Sunday March 24, 2019
Home Opinion Acche din: Ho...

Acche din: How Gautam Adani’s fortune changed when Prime Minister Narendra Modi came into power

0
//

Modi Adani pic

By Harshmeet Singh

Gujarat. 1980s. A grey coloured Bajaj Super scooter, making rounds of the Government offices, was a common sight on the roads of Ahmedabad. While the driver, Gautam Adani, was looking for a breakthrough to make it big in life, the pillion rider, Malay Mahadevia, had the responsibility of interacting with the Government officials in fluent English. Cut to 2015. That Bajaj Super scooter owner today owns a Ferrari, a fleet of BMWs, three helicopters, three Bombardier and Beechcraft planes. And what’s more? He is considered as one of the closest aides of the country’s most powerful man – Prime Minister Narendra Modi.

For decades now, the top of the tongue examples for leading industrialists in the country have been ‘Tata, Birla & Ambani’. But in the past decade or so, this settled order has seen disruption and is taking a new shape – ‘‘Tata, Birla, Ambani & Adani’. But interestingly, while it took many decades for the other business houses to become the flag bearers of Indian industry, the Adani group managed to gain similar limelight in a relatively lesser time. All thanks to a magic wand? Or is there something else that fails to meet the eye?

Adani – Modi bonhomie

Gautam Adani’s closeness with Narendra Modi is no secret. This, perhaps, has worked in his favour. From the time Narendra Modi was declared as BJP’s Prime Ministerial candidate (13th September 2013) to even before the general elections in April – May 2014, the net market capitalization of Adani Enterprises, Adani Port and SEZ Ltd and Adani Power had risen by 85.35% to value over Rs 95,925 crore. During the same period, the jump in Sensex was 14.76%.

Having diverse interests including real estate, oil, power, gas, coal and logistics, the Adani Group is today the largest private power producer in the country. The group is also the largest private coal importer in the country and handles the largest private port in India at Mundra.

By the time Modi took over as the Chief Minister of Gujarat in 2001, the Adani Group had transformed into an infrastructure company, leaving behind its humble beginnings as an export house. Under fire after the Godhra riots and the devastating Bhuj earthquake in the state that took place soon after he assumed office, Modi tried to divert everyone’s attention by asking the industrial houses to invest in the state. While Modi’s first such call was overlooked by most of the industrialists, it was a group of Gujarati businessmen, flocking behind Gautam Adani who ensured that Modi’s idea of an industrial Gujarat didn’t become a flop. Since then, Adani-Modi duo has been inseparable.

Modi the PM – Adani’s saviour

In January last year, the Gujarat High Court declared Adani owned Mundra SEZ in Gujarat as ‘illegal’. The High Court found that the SEZ was built without attaining the requisite environmental clearances. According to the law, the central environment ministry needs to approve the project before the construction of SEZ can begin. The Supreme Court declined to change the High Court’s order but allowed the existing tenants to continue working in the SEZ.

Realizing that the closing down of the SEZ would results in heavy loss of job and infrastructure, the High Court allowed the Central Government to look into the matter and grant a belated clearance, if it finds it satisfactory. While the UPA government didn’t take a decision on the issue, the Modi Government, within a couple of months of assuming office, gave the required clearances and prepared the ground for upcoming ‘Achche din’ for Adani.

Modi’s travel companion

While Narendra Modi’s frequent foreign tours have caught the attention of everyone in the country, co-travellers during such trips have remained under the wraps. During PM’s recent trip to France, Adani was amongst the audience in the UNESCO when Modi took the stage to deliver a speech. Some sources say that Adani also interacted with Nicolas Sarkozy, the former French President. He was also spotted with the Prime Minister during his trips to Australia, Japan, Brazil and the USA. The PM’s UNGA (United Nations’ General Assembly) speech was also heard by him in person in New York.

Even when Modi undertook tours to China, Singapore and Japan as Gujarat’s chief minister, Adani was a permanent fixture with him.

The latest in the line of Adani’s blockbuster deals during Modi’s tenure was reported in China a couple of days back. Business deals worth $22 billion were signed during Modi’s China visit, a majority of which were bagged by Adani and Bharti. Through these deals, Adani group is hoping to gather finance for its upcoming power projects at the Mundra port in Gujarat.

CAG posed questions to the Gujarat Government

In July last year, the CAG came out with 5 reports highlighting the undue favours given by the Gujarat Government to business houses such as Adani Group and Reliance Petroleum in the financial year ending in March 2013 (Modi was the Gujarat CM then).

According to the report, “non-monitoring of the construction quay in phase 1 of Adani Group-owned Mundra port led to short recovery of Rs 118.12 crore.” Unsurprisingly, no action was taken on the report and it was dumped without giving much attention.

SBI’s $1 billion loan to Adani

One of the most controversial deals that the Adani Group has been a part of since Modi took over as the PM was SBI’s approval of a $1 billion line of credit for its coal mine project in Australia’s Queensland. The largest state run bank in the country faced flak from many corners after signing a Memorandum of Understanding with the Adani Group on the sidelines of the G-20 summit in Australia.

Considering that some of best known International Banks such as Goldman Sachs, Royal Bank of Scotland, Barclays and Citigroup have stayed away from the project, citing environmental reasons, SBI’s decision seems all the more surprising and fishy. But then this isn’t the first time when the public sector Banks are being pushed to risk a bad credit due to political pressure.

While the Government maintains that the Australian project would help get the much needed coal into India for power production, a number of Australian organizations are already up in arms against it due to the possible damage it would cause to the Great Barrier Reef.

According to some news reports that surfaced a couple of months back, SBI decided to reject the loan request, although SBI marked such news as ‘rumours’ and continued to say that the final decision is still pending approval from the executive committee.

There is no fault in Prime Minister Narendra Modi’s policy of pushing development in the country. But a country of over 120 crore people can’t flourish if the benefits of ‘development’ remain confined to the old and close aides of the people in power. Even if all the allegations of Modi’s friendship with Adani are false, it surely doesn’t give a positive signal when the Prime Minister is seen far more often with a particular industrial baron than with the Aam Aadmi.

Next Story

Are There Enough Jobs In Prime Minister Narendra Modi’s Led India?

“More young people are entering the labor force, millions want to leave agriculture but can’t find construction work because construction activity has slowed down because the investment rate in the economy has slowed down.”

1
VOA
Modi’s Bharatiya Janata Party dismisses concerns about the job data saying it does not capture the real picture because it focuses only on the 15 percent of Indians who work in the formal economy. Pixabay

For people streaming in from rural areas around New Delhi, the first stop is a collection of busy city intersections where contractors select daily wage labor from the crowds of young and old waiting every morning to get work.

Many standing at these intersections say they get work for barely half the month. “I have the ability to work hard. I never turn down any work. But I would prefer to get a cleaner, permanent job,” says 29-year-old Tek Chand. “The problem is one day I have money to buy rations, the next day I don’t.” Like millions of others, he migrated from his village three years ago to seek work and a better life in the city.

FILE - Indian Prime Minister Narendra Modi, center, arrives with his cabinet colleagues on the opening day of the budget session of the Indian Parliament, in New Delhi, Jan. 31, 2019.
Indian Prime Minister Narendra Modi, center, arrives with his cabinet colleagues on the opening day of the budget session of the Indian Parliament, in New Delhi, Jan. 31, 2019. VOA
As India prepares for general elections on April 11, Prime Minister Narendra Modi is being attacked by opposition parties for failing to make good on a promise he made in 2014 to create millions of jobs for India’s huge young population. Modi’s Bharatiya Janata Party rebuts that criticism and says India is generating new opportunities as it becomes one of the world’s fastest growing major economies.

Job creation is a massive challenge for a nation with one of the world’s youngest populations — half the country’s 1.3 billion people are under the age of 25.

Recent data shows that joblessness has soared to record high levels. Opposition parties have made joblessness one of their principal election planks and have accused the prime minister of failing the estimated 8 to 10 million young people who enter the workforce every year.

The independent Mumbai-based Center for Monitoring Indian Economy estimates that unemployment reached 7.2 percent last month and that 11 million jobs were lost in 2018. With a working population of 500 million, that translates into more than 30 million people waiting for jobs. An unpublished official survey that showed unemployment at a 45-year-high has also been widely quoted by Indian media.

India's main opposition Congress party President Rahul Gandhi speaks during a public meeting at Adalaj in Gandhinagar, India, March 12, 2019.
India’s main opposition Congress party President Rahul Gandhi speaks during a public meeting at Adalaj in Gandhinagar, India, March 12, 2019. VOA

On the campaign trail, the head of the main opposition Congress Party, Rahul Gandhi, who is seen as Modi’s principal challenger, talks repeatedly about a “jobs crisis.”

“Our government is refusing to accept that we have a massive crisis and potential disaster in front of us,” Gandhi told a group of university students in New Delhi recently, many who will be first time voters.

Modi’s Bharatiya Janata Party dismisses concerns about the job data saying it does not capture the real picture because it focuses only on the 15 percent of Indians who work in the formal economy. It points to a recent industry report that jobs have been created in the medium and small sectors.

The BJP says millions of people have found work in the transport and infrastructure sectors or as delivery boys in booming online businesses as India becomes one of the world’s fastest growing major economies. They point out that the issue is not jobs but livelihoods, and point to millions of people who are not counted in job data.

They are self-employed people like cab owner Chain Pal Singh. As the app based taxi business boomed, Singh’s friend, who operated a cab, persuaded him to quit his job and take out a loan to buy a car. His decision has paid off — in four years he has earned enough money to invest in two more cabs.

Singh says he is much better off than when he held a job. “I used to earn about $225 dollars a month. Now in some months I can earn almost double that amount. Its beneficial for me.”

Following defeats in key state elections in December, Prime Minister Narendra Modi told parliament last month, “This truth has to be acknowledged. The unorganized sector has 80 to 85 percent of the employment.” He pointed to millions of commercial vehicles sold in recent years and questioned if they had not generated jobs for drivers.

Economists admit India’s large informal sector has made it difficult to calculate employment, but they say joblessness or underemployment remains the country’s biggest challenge. While scarcity of jobs is not a new problem, two disruptive economic steps in the last two years exacerbated the problem.

In 2016 a sweeping currency ban meant to tackle the problem of illegal cash, dried up jobs as it created huge currency shortages, particularly in small businesses and in the countryside. A poorly-implemented tax reform known as the Goods and Services Tax a few months later was another blow to businesses.

Meanwhile, Modi’s “Made in India” campaign, which aimed at making India a manufacturing hub like China, has made a slow start and sluggish labor-intensive sectors cannot cater to growing numbers of job seekers.

“We can’t keep patting ourselves on the back that we are the fastest growing economy specially if all these other indicators are not growing at a rate that will absorb the growing labor force,” says Santosh Mehrotra, a human development economist at the Jawaharlal Nehru University in New Delhi.

“More young people are entering the labor force, millions want to leave agriculture but can’t find construction work because construction activity has slowed down because the investment rate in the economy has slowed down.”

Also Read: The Mental Health ‘Epidemic’: About Six in Ten Teen Say, They Feel A Lot Of Pressure To Get Good Grades

He points out that exports, another sector that created a number of jobs has also not been performing well.

As the campaign heats up, the opposition will try to keep the spotlight on jobs, or lack of them, even as the BJP tries to focus on national security following a recent confrontation with Pakistan. The final verdict on whether to give Prime Minister Modi a second term in office will be delivered by millions of voters when they cast their ballots. (VOA)

One response to “Are There Enough Jobs In Prime Minister Narendra Modi’s Led India?”

  1. If the employment picture is bleak despite the construction of so many more Kilometers of roads, railways, air ports, bridges, toilets and other infrastructures compared to the five or even ten years of UPA government, imagine where we would be if we had UPA III government .