How They Brought India Down

Former Gandhi family loyalist Jayanthi Natarajan’s accusations that she had to yield to “specific requests” from Rahul Gandhi’s office while she was India’s Environment Minister puts the spotlight back, yet again, on the totems and taboos typical of the previous dispensation under the UPA, the peculiar ways of its movers and shakers, and the excesses of their lackeys who held sway on account of false deference to the Congress High Command and yet caused inordinate delays to projects that could have revved up the economy. Following the alliance’s humiliating defeat in the 2014 polls, Congress ministers like Natarajan had crawled back into the woodwork fearing that their reported indiscretions while in power would haunt them. Their anxieties were not misplaced. After all, the Narendra Modi- led Government has inherited a list of stalled projects worth $50-70 billion, held up mostly over environmental permissions and forest clearances. Columbia University Professor Arvind Panagariya, currently vice-chairman of the NITI Aayog, the organisation that has replaced the Planning Commission, has for long argued that rampant cronyism and policy paralysis had hurt the momentum of infrastructure progress. Gains had been made under the earlier NDA regime, he observed, but it had slowed down under the UPA.

The Modi Government doesn’t seem keen on a witch- hunt as yet, but is in possession of proof of lies told and rents sought for clearances. “Instead, the Prime Minister wants the law to take its own course,” says Petroleum Minister Dharmendra Pradhan, referring to probes into financial irregularities of the previous regime. Even before it was elected to power, the NDA had received numerous complaints of the UPA favouring some corporate houses over others. One of the ministers reportedly demanded a bribe even from a public-sector company for clearances needed for a project, says a company official. When the minister in question was reminded by a company representative that PSUs do not offer monetary compensation to ministers, he was asked to route the money through a private company that was a joint venture partner with the PSU, which has its headquarters in Gujarat.

While the PSU official neither wants to disclose his name nor that of the company, Congress ally and NCP leader Praful Patel has no qualms admitting that there were hiccups within the UPA Government over granting the required clearances for a 3,300 MW power project by the Adani Group in the Maharashtra Industrial Development Corporation sector of Tiroda, Gondia, Patel’s constituency. Rules were tweaked to derail the project by Adani, he says. Patel wouldn’t elaborate, but is upbeat that the project is now up and running despite opposition from some of his ministerial colleagues in the UPA. Jairam Ramesh, who was India’s Environment Minister from mid-2009 till July 2011, had come under attack for his opposition to granting the project approval.

Ramesh had on several occasions blamed retroactive taxation—the Manmohan Singh Government’s decision to change an Indian law in 2012 to tax the overseas transactions of companies with operations in India even if the deal was done earlier—for dousing investor sentiment, but he himself has incurred the wrath of investors for pandering to frivolous demands from NGOs of all hues to stall various projects and then come up with numerous conditions to restart them. The tag of his being ‘anti-development’ seems to have stuck, confides a Congress leader, adding that it hasn’t helped that the former minister has repeatedly denied any wrongdoing and has vowed he wasn’t anti- growth and anti-development. When Ramesh, an alumnus of the Indian Institute of Technology, Carnegie Mellon University and Massachusetts Institute of Technology, took over the reins of the Environment Ministry in 2009, the country was growing at a fast clip and was being feted as a future economic powerhouse. Which was why he attracted a lot of criticism when he raised objections to projects with vast potential for job creation. The projects that were affected under his term include a $12 billion steel project by South Korean company Posco and Vedanta Resources’ bauxite mining project in Odisha, among others. Ramesh had vowed to strike a balance between ecology and the economy, but senior officials suggest that he “perhaps didn’t live up to his promises”. In a debate, he had said, “India needs to be liberated both from the ‘high GDP growth hedgehogs’ and the ‘conservation-at-all-cost hedgehogs’.”

Various sources that Open spoke to admit that there was plenty of criticism coming from various sections of industry, complaining that he was blocking approvals. Jairam Ramesh did not respond to emailed queries from Open.

A CASE OF PALACE INTRIGUE

At least three Congress leaders who Open spoke to say that Ramesh was perceived to be very close to Rahul Gandhi, who had begun to take a lot more interest in policy matters after the UPA was re-elected in 2009. “Which is why he never thought it was important to consult the Prime Minister or other ministerial colleagues over crucial policy decisions,” says one of them. “He cashed in on that perceived proximity with the ‘prince’ to come up with autonomous decisions and throw the collective responsibility of the Cabinet and Council of Ministers to the wind,” adds another.

Of course, forging a consensus wasn’t his strength.

State governments had lashed out at Ramesh for not consulting them over several issues. Even Congress-ruled states were up in arms when he refused to consult them over a bill— titled the Homestead Bill—which envisaged offering the rural poor the right to land and a home. Land is a state subject. The National Right to Homestead Bill, 2013, drafted by a task force chaired by Jairam Ramesh, was to offer a poor family in the countryside the right to a piece of land of not less than 10 cents. One cent is one- hundredth of an acre. In March 2013, Uttam Reddy, then housing minister in the Congress-ruled Andhra Pradesh, had said that he was unaware of the details of this bill. V Somanna, his Karnataka counterpart, had said Ramesh was chasing an “impossible dream”. Somanna’s logic was that if you want to build homes for the poor, you have to build high-rises. “Let’s not forget that land is scarce even in the villages in many states. Giving away not less than 10 cents of land is impossible in many states,” he had said.

That was perhaps why when Manmohan Singh elevated Ramesh to a senior minister’s rank and shifted him out of the Environment and Forests Ministry to Rural Development, the then Prime Minister had said that Ramesh’s talents would be “better utilised” in his new assignment. But perhaps the damage was already done.

Mukul Kasliwal of MW Corp blames the UPA (especially during 2009-2011) for “targeting” him and delaying his Maheshwar Hydel Power Project in Madhya Pradesh in the name of green clearances following objections raised by The Narmada Bachao Andolan, an NGO which, Kasliwal alleges, doesn’t disclose its source of funds. He says he is a victim of cronyism, which allows bigger players to influence politicians against smaller ones. Kasliwal says, “I was deeply wronged.” He regrets that the UPA, instead of rewarding him, victimised him and got carried away by NGOism. “When I met [Ramesh], he said he had nothing against me.” It is an irony, he notes with a tinge of regret.

Manmohan Singh, it seems, would always yield to the whims of whoever was seen as close to the Nehru-Gandhi family. While Sonia Gandhi made it a habit to intervene in policy decisions in the first term of the UPA (between 2004 and 2009) through the now-dissolved National Advisory Council (NAC), a panel set up in 2004 of which she was chairperson, Rahul Gandhi started dictating terms toward the end of UPA II. Economists of the eminence of Jagdish Bhagwati had pointed out the hazards of such dual leadership many years earlier. Bhagwati had warned that Singh’s hands were tied because India’s political system was similar to that of the former Soviet Union, where the party was supreme and the chief of government just a figurehead. The professor of economics and law at Columbia University was of the view that “power shifting completely to the party” had taken a huge toll on reforms. He had added in an interview, “[Singh’s] ability to deliver reforms is handicapped by the fact that the people in favour of track-II reforms (social spending, etcetera) around Ms Gandhi are not appreciative of the fact that track-I reforms (growth-oriented initiatives) are absolutely necessary, that we need to intensify and broaden them to continue making a direct impact on poverty and generating revenues [for welfare schemes].” Similarly, in a paper published by Maitreesh Ghatak of London School of Economics, Parikshit Ghosh of Delhi School of Economics and Ashok Kotwal of University of British Columbia, the authors pointed out that the dual leadership only sowed confusion about who was in charge. ‘Whoever we talk to, regardless of political bent, the dynasty seems to be deeply disliked. One reason is that it is seen to seek power without responsibility or engagement, lording over the land from its inscrutable, Kafkaesque castle,’ they wrote.

JAYANTHI’S LETTER BOMB

Ghatak and his co-authors also highlighted challenges posed by ministers such as Ramesh and Natarajan who had been earned resentment within the Congress for pursuing goals seen as their own. They write, ‘The economic challenge before the UPA was to devise new mechanisms and institutional innovations to solve the unique problems that growth threw up. Land acquisition became a headline-grabbing problem under UPA precisely because the economy was growing fast and there was pressure to convert a lot of agricultural land to high value use—industrial, residential or infrastructural….’

A senior government official says that the rebellion against the Congress leadership of Sonia and Rahul Gandhi by Natarajan validates without doubt the charge that the Family was an extra-constitutional authority over the Government. “That has never been a secret. But there is more to such dramatic statements [by Natarajan] than what meets the eye. It exposes the lack of cohesion within and the control that the family now wields in the party. But then, you cannot rule out the possibilities of former ministers making such statements to exonerate themselves in the face of a probe.” Though not in the same way, Natarajan, like Ramesh before him, had earned notoriety. “She had come under the shadow of corruption. Corporates began to say that they had to pay a ‘Jayanthi tax’ to get environmental clearances,” says another government official.

After Natarajan’s exit from the party, Congress leader Anand Sharma (also Natarajan’s senior ministerial colleague in the UPA) said that in August 2013, industrialists at a CII meet held in Mumbai had questioned her functioning, alleging that “files were sent to Chennai for clearance”. Natarajan, of course, had myriad reasons to be worried and upset. The Central Bureau of Investigation (CBI) is probing ‘diversion of forest land’ in Jharkhand and other places to big corporate houses during her stint in power. She has also been charged with ignoring recommendations of the Forests Advisory Committee and doling out contracts. Besides, the Congress High Command, ever since she was unceremoniously ‘relieved’ of ministerial responsibilities in 2013, had refused to rehabilitate her.

RAHUL AND HIS WAYS

“That Rahul and his mother are not able to ward off attacks from within after the rout is a cause of concern for the party,” says a Congress leader, adding that it is their style of functioning that rendered the last Government dysfunctional and even “roguish” to an extent. He adds that proximity to 10 Janpath, the residence of Sonia Gandhi, meant that some ministers could get away with preposterous stuff. “Perhaps Jayanthi deserved to be censured, but Rahul spared many others and didn’t spare even the Prime Minister. All that was unfortunate,” he notes.

A day after Natarajan was shunted out of the UPA Cabinet in 2013, Rahul Gandhi—who had visited Odisha’s Niyamgiri Hills and adopted the posture of a ‘sipahi’ on behalf of Tribals there—had assured corporates that held- up projects would be put on the fast track.

After all, it was not just the likes of Natarajan that Rahul had censured. He had gone to the extent of publicly censuring of the Union Government in September 2013 over an ordinance meant to overrule the Supreme Court order on disqualifying convicted MPs and MLAs. He called the ordinance “nonsense”, detaching himself from the wrongs committed by the UPA, controlled by his own mother. After the Congress was trounced, Milind Deora, the young Congress leader who lost the Mumbai South constituency, in an interview, attacked Rahul Gandhi’s advisors for getting everything wrong. He was upset that whoever got a free hand at running the campaign— a team of lateral entrants to the party handpicked by Rahul much to the anguish of the old guard—didn’t take any responsibility for the biggest reverse in Congress history. It was no secret that the old guard, which includes senior leaders such as Ahmed Patel, Ghulam Nabi Azad and political lightweights such as Jairam Ramesh and Salman Khurshid, was unhappy with the sweeping powers enjoyed by the “new team of loyalists”, to use Deora’s terminology.

Jayanthi Natarajan isn’t the first to hit out at ‘Rahul’s wayward ways’. Some constituents of the UPA have been bolder and more unsparing. The Indian Union Muslim League (IUML) had attacked him for failing to touch the ‘soul of India’. Last year, the IUML mouthpiece, Chandrika, had lashed out at the Congress vice- president for restricting the war-room of the party’s campaign committee to his 12 Tughlak Lane residence and for disallowing access to senior party leaders, who had to seek appointments with the leader via e-mail. The publication’s editorial also castigated Rahul for not learning any lessons from the Congress party’s defeat in the assembly polls held in four states in the latter half of last year. It also expressed regret that the erstwhile ruling party had failed to campaign effectively.

Meanwhile, Rahul Gandhi has replied to Natarajan’s charges, saying he had given her instructions while she was a minister in the UPA. He also accused Modi of “putting up” Natarajan to attack him. “I asked Jayanthi to protect the environment, the poor and the Tribals… I’m not afraid of saying it and I will continue to do so,” Gandhi has said in his usual unspecific way.

Former Finance Minister Yashwant Sinha, who had two years ago blamed Jairam Ramesh for being “singularly responsible for shaving off 2.5 per cent of the GDP” by not granting projects clearances during his stint as India’s Environment Minister, tells Open that “he had agreed to promptly reply to my attack, but even two years later, he hasn’t given an answer”. Sinha says the scenario has been grim, considering the time and cost overruns for these projects. “But I am glad that the new Government is speedily awarding green clearances as per law.” He also terms as “entirely flawed” the Land Acquisition law enacted by the previous regime. Towards the end of Congress rule, according to Sinha, the dispensation was under “triple leadership” instead of the earlier “dual leadership”, rendering “poor Manmohan Singh highly ineffective as a leader and head of the Cabinet”. Early last year, Prime Minister Singh had hoped in an interview that history would be nicer to him than the media. “I honestly believe that history will be kinder to me than the contemporary media, or for that matter, the Opposition parties in Parliament. I cannot divulge all things that take place in the Cabinet system of government. I think, taking into account the circumstances, and the compulsions of a coalition polity, I have done the best I could under the circumstances,” he had said.

Sinha, meanwhile, sees no merit in Natarajan’s charges that she did what she did because she was asked to. “I am not a lawyer, and she is. But I know one thing: you can’t exonerate yourself for a crime you did by saying you were asked to do so by your master,” says the former Finance Minister.

In her letter to Sonia Gandhi, Natarajan wrote: “I was never a bottleneck nor was I ever responsible for unwarranted delays in major projects…. I received specific requests (which used to be directives for us) from Rahul and his office, forwarding environmental concerns in some important areas and I took care to honour those ‘requests’. Rahul went to Niyamgiri Hills in Odisha, and publicly declared to the Dongria Kondh tribals that he would be their ‘sipahi’. His views were conveyed to me by his office and I took great care to ensure that the interests of the tribals were protected and rejected environmental clearance to Vedanta despite tremendous pressure from my colleagues in cabinet, and huge criticism from industry for what was described as ‘stalling’ a Rs 30,000 crore investment from Vedanta.’ She also wrote in the letter that ‘the same happened in the case of Adani projects where I faced tremendous criticism from within the cabinet and outside, for stalling investment at a time when the country was going through a difficult time in terms of the economy. The complaints of the local fisher folk and NGOs of environmental violations in the Adani case were forwarded to me by Rahul’s office.’

For the time being, her letter may have provided fodder to rival parties and ruffled feathers within the Congress, but for a lawyer-politician who has kept a low-profile ever since her party lost power, Natarajan’s outbursts do betray a sense of desperation. As she briefly hogs the headlines, what comes to the fore is the nature of the Government the country had in those days. The whole experience bordered on the grim: Ramesh was bullish, some others reckless, Singh helpless and a few others corrupt to the core. Looks like more skeletons are likely to tumble out.

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