People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 46

November 15, 2009




Perversion of Business in Politics


Prakash Karat


THE recent crisis in the BJP government in Karnataka was focussed on whether B S Yeddyurappa will remain as the chief minister or will the rebels get their way, or whether the BJP central leadership would succeed in affecting a compromise.




But the real significance of this crisis lies elsewhere. The events in Karnataka have shown up the brazen nexus between politics and big business that the BJP has forged in that state. This was taken to a new dimension with the BJP incorporating the Bellary mining syndicate run by the Reddy brothers into the government. After riding on the shoulders of this most rapacious business combine and making them part of the government, the BJP is now faced with this lobby's ambitions extended to dictating policies in the government and blackmailing the party.

The BJP has only itself to blame for its predicament. After the last assembly elections in 2008, the BJP emerged as the largest single party but short of a majority. The BJP election success was partly due to the intervention of the Bellary mine owners who ensured victory for the BJP candidates in four districts. It was the Reddy brothers who ensured the support of five independents for the government. They were handsomely rewarded. Three from the Bellary syndicate became ministers --- two of the Reddy brothers and one close associate. The revenue, tourism and health portfolios were given to them. The BJP did not stop at that. In order to consolidate its precarious majority in the assembly with the funds provided by the Reddy brothers, it undertook an operation to organise defections of Congress and JD(S) MLAs who submitted their resignations from the assembly. This ensured that the BJP had a clear majority in the assembly.

The rise of the mining business of the Reddy brothers is a saga of crony capitalism and the close nexus established with politicians and pliant bureaucrats. Taking advantage of the boom in the international iron ore prices due to the huge demand for it in China, the price of a tonne of iron ore shot up from Rs 200 to Rs 2000. By bending laws, getting new regulations and enactments to favour them and by blatant violation of forest and environmental rules, the Reddy brothers became a major beneficiary of the Rs 4,000 crore annual profits being reaped through the export of iron ore. This plunder, connived with by the state, saw the government getting a royalty of only Rs 27 per tonne when the price it was being sold at was Rs 2000. In 2005-06 alone, 35 mine owners got Rs 3,600 crore in profit.

It is this ill-gotten wealth and assets which the Reddy brothers deployed effectively for the BJP. The Reddy brothers have not been shy of flaunting their wealth and influence. One of them is reported to have said during a heated exchange in the assembly last year: "People  say we are worth Rs 100 crore. I want to correct it�. we are worth Rs 1,000 crore." Having suborned various bureaucrats and police officials in their climb up to big business, the mining lobby has contributed a potent edge to the BJP-RSS combine's communal politics in Karnataka.




The BJP in Karnataka is now in danger of being devoured by the rapacious business combine who they nurtured and inducted into the government. Already within the one and a half years span of the BJP government, the Reddy brothers have extracted big concessions and got criminal cases against them withdrawn. They are now utilising the division within the BJP leadership in the state to extract a bigger price. One of the terms for the compromise is that posting of officials in Bellary district will be done in consultation with the mine barons.

The BJP's mix of business and politics is part of the overall disease which is now spreading in the political system in the country. Illegal money is accumulated by ruling class politicians through crony capitalism and public policy is hijacked for private interests. The symbiosis of capitalists and politicians has reached a new level under neo-liberalism and the direct impact of the politician-business nexus is now affecting the political system as never before.

While the Reddy brothers are a key factor in the BJP in Karnataka, across the border where a similar businessman-politician nexus has developed, they have joint interests with the most influential Congress family in Andhra Pradesh. In 2005, a company set up by the Reddys was given 400 acres by the Rajasekhara Reddy government on lease for mining iron ore in Anantapur district. The son of the late chief minister, Jaganmohan Reddy, is reported to have interests in the Brahmini steel project in Kadapa. The business empire of Jaganmohan Reddy has been rapidly expanding. His aspiration to become the chief minister and the lobbies promoting his interests are another graphic example of the intertwining of business and politics and of crony capitalism.




The pollution of the political system and the perversion of democracy should be a matter of serious concern for the citizens of the country. Promoting the interests of the super-rich by illegal means and making state policy for their benefit through legal methods have become the norm under the Congress-led UPA government. The BJP did everything to promote such a nexus when it was in power earlier. The Congress had perpetrated the Koda government in Jharkhand while the BJP has gone one step ahead in converting the Karnataka government into a playground for predatory mine owners.

The reflection of this invasion of business into politics is seen in the unprecedented use of money in elections. Bellary is known for the Rs 1000 notes distributed to voters, the same practice takes place in Congress ruled Andhra Pradesh and in Tamilnadu where the denominations range from Rs 500 to Rs 1000 per voter.

The symptoms of the rot is manifested in all sectors of public life. In the corporate media, making money during elections by providing packages to candidates and parties for news coverage is widespread. Increasingly in legislatures and parliament, representatives are being elected from big business, liaison men and contractors. Business tycoons sit in parliamentary committees that decide on policies. There are ministers in the union cabinet and state cabinets who are actual businessmen by profession.

Politics as business and business through politics is becoming the norm. This assault on democracy needs to be checked. Money power cannot be allowed to subvert the democratic system. If this merger of private interests and public policy making continues, it will spell the perversion of politics and democracy. All democratic forces and concerned citizens should act to halt this process. There have to be fresh norms and rules to be enforced. The Left parties are better placed to initiate this struggle as they are not involved in the politics of business.