Southern India political corruption hits Sonia Gandhi and Congress

If Y.S.Jaganmohan Reddy (below), a young regional politician in southern India, had not tried to become the Congress chief minister of Andhra Pradesh state immediately after his father Y.S.Rajasekhara Reddy (YSR), who held that job, was killed in a helicopter crash in September 2009, he almost certainly would not be in jail now accused of massive corruption. And if the Congress Party had handled his succession bid more adeptly, it would not have suffered the drubbing from Jaganmohan’s new breakaway party that was announced in state assembly election results today.

Or to put it another way, if Sonia Gandhi, leader of Congress and of India’s governing coalition, had handled the ambitions of Jaganmohan (generally known as Jagan) more astutely, and if she had not let the ensuing crisis exacerbate demands for Andhra to be split into two states, she might not be facing yet another regional crisis today.

It might seem idle to focus on the events in one state when the steady decline of India’s political and economic affairs, which I have been tracking on this blog for three years or more, has now reached a new tipping point with worsening economic news and chaotic presidential politicking. I am doing so however because the story of Andhra mirrors the story of India’s declining governance and economic prospects under the current government and Congress leadership.

India’s government failings have become so serious that I wondered why Mamata Banerjee, the mischievous West Bengal chief minister and a partner in the coalition, did not go further two days ago when she proposed prime minister Manmohan Singh as a candidate for India’s presidency, thus hinting he should be ousted from the prime minister’s job. Her suggestion of course was rejected by the Congress Party, which announced today it is backing finance minister Pranab Mukherjee for the post. But why not, I wondered hypothetically, suggest that Sonia Gandhi should become president and maybe Manmohan Singh vice president – wouldn’t that have directed Banerjee’s criticisms where they ought to have been targeted?

But to return to Andhra. Here is a state that five to ten years ago was a focal point of India’s booming information technology industry and a symbol of the new India that saw itself growing into a world super-power alongside China. Now it is a symbol of India in decline because of its all-consuming corruption based on political-corporate cronyism, with dynastic  ambitions based on personal greed, and the lauding of companies that grow fat on fraudulent land and other deals. Significantly, that personal greed has opened up the corrupt dealings of the embryo YSR-Jagan dynasty. It has also exposed how India’s government manipulates the Criminal Investigation Bureau (CBI), which has focussed on investigating Jagan ever since he became a serious political problem for the Congress Party nationally.

It is hard to believe that 39-year old Jagan’s jailing, (below) which was ordered on May 28 for two weeks (later extended to June 25), was not intended to remove him, as it did, from canvassing in the run-up to the elections that took place on Wednesday. Such are the ways of politics and corruption in India that those who stay loyal to their political chiefs and allies rarely go to prison, whereas trouble makers suddenly find their misdeeds, that had been condoned in the past, being splashed across the newspapers and the police knocking on their door.

Deservedly then, Congress has done appallingly in the results today for 18 state assembly seats and one Lok Sabha constituency, where by-elections were caused by the resignations or disqualification of pro-Jagan Congress members. Jagan’s breakaway YSR Congress Party has won 14 of the assembly seats, and the Lok Sabha seat – albeit after voters were bribed with massive amounts of cash, jewellery and other gifts that helped swell the turnout to an astonishingly high total of around 80%.

The result upsets the stability of the current state Congress government and projects Jagan as the possible chief minister after the next state polls due in 2014. Jagan’s jailing probably boosted anti-Congress sympathy votes in his favour instead of preventing him from winning over the electorate, illustrating how badly Congress handles its affairs regionally as well as nationally.

Jagan was jailed after the CBI launched a disproportionate assets case and alleged that he had taken bribes totalling Rs1,172cr (approx $250m) in a series of deals during YSR’s time as chief minister from 2004 till his death.

A skilful regional politician, YSR had worked during his five years as chief minister for the state’s overall development and the rural poor, building an unassailable regional power base and combining that with loyalty to the Gandhi family. This was despite widespread allegations of significant family corruption involving him and Jagan with infrastructure contracts and land allocations.

Sonia Gandhi and her fellow national party leaders appear to have done nothing to stop these activities, thus mirroring allegations now faced by prime minister Manmohan Singh that he knew about bribery in India’s 2G telecommunications scandal, and most recently, in allegations of massive coal industry corruption, yet did nothing to stop it.

Jagan had built up media, cement and mining companies with the help of his father, whose corporate links included Satyam, a top software company that crashed in 2008 in a fraud scandal which began to open the lid on Andhra’s crony capitalism. YSR changed the pattern of traditional corruption where politicians and bureaucrats take bribes in return for favours. Instead, he secured the loyalty of supporters by providing business opportunities and land allocations in state irrigation and highway projects, real estate activities, special economic zones, and other schemes, in which the politicians then invested. Instead of just taking kickbacks, he, his family and political associates, became stakeholders – and the beneficiaries allegedly channelled funds into Sakshi, a newspaper business run by Jagan. The deals spilled over into mining scandals in the neighbouring state of Karnataka.

If YSR had not been killed in the 2009 helicopter crash, it is reasonable to assume that these projects and the corruption and kickbacks would be continuing today, with a grateful Congress Party nationally valuing its firm and valuable friend. No doubt there would have been more corruption allegations and some deals might have come unstuck, but the current crisis would not have built up.

For a slightly longer version of this article, go to John Elliott’s Riding the Elephant blog – http://wp.me/pieST-1IK

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• TyrantInShorts

  Its a bit like Saddam and his sons. These people are ruling Indian states like their personal kingdoms.

• http://profile.yahoo.com/GSMUYP62QQBOY3FDZNCT6TKZGI Jagan

  Jagan had ensured business has to pay rather than just make profits and people in the base of pyramid has benefitted from this method hence the public support. India still lives in the villages and he ensured, they get benefits.
  People in city wont vote only watch TVs. But people in village vote they vote for who can help in meeting there ends, corrupt or not corrupt doesnt matter for them.

• http://twitter.com/TheLawMap TheLawMap

  Orientalism ushered in a new era of trying to look at the Orient in a new light. The overriding issues raised in Edward Said’s epoch is very much valid for much of the developing world, including India. Judging the Indian political establishment by comparing it to a western state is likely to cause concern. This is what indigenous Indians are wary of. Add to this the complex jingoistic and at time revisionist history that the opposition parties endeavor to propound, the problem is further exacerbated. Identity, continuity and the political state is still adjusting to the very specific cultural platform that South East Asian countries maintain. There is an immense web of corruption in India as there is in Greece and much of Russia, but each of these states are yet to reach that commonly acceptable post-scarcity plane of USA, UK, Germany and certainly the Scandinavian countries. The Leveson enquiry in UK demonstrated that even in an advanced state where popular democracy has been the norm since 1832 it is possible for collusion to exist between the politician and the self-interested lobbyist. Ultimately, politicians in all countries feel an indomitable urge to cling on to power. The motivation for this might well be the desire for power itself or more materialistic manifestations of power but the desire is the very same. Or maybe, we are just sceptical and the politician still harbours the desire of turning the impossible into possible through the political machinery.

  The problem that has been identified is not an Indian problem but a problem borne of poverty and an inability to do anything about it in the face of a vast wealth creation opportunities.

  Excellent blog by the way!