Last week’s revelations by the former president of France will likely singe Narendra Modi simply because the Rafale debate has got refocused on the special relationship Anil Ambani may have enjoyed with the prime minister – a relationship which the opposition says enabled his company to partner Dassault at the expense of the vastly more experienced public sector firm, Hindustan Aeronautics Ltd.
So the issue is no longer about more arcane debates such as the higher pricing of the aircraft based on “India specific enhancements”. The issue really is one of rampant cronyism which Modi has had to battle for some time, especially after the “suit boot ki sarkar” jibe by Rahul Gandhi. Even then, one may recall, the prime minister had made a very defensive statement publicly when he asserted in 2015 that “my policies are for the benefit of the people. I don’t make policies for the Ambanis”.
Why should a PM be compelled to reiterate this obvious proposition? Partly because although Modi has constantly claimed he was personally clean, often describing himself as a fakir – one without earthly possessions – he still has had to vigorously battle the perception about his closeness to some big family-owned business houses from whose members he derived longer-term loyalty for perpetuating himself in power.
Undoubtedly, this is also an endemic form of political corruption which thrives in the absence of a transparent framework for political funding in India.
Consequently, it will be most instructive to find out what quantum of anonymous electoral bonds are purchased for the BJP by business houses or privately owned investment entities run by Gautam Adani, Mukesh Ambani, Anil Ambani, Ajay Piramal, the Ruias and so on.
In this context, Modi is facing another big test where he is having to counter the charge that he has a cosy relationship with big business. A parliamentary committee headed by senior BJP leader Murli Manohar Joshi has now formally demanded the infamous “Raghuram Rajan list”. Sent by the-then RBI governor Raghuram Rajan in 2015, the list names some businesses which took loans from banks and failed to repay them after fraudulently diverting the money for other purposes.
Rajan had requested the PMO for a multi agency probe because the RBI alone did not have the jurisdiction to go into any possible criminality involved in the bank funds diversion. Murli Manohar Joshi is studying this aspect very closely and has asked for documents from the PMO and other relevant ministries. Many of the businessmen believed to be on Rajan’s list are known to have proximity to the top bosses of the ruling establishment. That also explains why a multi agency probe has not been pursued so far. Even if it is pursued in some cases, it is being done in the same friendly sort of way as other probes, such as the cases of over invoicing of power equipment and coal by power companies which constitute the single largest source of bank loans gone bad – about Rs. 2.7 lakh crore.
The parliamentary committee will go into the reasons behind such lapses on the part of the government which may have caused the taxpayer massive losses. Rajan had always argued that the personal wealth of the promoters must contribute to such losses where there is fraud detected in the wrongful diversion of bank funds, as seen in the case of Mallya. There is a tendency in the Modi government to make make Mallya a poster boy of illegal diversion of bank funds and let other big fish go scot-free.
So politically-speaking, Modi faces severe moral headwinds on account of the parliamentary probe into the “Rajan List” as well as the fast unfolding events around Rafale.
On Rafale, as The Wire has noted for some time, it’s clear that Dassault and HAL had ironed out problems on co-production and that a work-share agreement had been decided upon. The video clip of Dassault CEO Eric Trappier speaking just a few weeks before the prime minister’s France visit, praising his partner HAL also does not not cast Modi in good light at all.
And what’s worse, none of the statements put out by the French government directly refute or contradict former French president François Hollande’s allegation. On Monday, all that junior foreign minister Jean-Baptiste Lemoyne said was that Hollande’s remarks “do no service to France”, an indication that the French government is more upset with Hollande having said what he did publicly and not that it believes what he said was untrue.
It is clear as daylight that Reliance Defence was foisted on Dassault. The reasons are still mystifying. At the end of the day political corruption is far more systemically and morally determined. In a governance system with a huge moral deficit, claims of personal probity have no meaning. Modi must remember this.
