Saturday, April 6, 2013

The CAG is still a fool….but the BJP is worse in defending Modi….

The CAG has brought out a report on Gujarat, which claims that the state government gave away land at concessional rates and hence suffered a notional loss for several thousand crores. It had made a similar assertion when 2G airwaves and coal mines were given away at concessional rates. The CAG doesn’t have to behave like this, but it chooses to. One has to give it marks for being consistently asinine!

One may argue that it is not the CAG’s job to think about the future benefits arising from a concession-based government policy, but unfortunately for the CAG, it has itself stated in the past that its writ cannot be limited to mere accounting. Having chosen to expand its mandate in this way, the CAG has no place left to hide.

The Gujarat government has explained away the CAG’s findings by pointing out how much industrial growth happened as a result of the policy, how many new jobs were created, and how much overall progress the state made. The BJP has done a much better job of explaining the state policy than the Congress did at the Center explaining its 2G and coal mining policies. The BJP may thus escape the sharp glare of media. But the truth is that the BJP has been audacious, arrogant and even facetious with their defence of Modi.

The CAG report has led to a 180 degrees turn in the BJP’s approach to such reports. Consider the following:

1)    The CAG report says that land was given away at concessional rates to some corporates. The state government says this was to encourage industrial growth. What is wrong in this argument is that the state government should have announced a transparent concessional land policy so that benefits could be derived by all potential investors and industrialists. It didn’t do that. Instead, it gave concessions to a favored few, distorting access to concessional land in the process (this is the exact definition of crony capitalism). This reeks of arbitrariness, the desire to play god, and the possibility that beneficiaries were compelled to praise Modi to the skies. This probably explains why the Ambanis (especially for Reliance Petroleum), Adanis (huge empire in Gujarat) and Tatas (Nano) are some of those who have demanded that Modi be made PM!
2)    The BJP has said that many Congress states also give similar concessions to industrialists. But the difference is that these concessions are part of an overall policy. Whenever the government has made exceptions for individual corporates, it has been hauled up. Recently in Mumbai, the state government was hauled up by the High Court for land given at a concessional rate to noted film maker Subhash Ghai for setting up his private film school, Whistling Woods. The court pointed out the same thing: that this was not a “policy” – it was an “exception” and that was wrong. It’s the same with the CAG’s observations about Gujarat.
3)    The CAG report says that a few industrialists – notably Adani – saw penalties waived off. Everyone knows the strong linkages between Adani and Modi. You decide what this reeks of? And the BJP has the audacity to blame the Congress for corruption?
4)    The BJP wants to now remind us that there is a procedure to be followed with CAG reports. That there is a PAC in the state assembly and that is where debates should take place. It remembered none of this procedure when the CAG reports on the central government were tabled in Parliament! The BJP then preferred to carry out those debates on national media. It even went so far as to disrupt a full session of Parliament, demanding that a JPC be set up on 2G, even though the PAC is exactly the same body. The PAC is made up of 22 members belonging to different parties and is headed presently by senior BJP member, Dr. Murli Manohar Joshi. The JPC ended up repeating the work of the PAC….but it is bound to sting the BJP because the JPC is headed by a Congressman! The BJP was not interested in the truth; it only wanted an excuse to stall Parliament, and get more reason and excuse for its TV attacks.
5)    In a facetious manner, the BJP now claims that the Gujarat policy of concessional land predates Modi! How strange…..that it forgets to mention that growth also predates Modi?! How strange also that it forgot that the 2G cheap spectrum policy also predated the Congress? That the BJP had continued giving spectrum at 2001 prices as late as in 2004?
6)    The CAG report on GIFT (Gujarat International Finance Tech-city) says the loss is of the order of Rs 2700 crores. This may look piffling compared to the mega scams at the center, but lets get some perspective on this. The country’s GDP is about 13 time Gujarat’s, so the GIFT scam itself is the equivalent of Rs 35000 crores at the nationa level! Gujarat and Modi surely are ready for the national stage!

The BJP is far better than the Congress is providing explanations. The Congress should have explained how much the country gained by its concessional 2G spectrum policy – which led to the massive growth in telecom density. Higher telecom density led to an empowerment of the poorest and a chance for them to start and expand small businesses (this is what inclusive growth means). The success of 2G also created the right grounds for the government to milk 3G spectrum – we now realize how much extra telcos paid for this (By the way, no one forced the Congress into the ascending auctions. They thought of that themselves. If they were corrupt, why would they do that?). Will the CAG bring out how the benefits of 2G may have been captured under 3G auctions? Will the CAG consider the impact of the cheap coal mines policy on power generation? The total installed power generation capacity in India has doubled from 1 lac MW to 2 lac MWs in the last 10 years. Our electricity tariffs are the cheapest in the world. The cheap power has powered India’s GDP growth. Would the CAG care to look at all these benefits from a cheap coal mines policy? It of course wont! And that is why I still call it a fool.

But for the BJP to talk its way out of its Gujarat mess is bizarre. It surely hurts the party. In fact, more than the CAG report itself, it is the explanations which show the BJP in a poor light. It yet again shows that the party is hardly a party with a difference. Whatever it has accused the Congress of….it is being accused of the same now.

The real truth is that the BJP has no place left to hide after the CAG’s Gujarat report. The explanations the party has given are facetious. Modi’s model of economic growth is based on attracting industries, but he doesn’t want to do it transparently. He wants to do it selectively, extracting unknown benefits for himself and his party in the process. Imagine if the state also had a Lok Ayukta for the past ten years…..a lot more would have been heard about corruption in the state…..

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