Tuesday, October 21, 2014


The government nationalized three refineries owned by Esso, Burmah Shell and Caltex between 1974 and 1976. Since then, the Indian oil industry has been largely owned by the government of India and controlled by a central minister of petroleum. He gave out licences for petrol pumps, which were licences to print money; they entailed enormous opportunities for corruption and patronage. After his Congress predecessor, Satish Sharma, was caught red-handed, Ram Naik, the BJP petroleum minister, passed on licensing powers to local committees headed by retired judges. But corruption still reared its head, and the Prime Minister Vajpayee suddenly cancelled licences, including licences of pumps that were already in operation. That is what this column in Business Standard of 13 August 2002 described.


At first I was taken aback. I thought, what has happened to Atal Behari Vajpayee? Has he suddenly taken control? Woken up? Become a reformer again? Does he really care for cleanness in politics? Is he the hero we took him for on his accession to power? The temptation to believe that he was was great, for the party he heads is an antinational party with the moral standards of BSP, RJD or AIADMK. He was the great white hope in this party – until he proceeded to destroy that reputation. It seeped out rather slowly, as he kept making resounding speeches preaching reforms, tolerance and liberal values while failing consistently to convert his party. Then, suddenly in Goa he showed himself to be a loyal Swayamsevak; at that point I wrote him off.
And then, just when his entire party was vociferously defending Ram Naik, proudly declaring itself to be no worse than the Congress, the PMO suddenly cancelled all the petrol pump and gas agency allotments since 2000. He struck a blow against political nepotism. Maybe he was the man we took him for.
Actually, it is painful to admit, but I think Ram Naik is right. He claims to have cleaned up the Aegean stables of pump and agency allocations by setting up district committees headed by retired judges. The claim is true in one sense. If these committees have favoured political protégées, they were not Ram Naik’s favourites. I think they were the favourites of the local political Mafia, and the district committees were suborned by these Mafiosi. If Ram Naik made a mistake, it was to think that nepotism was all right as long as it was not his. He abdicated his power on the face of it to good men and true, but in reality to his political brothers and sisters who were individually no better than Captain Satish Sharma. The proof of this is that the committees in states ruled by the Congress have favoured the relatives and friends of Congressmen.
This is a familiar process. Bank loans are a windfall since they do not have to be repaid by those in the charmed circle; so they go to politicians or their friends. We had an aviation minister from Karnataka who took a loan of Rs 800,000 in the 1980s; since he had never repaid it, it had grown to Rs 5.2 million by the time he became minister. Foodgrains are sold to cardholders with a huge subsidy. There is no control over whom they are sold to, so there are fat profits in selling them in the open market. A licence for a fair price shop is a licence to make money just like allocation of a petrol pump. No one suspects the food minister to be making money by selling FRP licences; but the shopkeepers will be found to be favourites of various politicians – generally local ones. Political favourites – or those who can win favours by a well-placed bounty – will be found to be equally important amongst power thieves.
In the circumstances, Vajpayee’s cancellation of the allocations is melodramatic – and quixotic. It bears his stamp: it completely lacks application of the mind and awareness of how a government works. The promises of a government are not lightly given; their withdrawal can lead to a perfect legal mess.
Quite apart from the legal ramifications, there is the sheer insensitivity of the act. Many people would have already set up the pumps and the agencies, or spent money on setting them up. Some might have started the facilities. Whatever their fault, whatever their misgivings, waste of their money cannot be a part of the punishment. True, the Supreme Court has done enormous pecuniary damage to common carrier operators in the course of the conversion of their vehicles to CNG; it is causing further inconvenience right now by forcing those vehicles to queue up for CNG and block up roads. But that is the privilege of the Supreme Court; an elected Prime Minister, a representative of the people, ought to be more mindful of their interests.
Whenever they are accused of wrongdoing, Indians point a finger at other wrongdoers. If they are accused of having aided in a massacre of Muslims, their defence is that Congress did it to the Sikhs in 1983. This time they are saying, Ram Naik has done nothing that Satish Sharma did not do before him. And after locking up the pumps allotted by him for years, the Supreme Court finally allowed them to reopen without any penalty. Therefore, there is nothing wrong in law in favouring one’s protégés with petrol pumps.
This type of thinking looks pretty base and self-serving until you visit some powerful politicians. They run their own courts. Minor partymen hang around them, kowtow to them, hang on their every word, serve them hand-and-foot. When the leaders move, the hangers-on follow them in a tight clutch. Then go and look at a politician out of power, sitting all alone in the wilderness: the hordes of hangers-on have flown off to greener pastures. They flock to those in power for precisely the kinds of favours I have mentioned above. They are the bees who gather around their fragrant leaders – and the leaders reward them with honey.
Why? Because the leaders would not get into power otherwise. The followers are the people who herd voters to the booth, who ensure that they vote for the right party, that those who are inclined otherwise are shown the error of their ways. The power game is based on a compact – that when they get into power, the leaders will enrich their followers. We call ourselves a democracy, but ours is a modernized form of Indian feudalism; the mirasdars and taluqdars of the Mughal empire would find our system very familiar.
This is how it worked under the Congress as well, except for one difference. In the Congress it was still unfashionable to show off one’s wealth. Leaders wore simple clothes and led outwardly lower-middle-class lives. They might have splurged themselves abroad when no one was looking; Indian ambassadors had to be familiar with the local fleshpots to keep visiting dignitaries amused. But the Congress culture ensured that leaders did not try to emulate the rich.
The BJP has ended that. The average BJP politician does not have to look back to Gandhi; he looks up to his NRI brother and industrialist cousin. So aspirations have gone up. A petrol pump owner can in a few years hope to own a mansion, buy the best saris for his wife, fly abroad once in a while and drink to his heart’s content. While doing all that, he will remember his debt, and will be a loyal supporter and financier of the Bharatiya Janata Petrol Party.