Spurious Robert Vadra development model
As a business, the Vadra-deal is not above suspicion. It is not even a desirable way of land transactions. It deprives land-owners of the legitimate value of their land just because they are not smart enough
Attacking what is widely acknowledged in the current election scene as a desirable and achievable ideal, the Gujarat Model, Congress vice president Rahul Gandhi ridiculed it as kids buying toffee for a rupee each. More seriously, he himself explained it was a reference to the Gujarat Government giving away land to various industrial houses like Adani and the Tatas at a throwaway price of a rupee a square metre.
It is invariably tit for tat. Naturally, others hit back the Congress leader. They asked him to explain what sort of a model it is when his relative Robert Vadra buys land dirt cheap in Haryana and Rajasthan, using a company with a token capital of just one lakh rupees. Then Mr Vadra gets a loan from realty giant DLF to buy that land which, soon enough, is notified by the State Governments then ruled by the Congress, leading to a boost in the land price. The same DLF that gave Mr Vadra’s one- lakh-rupee-capital company crores of rupees as loan then buys back the land by paying the Vadra-owned company several times the price which he paid to the previous owners.
In the process Mr Vadra makes a cool `300 crore. In the Gujarat Model, where land is given cheap to industrial houses to set up plants, the transaction leads to large-scale manufacturing plants coming up, benefiting the local population with jobs and rise in their incomes. The entire country benefits as the industrial plants add to its production and trade that boosts its GDP.
Compare this to the Vadra Model. Certainly every private individual has a right to buy or sell land and make a big cut in the process. No sane person could question this. But what lesson does it give to the national projection? Of a land grab where the crucial factor that enhances the land value is the insider information?
Apart from the curious case of from where comes the insider information, or of collusion between somebody at the State Government-level leaking the critical information or of creating that critical information, the model makes no contribution to either national wealth creation or to local job creation.
As a model, the Vadra-deal is not above suspicion. It is not even a desirable way of land transactions. It is a model that deprives village land-owners of the legitimate value of their land just because they are not smart enough like the town buddy who has several leads into the Government and who can influence decisions. Mr Gandhi is upset that the Gujarat Model is sweeping the country with a specific option available between honest capitalism as against the crony one which his brother-in-law represents.
The issue at stake is the Gujarat Model versus the Vadra Model. Do you want Governments to incentivise our own industrial giants to invest in the country, whether in Jamnagar or Jorhat, in the thick of desert at Barmer or in the hills of Kalahandi, and, thereby, kickstart a process of accelerating economic growth and job creation?
Or do you facilitate in some indirect way land changing hands through manipulation by smart men in satin suits? Incidentally, the final buyer of the Haryana land that Mr Vadra bought from farmers and sold to the DLF for huge profits did not see any business coming up there, though the State Government’s notification changing land use was specifically meant to facilitate location of business or industry to create jobs locally and add to national wealth. The Gujarat Model leads to the mills of industry rolling; the Vadra Model is simply crony capitalism in action. That takes us to a more fundamental question: What was Mr Gandhi doing in creating a model that could make industry to come and transform the skyline of many parts of the country’s hinterland?
In Kalahandi, for instance, he paraded himself as the ‘sipahi’ of the poor tribals who were being misled into believing that it was more important for them to protect the abode of their gods in the Niyamgiri hills rather than allow a huge bauxite mining and aluminum smelting industry to come up on land that has traditionally been a byword for periodic famines.
Instead of educating the poverty-stricken tribals that, for their future, they have to learn to step into modern industry and business so that the wealth from their land would be multiplied many times and their interests could be legally safeguarded through guaranteed share of the profits of industry to the community, Mr Gandhi keeps them frozen in their backyard of skin-and-bones livelihood.
In West Bengal, the very people who under Chief Minister Mamata Banerjee’s leadership forced Tata’s Nano plant out of the State, are now looking for some other industry to come up. First, under 35 years of Left rule that condemned profit-making as sin, and then under the mercurial Ms Banerjee, there are no investments coming up.Mr Gandhi, who is so eager to condemn the Gujarat Model, should have spent time more properly all these years telling his party’s Union Government to re-examine its own economic model where Indian business houses prefer to invest outside the country rather than invest inside. What makes them disfavour their own country? Has the UPA model any leg to stand upon now with corruption and incompetence eroding its credibility completely? That erosion should explain why Indian investors prefer foreign to local destinations.
Phrases like ‘policy paralysis’ were not invented by the BJP. These were taken from the 2011 January statement of leading industrialists asking the Government to wake up. The Prime Minister’s own insider man has now revealed how unable or unwilling Mr Manmohan Singh was to act to save the ship from developing holes, if not sinking itself. With Indian capital in flight, only Gujarat seemed to offer a definitive sanctuary to set up plants costing millions and work them without having to pay protection money to the party in power or its hegemonies.
When honourable men in satin suits like Mr Vadra went about buying and selling land and deal-makers like the Union Minister for Coal in the Cabinet broke rules to hand out coal mines to undeserving applicants (as per CBI charge sheet), why did the Congress vice president not intervene like he did to get the UPA out of the shameless jam over the saving of condemned politicians through an ordinance?
Maybe the Congress vice president is upset that the Gujarat Model is sweeping the country with a specific option available to the voters between honest capitalism as against the crony one which his brother-in-law seems to represent. There is naturally much apprehension among the cronies who made money in clever deals, whether in land or coal or in defence weapon buying, and their patrons in power, as the reports tell the world that the Indian voter is determined to vote in the Gujarat Model and that he wants the beneficiaries of the Vadra Model investigated.
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