Financial
Express: New Delhi: Tuesday, October 16, 2012.
Commoditisation
of real estate has become an easy milch cow for a small elite.
The UPA had
succeeded in altering the public discourse over the past two months by focusing
on some bold economic decisions. For a few weeks, newspapers and television
channels only debated the pros and cons of foreign investment in multi-brand
retail as well as the impact of diesel and LPG price hikes on the aam aadmi.
The opposition was visibly stung by this changed narrative which the UPA had
audaciously managed to pull off. However, some of that advantage seems to be
dissipating with Arvind Kejriwal and his team launching serial attacks against
the allegedly corrupt practices of some key Congress leaders.
Of course,
the government’s response to Kejriwal’s revelations in regard to the real
estate deals of Robert Vadra, son-in-law of Congress President Sonia Gandhi,
has been most ham-handed. Prime Minister Manmohan Singh’s silence on the
matter, for a change, was most appropriate. There was really no need for some
of the ministers to comment on the allegations made against Vadra’s allegedly
cosy business deals with the real estate company DLF. The government initially
rightly said Vadra had been dealing with DLF as a private citizen and
businessman. If that was so, the government had really no business to say
Vadra’s business balance sheet had no irregularity. For instance, the corporate
affairs minister, under whose administration the Registrar of Companies (RoC)
falls, had prematurely stated there was nothing wrong with the balance sheets
filed by Vadra with the RoC. Within 48 hours, the Corporation Bank gave out a
statement proving that a key balance sheet entry in Vadra’s company was false.
Vadra had
shown an overdraft of R7.4 crore received from the Corporation Bank. This has
been outrightly denied by the Corporation Bank. Now, Arvind Kejriwal’s team
wants the RoC and other relevant government departments to investigate the
source of R7.4 crore in the balance sheet, shown as overdraft. Whose money was
it? In short, the government is tying itself in knots over the Vadra-DLF
affair.
In public
perception, at least among the middle classes, Kejriwal has seized the moment
and has managed to distract the government from its task of implementing new
reforms it had embarked on. The focus may well shift back to corruption in high
places now. In such a charged atmosphere, it is not even clear whether the BJP
will cooperate with the government in the next phase of implementation of
overdue reforms in the financial sector which P Chidambaram recently announced.
Indeed, it appears to be a rough road ahead for the UPA.
At a broader
level, by highlighting Vadra’s allegedly privileged associations with the DLF
group and Haryana chief minister Bhupinder Singh Hooda, Kejriwal has succeeded
in opening the sluice gates for another series of allegations and
counter-allegations concerning members of important political families. Indeed,
talking about them was taboo so far. Even on the Vadra-DLF affair, most
established political parties were quite muted in the first few days. In some
ways, all these developments must be traced back to the right to information
(RTI) legislation which the UPA-1 had enacted.
RTI was
indeed a silent revolution which now seems to be devouring its progenitors! The
documents relating to Vadra’s business or Salman Khurshid’s NGO in Lucknow were
both procured through the instrument of RTI. Prime Minister Manmohan Singh last
week suggested that RTI should not be allowed to invade the privacy of people.
Manmohan Singh was trying to be nuanced in his formulation but to suggest any
dilution of the RTI legislation in the current political climate would go
against the spirit of the times. The Congress should fully own the process of
system cleansing it has triggered through the instrument of RTI, even if the
government’s own reputation takes a beating in the process.
True, the
current churn caused by the campaign spearheaded by India Against Corruption
(IAC) would appear to impede the government’s efforts to push further economic
reforms, but it is equally true that the campaign by IAC is striking at the
very roots of the system of spoils that the elite among big businesses and
politics had created in the 20 years since economic reforms were launched. This
system of spoils is getting regularly exposed as seen in the spectrum scam or
Coalgate.
The Vadra-DLF
association simply shows how the geometric growth in land values in the past 10
years, driven by global and domestic liquidity, had led to the commoditisation
of real estate which became an easy milch cow for a small elite that had the
benefit of privileged information. Regional parties and politicians have also
made hay by buying up massive land near developmental sites such as airports,
roads, etc, about which they had privileged information. Information asymmetry
in the marketplace is what divides the elites from the non-elites today. This
divide had reached unsustainable levels. A critical governance reform is to
minimise this information asymmetry which is threatening to derail India’s
inclusive capitalist development.
Therefore,
the current anti-corruption campaign against the established political and
business elite could be seen as eventually leading up to governance reforms
which will make information and opportunity far more inclusive than they are at
present. In a sense, the Congress party needs to be commended for giving the
RTI legislation to this nation, even if it is making the pNational Load
Dispatch CenterNational Load Dispatch CenterVBresent political class and
business elite look so ugly at times.
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