The Andhra Jagannaut

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Will Jaganmohan Reddy’s arrest prove costly for the Congress?

HYDERABAD  ~ A change of heart overnight is quite common in Indian politics. But the speed with which it occurs within the Congress party leaves even the wiliest politicians dizzy. Before Jaganmohan Reddy, the son of the late Andhra chief minister, YS Rajasekhara Reddy, could even put up a fight against the Congress in the 12 June by-elections, he was jailed by the Central Bureau of Investigation in a disproportionate assets case.

While the timing of the arrest is being questioned, the Congress feels it has succeeded in making its flock think twice before joining the Jagan camp, as well as in making it clear to the electorate that the father-son duo was in fact looting public money by forcing beneficiaries of the YSR regime to invest in Jagan’s companies. But, the flip side is that after the largely successful Odarpu, or thanksgiving yatra, that Jagan undertook to console families of those who committed suicide or died after YSR’s sudden death in September 2009 in a helicopter crash, it might lead to a sympathy wave in favour of the young scion who left the Congress after the leadership refused to make him chief minister.  The Congress had tried its best to prevent the yatra from taking place.

Till last week’s arrest, the by-elections were being thought of as the semi-final to the 2014 Assembly elections with the very real possibility of an alternative to the Congress and Telugu Desam Party emerging. These bypolls are also being seen as important for two other reasons. The first is that 17 Congress MLAs and one legislator who had resigned from Chiranjeevi’s Praja Rajyam Party—which has since merged with the Congress—are hoping to get re-elected on a YSR Congress ticket. This is the party founded by Jagan after he broke away from the Congress. Second, apart from the sole seat in Telangana, the other by-elections are in the coastal and Rayalaseema region, which have been opposing division of the state. All the three parties have steered clear of the Telangana question as they enjoy a large support base here.

Jagan, who has been remanded to 14 days judicial custody, is desperately trying to get bail with an eye on the polls. But, there is more trouble coming his way as the Enforcement Directorate has just filed an Enforcement Case Information Report (ECIR), similar to an FIR, naming Jagan and 71 others for offences under the Prevention of Money Laundering Act and Foreign Exchange Management Act.

The ECIR alleges that his companies illegally received Rs 2,500 crore invested by third parties who benefitted from the decisions taken by his father’s regime. It is alleged that these favours involving public properties, licences, mining rights, SEZs and other projects were doled out violating established norms and procedures with a clear understanding of a quid pro quo.

Jagan, 39, is currently the richest MP; he declared his personal wealth at Rs 365 crore before the Kadapa Lok Sabha by-election in June 2011. He has maintained that there is nothing wrong if someone invests in his companies. Jagan’s chartered accountant, Vijay Sai Reddy, says all the charges against the YSR family are politically motivated. “If the CBI or any other agency had adequate proof, they could have arrested him long back, especially as he was named accused number one.’’ Reddy has a point here as the CBI in its first FIR had named the late YSR a criminal conspirator. This action did not go down well with many in the Andhra Congress. Later, the CBI turned more discreet. Asked about the delay in arresting the accused, a CBI sleuth told reporters: “The preparation (sic) is being marinated like the famous Hyderabad biryani. It will take some time.”

It is clear that Jagan has the money to fund elections. Moreover, there is a lot of support within the Congress for YSR. At different times in the past two-and-a-half years, as many as 60 Congress MLAs have batted openly for Jagan. Only a few months ago, 17 Congress MLAs went against the party line during an Opposition-sponsored no-confidence motion, and resigned to join the YSR Congress. “The Congress is just above the half-way mark after merging with Praja Rajyam Party. If it loses any more MLAs, the government will collapse,’’ says a YSR Congress spokesperson.

The Congress plans to stem a further exodus by giving Jagan a bad name. “With his arrest, there will be no sympathy as the father-son duo is exposed as people who looted the state,’’ says a Congress leader. The TDP echoes a similar sentiment, presumably because the party has not won a single by-election during this term. But their thinking could be misplaced as a significant part of the electorate in regions where bypolls are being held hold YSR in high esteem. They credit the late CM with having started many programmes for the poor and needy. In contrast, chief ministers since YSR have maintained there is no money to run such welfare programmes.Sakshi TV and the newspaper run by Jagan are carefully orchestrating the welfare programmes started by YSR and comparing it with the present government.

With Jagan’s arrest, it seems the Congress has finally shaken off its YSR legacy. “The government will take a relook at all big-ticket orders passed during YSR’s chief ministership,’’ says Kiran Kumar Reddy. “The party is going back to the days when it trusted only K Vijayabhaskara Reddy in AP. It had completely kept YSR away till 2004 when he undertook a padayatra to bring the Congress back to power after the TDP’s two terms. This shift is significant as the party does not want to encourage a mini dynasty in its stronghold,’’ says a Congress leader who is the ears and eyes of the high command.