VR Logo

Well-oiled Wheels of Favouritism

The government's credibility has taken another knock with the removal of an home minister

Few could have anticipated that after Robert Vadra, son-in-law of the first family and Nitin Gadkari, president of the Bharatiya Janata Party, anti-corruption activists Arvind Kejriwal and Prashant Bhushan would train their guns on India’s richest man, Mukesh Ambani. What was truly amazing was that they were handed over their target on a platter, thanks to the thorough ineptitude of the government. By shunting out Sudini Jaipal Reddy from the Petroleum and Natural Gas Ministry, Prime Minister Manmohan Singh ensured that his self-goal would weaken his already-tottering government.

What has angered many is that the flurry of allegations of corruption against the high and mighty (in both Congress and BJP) has come at a time when the incumbent regime has been singularly ineffective in controlling runaway food inflation. And it is this anger and outrage that is being effectively tapped today by the ‘India Against Corruption’ movement.

There was next to nothing about the manner in which the country’s biggest corporate entity in the private sector, Reliance Industries Limited, was extracting natural gas from the Krishna Godavari basin off the eastern coast, that was not known before Kejriwal and Bhushan decided to launch their tirade. The Comptroller and Auditor General of India had categorically pointed out that the production sharing contract that had been signed between RIL and the Ministry of Petroleum and Natural Gas was heavily loaded in favour of the former and against the interests of the public exchequer.

The CAG had pointed out that it suspected RIL of “gold-plating” or deliberately inflating capital expenditure to increase profits. It pointed out infirmities and anomalies in the manner in which contracts had been awarded even as RIL staunchly opposed submitting its records for scrutiny.

For many months, there had been a running battle between representatives of RIL and the Ministry on the administered pricing of gas. The government alleged that the company had deliberately reduced gas output in anticipation of higher prices and that the precipitous fall in gas production from the KG basin was exacerbating the acute energy shortage in the country. RIL, on the other hand, argued that the sharp drop in the gas extracted (by around three-fourths) was account of geological complexities, an argument that the Ministry refused to buy. What certainly did not help RIL’s case was that a pliant former regulator, the Director General of Hydrocarbons (who is currently facing criminal charges of favouritism and bribery) was replaced by an upright technocrat.

It was under these circumstances that the Prime Minister chose to replace Jaipal Reddy by Veerappa Moily. By doing so, he opened all his flanks. Reddy had a reputation for probity unlike his predecessor Murli Deora. Reddy covered his tracks by putting everything down on paper. He and his group of trusted bureaucrats had calculated the loss to the country. They had lobbied hard, as hard as those on the other side. Information was selectively leaked to the media.

What Kejriwal and Bhushan successfully did was connect the dots to complete the picture. When it was rhetorically asked whether the real ruler of India was Manmohan Singh or Mukesh Ambani, they hit hard with a message that resonated among many who were all too aware of the ugly nexus between corrupt businesspersons and their political benefactors. They drew a link between the higher prices of gas to the rise in the prices of power and fertiliser to drive home the message that corruption and inflation were interlinked.

The most successful outcome of the entire episode is that the pitch has been queered for Moily. If he tries to increase gas prices or accede to RIL’s other demands that their activities should not be closely examined by the CAG, there will be a huge hue and cry. The most powerful man in the country (which the Prime Minister is supposed to be) and India’s richest man (Mukesh Ambani) could not have dealt their cards and played their hands in a worse manner. Their gamble has badly backfired.