The mining business, legal and illegal, is dictating politics across the country. In Haryana, the mining racket in the Aravallis is believed to have resulted in the powerful section of the Congress camp upstaging its rivals in the in-house power stakes. In Madhya Pradesh, quarrying has helped people across party lines make fortunes to finance themselves and their parties.
The UPA had just romped home to a second consecutive general election victory in May 2009 and the high command – Sonia Gandhi – and Prime Minister Manmohan Singh had announced the list of ministersto-be. But there was an excruciating delay in the allotment of portfolios. At that time, a known capital-based pointsperson of a big industrial house with interests in mining-related products visited a minister-elect at his plush Lutyens bungalow ostensibly to congratulate him. As he was leaving, he whispered to the minister’s Officer on Special Duty: “During the government’s previous tenure, we did not keep in touch. But this time, we will have a close relationship. ” The officer scratched his head but could not guess what was in store. Within days, the minister landed a portfolio related to natural resources.
The rise of the mining barons in commodity-rich states like Karnataka, Chhattisgarh, Andhra Pradesh, Orissa, Madhya Pradesh and Jharkhand has thrown into sharp relief the clout of moneybags in mainstream politics. Lobbies are nothing new in politics. Those representing education, liquor, and lottery businesses have influenced policy decisions for a long time. But the scenario today is different: spend sackfuls of money to get yourself and your cronies elected. Use this muscle to get powerful cabinet portfolios for your cabal. Then use your offices to get the government, of which you are a part, to change the rules to favour your business or better still to allot you limited, precious natural resources and further expand your business and make more money.
This upfront, unapologetic grab for power is in contrast to the days of yore when business honchos were content with being king-makers. They would generally spread their risk and finance political parties and politicians across the spectrum. So irrespective of who came to power, their interests would be protected. The sugar barons of Maharashtra, the liquor contractors of Karnataka, the gutka kings of west India and the coal barons of Bihar are some good examples. With liberalisation, the death of the license raj, emergence of new industries and changes in the business environment, the power of old oligarchs waned. Real estate developers took their place, willing to fund specific politicians or parties in return for favourable terms for development and land use conversion.
While the legitimate business by itself was greatly lucrative, what made the mining sector even more attractive is India’s nominal royalty rates and immense scope for illegal mining. Miners today are powerful enough not only to make or break individual politicians but also political parties, as the Karnataka example has shown. Perhaps chief minister BS Yeddiyurappa, who rode to power aided by the monetary muscle of Bellary’s Reddy brothers, knows this best. The brothers almost staged a coup when the chief minister tried to assert himself. The wheel may be turning again, with their money helping engineer defections to tilt the tenuous balance in the Karnataka assembly, but the CM is unlikely to feel comfortable.
There are rumblings across parties for two reasons. One, mining interests are forming trans-party alliances between individuals or groups, thus giving a cynical twist to their operations. Two, within parties, the benefactors earn the loyalty of legislators they have funded. The beneficiaries are willing to do the bidding of their financial masters, going as far as revolting against the party leadership. Till now, the popular perception was that mining barons engaged with politics only to push their own agendas or to earn immunity from the law. Now we know that they entertain leadership ambitions too. They see no reason why they cannot become chief ministers or powerful cabinet ministers in the government, which, after all, is in power because of their money.
Karnataka has been witness to a bizarre situation where many ministers who are businessmen are using the executive power they have to further expand their business interests. The government of Karnataka held an ambitious Global Investors Meet (GIM) in June. The government managed to get blue chip Indian and multinational companies to announce investments in excess of four lakh crore rupees. Corporate heavyweights such as Lakshmi Mittal and Kumar Managalam Birla shared the dais with the chief minister. But guess whose project was the biggest – bigger than those of the Mittals or Birlas? The powerful miner-minister Janardhana Reddy’s. His company – Brahmani Industries – committed to invest Rs 36, 000 crore for a six million-tonne-per annum integrated steel and captive power plant. There were no murmurs, forget protests, about the state cabinet sanctioning such a large project for one of its own members.
The Congress though is no stranger to the murky mining business. Observers underline that in Karnataka, it was the Congress that was once the Big Daddy of mining till regional parties like the JD(S) and the BJP stepped into the picture. NY Ghorpade of the royal family of Sandur, which had considerable mining interests, was a minister in successive Congress regimes in Karnataka for three decades. The Congress has also adopted barons Santosh Lad and Anil Lad from Bellary. The party’s central command now has its hands full with rebellious MP Jaganmohan Reddy in Andhra Pradesh, who has business links with the Bellary Reddys of Karnataka. “What has happened is that the Congress has been beaten at its own game, ” an observer told TOI-Crest.
The mining business, legal and illegal, is dictating politics across the country. In Haryana, the mining racket in the Aravallis is believed to have resulted in the powerful section of the Congress camp upstaging its rivals in the in-house power stakes. In Madhya Pradesh, quarrying has helped people across party lines make fortunes to finance themselves and their parties. The mineral-rich Jharkhand has come to be known as the den of illegal dealings. The Madhu Koda scam has exposed a well-oiled patronage network run by a chief minister who was an independent MLA. When the BJP formed its government last month with the JMM – within months of breaking away – two business groups were instrumental in brokering the patch-up.
Political observers lay much of the blame for the mining mess at the doors of political parties, which, they argue, put immense pressure on chief ministers to generate funds for the party. The excessive demands, on which depends the incumbent’s survival in a centralised party, have forced chief ministers to milk mining activities, which give high profit margins. Conflictof-interest is a phrase that sounds so dated in this environment. At a time when traditional channels of funding – like the liquor and education businesses – have somewhat dried up, mines are feeding the ever-hungry political system.
From the Crest Edition, Times O f India, October 30, 2010