Cronyism Ki Jai; Hail the Nexus

By Tukoji R. Pandit

The man in the eye of a storm

The man in the eye of a storm

The hullaballoo over Vijay Mallya, the billionaire ‘King of Good Times’, resembles the script for a stand-up comedy show on TV. It is like the police allowing a criminal to escape on a motorbike well before starting the drama of chasing him on foot and then indulging in self-praise for their efforts to nab him. After letting Mallya fly out to London with a virtually plane-load of luggage on March 2, the government has now enacted another farce. The ‘diplomatic passport’ of Mallya, a member of the Rajya Sabha, was ‘suspended’ on April 15 for four weeks! The threat that the passport can be revoked later only accentuates the drama.

It makes as much sense as the caveat that Mallya has been given a four week time to explain why his passport should not be impounded. Before that he has to appear before the Indian High Commissioner ‘within a week’. Does anyone in India really believe that the government has dealt the final blow to Mallya’s efforts to stay out of reach of the Indian tax and law enforcing agencies? Or, that a decisive step has been taken to recover the Rs 9000 crore that he reportedly owes to banks in India?

About a year ago, the country had witnessed an episode that bears a striking resemblance to the current Mallya saga. Lalit Modi, credited with the birth of the world’s most lucrative limited overs IPL tournament in India, had figured in the news because he had reportedly managed to dodge the Indian tax authorities and had been staying in the UK without a valid Indian passport and still faced no threat of being sent back to India.

Yet, from his pad in the UK Modi was able to travel anywhere in the world (except India, of course) on the strength of ‘travel documents’ issued to him by the government of Her Majesty. There was some political upheaval in India when it was alleged that two powerful figures of the ruling BJP, the chief minister of Rajasthan, Vasundhara Raje, and external affairs minister, Sushma Swaraj, did their ‘humanitarian’ bit in making it possible for Modi to stay on in the UK.

  • An ‘advantage’ that Lalit enjoyed was his alleged proximity to some of the top BJP leaders. But Mallya is hardly handicapped on this score.

The government that had been voted to power with a massive mandate, obtained on the basis of its promise to end cronyism and other forms of corruption, dismissed with disdain the allegations against two of its prominent leaders and managed to effectively close the debate on the subject. Lalit Modi stays on in the UK happily and even tries his hand—successfully, it would appear—at proxy control of one of the cricket units in the country. One hears very little about the efforts to bring him back; perhaps we will soon be told that he is as clean as the Ganga. Never mind that actually the Ganga is so dirty that successive government have not been able to clean it even after spending crores of taxpayers’ money since the mid-1980s.

The UK government had found no reason to pack Lalit Modi off to his native land; he had apparently committed no crime in the UK. So, what ‘crime’ has Mallya committed in the UK that may force the hands of his present hosts to hand him over to Indian authorities?

An ‘advantage’ that Lalit enjoyed was his alleged proximity to some of the top BJP leaders. But Mallya is hardly handicapped on this score. He was, as far as one can recall, elected a Rajya Sabha member from his native Karnataka supported by nearly all major political parties. Even if one has got his political alliances wrong, can it be believed that a man like Mallya will have no ‘cronies’ in all major political parties?

Assuming that somehow Mallya is brought back to India to stand trial on charges like money laundering and failure to return the Rs 9000 crore debt to Indian banks will any ‘big fish’, be it a politician or an official, be caught for helping him fly out of trouble from India?

For most people it is important to see Mallya or anyone who is accused of a serious crime or fraud being punished by a court of law. His escape is viewed as a typical example of how ‘cronyism’ works in India—an unholy alliance among the rich and he influential of the land. Economists say this kind of cronyism is bad for the country. What seems to matter is what is good for a few privileged individuals.

A jail term alone for a ‘fugitive’ or whatever does not satisfy the people who are affected by the maleficence of the rich and powerful. The Sahara boss is perhaps a rare member of the rich class who has been made to cool his heels in a prison cell. One is inclined to blame it largely on his misplaced trust on some shifty political friends of his. But whatever the reason, many of those whose savings were washed away are yet to recover their money in full even after court’s intervention.

In an attempt to wriggle out of his troubles, Mallya had reportedly offered to pay Rs 4000 crore upfront and the rest later. The banks, who had obviously loaned him money received from their depositors, refused his offer. Perhaps it was a ruse or perhaps the Mallya offer was genuine; one can’t say.

The question is more fundamental. How come that repeatedly we hear about the rich getting away by defaulting payment of several thousand crores of rupees that the bank advance them so effortlessly? The same banks will do all manner of ‘due diligence’ when advancing much smaller—paltry in comparison- loans to ordinary people and then send their ‘goons’ to recover the due in case of default or delay in returning the money.

Among the poorer sections the farmer suffers the most because his capacity to return the loan is entirely dependent on his crops. Failure of the crops means no income and many attendant miseries. The banks accept no ‘excuse’. It has been reported that most cases of the farmers’ suicide are related to their inability to repay the loans. They do not have the option of flying out of the country, much less ‘cronies’ in high places