Email
Print
ShareThe first casualty of any election is Satyam (the Truth).
Financial wizards, accounting tigers and company law gurus are all having discussions on the fall and fall of the Raju kingdom. There are debates about international financial reporting standards -- since Satyam was one of the first companies to adopt this -- besides audit committees, independent directors and the role of regulators such as Sebi.
Either these experts are all from Mars and know nothing about the political economy of our country, or they are really shy of talking about it.
Let us assemble the facts first.
Fact 1
Tirumangalam is a constituency in Tamil Nadu where a by-election took place on Friday for electing an MLA. Reports suggest that each voter is given at least Rs 500 in cash. The local minister and son of the current chief minister has been accused of distributing cash and caught on camera. The state election commissioner bemoans that Tamil Nadu is "excelling" Bihar and UP in electoral malpractices.
The recently concluded elections for eight MLAs in Karnataka saw politicians of every party giving cash in the form of donations on aarti plates and the amount was never less than Rs 100. A number of women were keen to do aarti to politicians of all sizes and shapes, not because they loved them as much as because they expected cash on the plates. Elections are becoming obscenely expensive and electors expect cash -- at least Rs 1,000 as one elderly lady voter mentioned in Tirumangalam.
Post-election bribes using the state exchequer, such as free rice or free TV, are fine, but electors these days say give us hard cash while canvassing. This is celebrating democracy in the most effective way!
This implies that the amount required for the coming Lok Sabha election is mind boggling. The major parties are not in power in all the states, unlike the sixties when the Congress alone was the ruling party in every state. Already, we find forced collection of cash by the UP chief minister from the usually corrupt departments and even allegations of murder charges against one of her MLAs.
DMK has always kept the telecommunication ministry with it, perhaps for the last 15 years, whether it is the NDA or the UPA government. There are allegations that the telecom ministry has lost nearly Rs 80,000 crore due to the spectrum allocations and correspondingly, the politicians have gained.
DMK has also always held the ministry of roadways. The Delhi High Court recently pulled up the ministry for tardy work and for having five chairmen in two years.
Same is the case in every state and every political party wants cash to fight the coming elections, in multiple crores.
Fact 2
Real estate is mainly under the control/ regulation of the state government. It is a scandal from the word 'go'.
In Karnataka, there is a fascinating project called Nandi Infrastructure Corridor (the company is called NICE), which is to connect Bangalore with Mysore with a superfast expressway and develop townships along the route. The number of court cases, allegations and counter allegations etc pertaining to this project is mind boggling.
Former prime minister Deve Gowda has brought out a large book only on this project and how it is full of corruption. The opponents accuse him of being vindictive since his bribe demands have not been met. Similarly, the real estate/ infrastructure projects are known to be obtained by being in the "good books" of politicians who have the power to approve it. Whether it is a road project or airports or expressway or metro rail, the situation is alarming. That is the reason we find many infrastructure projects do not have enough takers.
The government's ambitious highway projects under the public-private partnership mode are in serious trouble. Construction companies have either not put in bids or have withdrawn from 20 such projects, under the build, operate and transfer (BOT) scheme.
According to a report in a prominent business daily, large construction companies like Larsen & Toubro, Hindustan Construction, Nagarjuna Construction, Maytas Infra (promoted by Satyam Computer boss Ramalinga Raju), DLF Infrastructure, Gammon India and GVK Industries have withdrawn from over 15 highway projects planned in various parts of the country.
The report said five highway projects worth nearly Rs 3,000 crore have failed to find a single bidder in the last two months. These companies find BOT projects unviable due to high interest costs, which have squeezed profit margins, besides faulty traffic projections and the stiff penalty clauses if the project is delayed for reasons not under their control. In most of these projects, the companies that have withdrawn from the bids were already amongst the top six players selected during the technical qualification stage. This could leave only smaller construction companies with little experience in the fray.
Unfortunately, no newspaper will speak about the huge bribery involved in getting many of these projects. We are a shy nation, whether in giving or in taking. With politicians becoming rapacious due to the forthcoming elections, the "bribe tax" has phenomenally increased and hence no major project can be viable from the point of view of major firms. Some upstarts or completely bogus contractors can only undertake such projects where the width, thickness or even the length of the road can be compromised.
