today’s edition of Business Standard N Sundaresha Subramanian explains how it all started for Vadra. How the son-in-law of the first family of Indian politics got into buying and selling land.
Onkareshwar Properties sold 3.5 acres of land in Shikhopur near Manesar to Vadra’s Sky Light Hospitality sometime in February 2008(as an earlier report in The Hindu suggested). Sky Light Hospitality as on March 31, 2008 had an issued capital of Rs 1 lakh. This was the money Vadra and his mother Maureen (who owned 0.2% of the company) had put into the company for business. The company had not taken any loans.
So the question is how did a company with Rs 1 lakh capital buy 3.5 acres of land? The sale deed for this land showed that it was bought by Sky Light Hospitality for Rs 7.5 crore. So how did a company which had Rs 1 lakh capital buy a piece of land which cost Rs 7.5 crore without taking on any loan?
Sky Light Hospitality’s balance sheet as on March 31, 2008 shows a book overdraft of Rs 7.94 crore in Corporation Bank Friends Colony, New Delhi. This basically means that a cheque was issued without enough funds being available in Sky Light Hospitality’s accounts. The cost of the land was Rs 7.5 crore. With a 6% stamp duty, the total would have worked out to Rs 7.95 crore (Rs 7.5 crore + 6% of Rs 7.5crore). And that is more or less the entry that sits on Vadra’s Sky Light Hospitality.
The question is how can a company issue a cheque without there being enough money in its accounts? This can only happen if the individual/company in whose name the cheque is being issued agrees not to deposit the cheque immediately.
And that’s what precisely seems to have happened in this case. As the Business Standard points out “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 7.94 crore book overdraft entered in Sky Light’s books.” So what this means is that Onkarshwar sold the land, accepted the cheque, did not deposit it immediately and also paid for the stamp duty in the meanwhile.
Vadra took this land and sold it to DLF sometime in June 2008. DLF valued this land for Rs 58 crore and gave Vadra an advance of Rs 50 crore against it. Vadra basically used this Rs 50 crore to go on a property buying spree in Haryana and Rajasthan. What this also meant was that Vadra bought land for Rs 7.5 crore and sold it for Rs 58 crore. And in the process made a profit of Rs 50.5 crore. All along he had invested only Rs 1 lakh of his own money in the deal.
Vadra got the advance of Rs 50 crore in three installments an earlier story in The Financial Express pointed out. The first of these instalments was paid on June 3, 2008, The Hindu had pointed out. It was this money that Vadra would have used to pay off Onkareshwar Properties. So what this means that Onkareshwar sold the property to Vadra in February 2008 and waited till June 2008 to be paid. That was a very considerate transaction in this day and age where every real estate company wants the money in advance.
A clear link has also started to emerge that the Haryana Chief Minister Bhupinder Singh Hooda may also have had a role to play in facilitating the deal between Onkareshwar and Vadra’s Sky Light Properties.
Satyanand Yajee owns 98% of Onkareshwar Properties. He is the general secretary of the All India Freedom Fighters Organisation (AIFFO), the Business Standard points out. “Satyanand Yajee, who turned Onkareshwar Properties, a company with capital of Rs 1 lakh, into a Rs 136-crore capital base behemoth, isn’t an obscure figure. He is an office bearer of the Delhi-based All India Freedom Fighters Organisation (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 paper writes.
And the link doesn’t end there. “Both Hooda and Yajee are sons of freedom fighters. While Satyanand’s father, the late Sheel Bhadra Yajee, hailed from Bihar and was said to be close to Subhash Chandra Bose, Ranbir Singh hailed from Rohtak and was irrigation minister of Punjab when the iconic Bhakra Nangal project was implemented. On a website in honour of Sheel Bhadra Yajee, the chief minister, with his father and son, Deepender Hooda, is quoted showering praises. Recently, AIFFO had spent lakhs of rupees in full-page advertisements praising Ranbir Singh’s contributions to the freedom struggle. ,” the Business Standard points out.
Given this it is not surprising that the Haryana government was in a hurry to give Vadra a clean chit on his property dealings in the state. Vadra’s real estate empire started with more than a little help from Hooda.
A part of the money that Vadra’s Sky Light Hospitality got from DLF was also used to buy plots of lands in Bikaner, as a DNA story reported a few days back. “In a flurry of deals between June 2009 and August 2011, Robert Vadra purchased at least 20 plots of land collectively measuring more than 770 hectares in Rajasthan’s Bikaner district, in a region that would see prices spiraling soon after. A clutch of investors, including Vadra, apparently privy to information on upcoming industrial projects (the Vavasi silicon chip project and the solar parks policy) in the vicinity, reaped huge profits with land values appreciating by up to 40 times since 2009,” the story pointed out.
In fact Vadra was willing to pay Rs 65,000 per hectare of land when the going rate was not more than Rs 30,000 a hectare. As the DNA wrote “Bikaner businessman and land investor Vineet Asopa, who sold among the largest plots to Vadra, was so surprised at the ease with which he demanded and received Rs65,000 a hectare when local prices were no more than Rs30,000 a hectare that he summoned contractors for an overnight survey of whether the land was rich in minerals.They dug 80 feet deep, found only rocky surface, and Asopa went ahead with the deal. He found out only two months later that the purchaser was Vadra, whose signature was on the cheques.”
This would not have happened unless Vadra was privy to information about the industrial projects coming up on the aird land he had been buying up. And this needed more than a little help from the government.
Ashutosh Varshney in a column in The Indian Express equates Vadra’s strategy of buying up land before anyone else does, to an honest graft. He quotes George W Plunkitt, a US state senator in the state of New York, in the late 1800s. “In a famous passage, George W. Plunkitt…said the following: “Everybody is talking these days about Tammany men growing rich on graft, but nobody thinks of drawing the distinction between honest graft and dishonest graft… Yes, many of our men have grown rich in politics. I have myself, but I’ve not gone in for dishonest graft — blackmailing gamblers, saloonkeepers, disorderly people, etc… There’s an honest graft… Let me explain by examples. My party’s in power in the city, and it’s going to undertake a lot of public improvements. Well, I’m tipped off, say, that they’re going to lay out a new park at a certain place. I see my opportunity and I take it. I go to that place and I buy up all the land I can in the neighbourhood. Then the board of this or that makes its plan public, and there is a rush to get my land, which nobody cared particularly for before… Or supposing it’s a new bridge they’re going to build. I get tipped off and I buy as much property as I can that has to be taken for approaches. I sell at my own price later on and drop some more money in the bank… Wouldn’t you?” (William L. Riordan, Plunkitt of Tammany Hall).”
That’s what Vadra is doing as well. His mother in law’s party is in power. He is tipped off about a new project coming up in states the Congress party rules. He just happens to be buy land before anyone else does being privy to information. And once the information is made public the price of the land goes up many times over in the months and years to come, and he sells out. Wouldn’t you, dear reader, be doing the same thing, assuming you were privy to information like Vadra is?
The article originally appeared on www.firstpost.com on October 27,2012. http://www.firstpost.com/economy/robert-vadras-midas-touch-is-based-on-inside-info-504707.html
(Vivek Kaul is a writer. He can be reached at [email protected])