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


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.

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Come April, government will be more comfortable in Rajya Sabha

Of the 100 BJP-allies MPs, 24 are retiring. Which means, the government will be left with 76 MPs

Parliament of India is a source of interest for many people because of various reasons. Wikimedia Commons
Parliament of India is a source of interest for many people because of various reasons. Wikimedia Commons
  • In April, the opposition may lose its edge over BJP in Rajya Sabha
  • NDA led by Modi has faced many embarrassments in Rajya Sabha in past few years
  • This is expected to change soon

Come April, the opposition in the Rajya Sabha may lose its edge in the numbers game and the power to stall any government bill, as the ruling BJP-led NDA coalition is set to catch up with its rivals, though a clear majority will elude them for a while more.

BJP to soon get more comfortable in  Rajya Sabha. Wikimedia commons
BJP to soon get more comfortable in Rajya Sabha. Wikimedia Commons

As 58 MPs, including three Nominated and one Independent, are set to retire in April, the Rajya Sabha math is going to change. It is set to favour the National Democratic Alliance (NDA), and the trend may continue in the elections to the Upper House later too with the Bharatiya Janata Party (BJP) having solid majorities in a number of state assemblies, especially the ones it won after the 2014 Lok Sabha polls.

With this, while the Congress-led opposition’s numbers will come down to around 115 from the present 123, the numbers of the BJP, its allies and sympathisers together would climb to around 109 from the present 100-odd members.

And the gap, once wide enough to let the opposition invariably have its say, will keep narrowing further in the coming months.

Of the 55 retiring members (excluding those Nominated), 30 belong to the opposition camp while 24 belong to the BJP and allies. Of them, a large number of NDA candidates are set to return while the opposition will lose a chunk of its members.

As things stand now, the Congress-led opposition has 123 MPs (including 54 of the Congress) in a house of 233 elected members (apart from 12 Nominated), while the NDA has 83 members (including 58 of BJP) plus four Independents who support the BJP (these include MPs Rajeev Chandrashekhar, Subhash Chandra, Sanjay Dattatraya Kakade and Amar Singh).

Rajya Sabha or the Upper House can often be a game changer while passing of the bills is in process.
Rajya Sabha or the Upper House can often be a game changer while passing of the bills is in process.

Also, for all practical purposes, the All India Dravida Munnetra Kazhagam (AIADMK), that has 13 members in the Rajya Sabha, is also with the NDA. This means the NDA’s effective strength in the upper house of Parliament is 100.

The gap was wider till just a few months ago. This meant that during any battle between the government and the opposition in the Upper House over bills and major issues, it was the opposition that invariably had its way. The recent example was the triple talaq legislation that the opposition stalled in the upper house, demanding that it be referred to a Select Committee.

For over less than four years, the Narendra Modi government had faced quite a few embarrassments in the Rajya Sabha thanks to the majority of the opposition, forcing it often to take the money bill route to avoid a clash in the house. Under the Constitution, a money bill needs to be passed only in the Lok Sabha and the Rajya Sabha cannot stall it.

Also Read: For Modi, Road To 2019 Will Be Steeper

However, after April, the NDA will be in a far better position.

Of the 100 BJP-allies MPs, 24 are retiring. Which means, the government will be left with 76 MPs (including AIADMK). But at least 30 from the NDA are set to get re-elected. So the number will rise to 106. Add three members that the government would nominate to the upper house and the final NDA tally will roughly be 109 MPs.

Further, there are fence-sitters such as the Telangana Rashtra Samiti (TRS), the Indian National Lok Dal (INLD) and the YSR Congress, which are not virulently against the BJP and would not oppose the government unless for very compelling reasons.

Now, for the Congress and the rest of the opposition, they are set to lose 30 MPs (including one Independent, A.V. Swamy) through retirement and would be left with around 93 members. The Opposition may win roughly 22 seats, which means that its final tally after April is likely to be around 115 members.

Government can now expect some smooth sailing in the Rajya Sabha, coming this April.
Government can now expect some smooth sailing in the Rajya Sabha, coming this April.

The gap has clearly narrowed and the government may not be at the mercy of the opposition during crucial votes and can have its way in the Rajya Sabha if it musters its numbers by deftly wooing “floater” MPs.

The three newly-elected Aam Aadmi Party (AAP) members may remain equidistant from both the BJP and the Congress, though the party is friendly with some of the major opposition parties like the Trinamool Congress.

Also Read: BJP MP Seeks Amendment to the Protection of Children from Sexual Offences Bill

In an interesting development recently, the AAP actively participated in the opposition’s walkout and the day-long boycott of the Rajya Sabha over long intra-day adjournments of the Upper House by Chairman M. Venkaiah Naidu.

The AAP, which was not welcome at any opposition meetings earlier, particularly those held in Parliament House, was invited to speak at a joint opposition media interaction on the day. But nobody can be sure as to how long this bonding would last.

Partywise tally of those retiring in April-May from the opposition’s side include 13 from the Congress, six from the Samajwadi Party, three of the Trinamool Congress, two each of the Nationalist Congress Party and Biju Janata Dal and one each of the CPI-M, the Bahujan Samaj Party and the Jharkhand Mukti Morcha.

NDA has to face many embarrassments in past few years in Rajya Sabha. Wikimedia Commons
NDA has to face many embarrassments in past few years in Rajya Sabha. Wikimedia Commons

From the ruling side, 17 MPs of the BJP, three of the Janata Dal United, one of the Shiv Sena and two of the Telugu Desam Party (TDP) are retiring.

In terms of state-wise vacancies to be created in April, the highest number is from Uttar Prdaesh (9), followed by Maharashtra (6), Madhya Pradesh (5), Bihar (5), Gujarat (4), Karnataka (4), West Bengal (4), Rajasthan (3), Odisha (3), Andhra Pradesh (3), Telangana (2), Uttarakhand (1), Himachal Pradesh (1) and Chhattisgarh (1). IANS