Big business

Business & politics

Print edition : September 30, 2016

Prime Minister Narendra Modi is welcomed by Reliance Foundation Chairperson Nita Ambani and Mukesh Ambani on his arrival for the rededication and inauguration of the Sir H.N. Reliance Foundation Hospital in Mumbai in October 2014.

Modi with the industrialist Gautam Adani. A file photograph. Photo: PTI

The Prime Minister’s endorsement of the Ambani group’s new digital product ends speculation of the supposed distancing between Narendra Modi and Reliance and caps Modi’s long track record of corporate friendliness.

“Narendra Modi is among those political leaders who are unambiguously and aggressively corporate-friendly, but this must rank as the ultimate pro-corporate gesture even by his own phenomenal track record in this respect.” This remark was made by a senior Sangh Parivar activist when his response was sought on the Prime Minister’s presence in the promotional campaign for Reliance Industries’ new telecom network, Jio Digital Life. The senior activist, who had worked closely with Dattopant Thengadi, the late Bharatiya Mazdoor Sangh (BMS) leader who was also among the top leaders of the Rashtriya Swayamsewak Sangh (RSS), recalled the veteran leader’s vociferous criticism of neoliberal policies in the 1998-2004 period, when Atal Bihari Vajpayee’s National Democratic Alliance (NDA) government was in power. He pointed out, too, that such criticism was not possible under the Modi regime.

“There is indeed an understanding that the natural impact of the Modi imprint on the politics of the BJP [Bharatiya Janata Party] and perhaps on the Sangh Parivar as a whole is to restrain criticism of corporate bigwigs and their neoliberal pursuits. We saw this clearly right from July 2014, barely a month after he took over as Prime Minister. The early signals of this were visible in the heavily corporate-supported advancement of Modi’s Lok Sabha election campaign. Even so, it was unimaginable that this would reach the level seen in the Jio advertisement—a sort of personal endorsement of a private corporate entity, that, too, using a constitutional office,” the activist said.

The activist, however, did not expect open questioning of this from any organisation or group or individual in the Sangh Parivar: “There could be understated voices of dissent, like mine, within the Sangh Parivar and in private conversations. But I cannot see anyone opposing this publicly. Thengadiji used to launch sharp attacks during the Vajpayee regime against aberrations that were much less grave than this.”

There are more eloquent echoes of this viewpoint outside the Sangh Parivar, among political organisations and activists and also among observers. The appearance of the advertisement featuring Modi’s picture unleashed a virtual flood of sarcastic and vituperative responses in the public space, particularly on social media. Broadly, these responses harped on Modi’s corporate-friendly, approach right from 2002 when he first assumed the role of an administrator as the Chief Minister of Gujarat and the continuation of this proclivity over the 28 months that he has been Prime Minister, with the Jio Digital Life advertisement coming as the crowning touch.

Quashes distancing speculation

The advertisement was, in fact, perceived as a watershed moment in Modi’s long track record of corporate-friendliness. The way in which it turned the Prime Minister into a sort of brand ambassador for a privately owned corporate’s new digital product was unprecedented. In fact, the promotion campaign, perhaps employing characteristic advertisement hyperbole, stated: “In the journey of time, there come a few life-changing movements. Our honourable Prime Minister’s inspiring vision of a Digital India is one such movement. Jio is dedicated to realising our Prime Minister’s Digital India vision for 1.2 billion Indians …”

A variety of factors relating to the overall balance of power in the corporate and industrial arena and the fact that Mukesh Ambani and his associates are the primary promoters of Jio Digital Life add to the exceptionality of the advertisement. At a different level, this watershed moment also marks the continuation of Modi’s association with the Ambanis, one of his most favourite corporate giants. This reaffirmation of the association has a unique value since sections of the corporate world, bureaucracy and business media had talked over the past year and a half about a distancing between the Prime Minister and the Reliance group. The perception was that the distancing took place in late 2014 or early 2015. Among developments cited to support this theory was the conflict between the Petroleum Ministry led by Dharmendra Pradhan and Reliance on a number of issues. The most contentious among these were the international arbitration in London over Western offshore fields and investigative agencies filing criminal charges against a senior Reliance official in a corporate espionage case. The latter case, apparently, was particularly irksome to the Ambanis because personnel of the Adani group were also involved in similar espionage but were not caught.

Over and above all this, Gautam Adani, the owner of the Adani group, was visibly more proximate to the Prime Minister. Gautam Adani accompanied Modi on almost every foreign trip and had greater access to the Prime Minister’s Office and residence than the Ambanis. Modi’s own statement in early April 2015 that “laws can’t be different for Reliance Industries’ chairman Mukesh Ambani and for the common man” were perceived to be the clearest sign of the divide.

Two principal reasons were cited by the “divide theorists”. They held that Adani had been of greater help to Modi in the 2014 Lok Sabha election campaign than the Ambanis. While the Ambanis had apportioned a higher quantum of support in terms of finance and other resources to Modi in that election, the group also helped other parties like the Congress and the Nationalist Congress Party substantially. However, the Adani group completely ignored political players other than the BJP. The Prime Minister apparently took note of this. Secondly, they speculated, Modi did not like the way in which the Ambanis tried to make up with the Aam Aadmi Party in the run-up to the February 2015 Assembly elections in Delhi.

With the Jio Digital Life advertisement featuring Modi, however, all such speculation has evidently collapsed. A senior corporate player with good connections to the Ambanis and the Adanis and the top leadership of the BJP said: “The quid pro quo relationship that exists between most of the political parties and corporates is one that is primarily based on materialistic parameters. The parties look at raising and enhancing resources, including funds, while the corporates aim at drawing out an administrative or legal favour or largesse. This equation is most prominently visible in the relationship between dominant sections of the Congress leadership, particularly those who held ministerial positions, and the corporates. However, Narendra Modi decides his equations with prominent corporate bigwigs not just on these terms. Of course, he has his favourites whom he promotes, as is evident from the experience of both the Ambanis and the Adanis during his tenure as Chief Minister in Gujarat. During that 14-year-period both the giants benefited immensely from Modi's largesse. However, even that was not merely on the basis of run-of-the-mill considerations that exist in this sphere. All through, Modi’s primary parameter has remained political, and it continues to be so. When you say political, it is again not just about realpolitik gains. The future potential of a corporate player in the advancement of political or administrative goals would also be significant.

“Currently, Modi understands that support from a solid digital infrastructure is central to the advancement of many of his pet governance projects like Make in India. Thus, when the contours of Ambani’s Jio Digital Life started emerging concretely, the Prime Minister must have realised that such an important infrastructure vehicle should not be bypassed. Particularly because what Jio Digital Life was offering was end-to-end digital platter starting from broadband connectivity to handset production to telephony applications to media content. Thus, while it might be true that Modi had some misgivings about the Ambanis as conjectured by the “divide theorists” and had initiated some measures in late 2014 and early 2015 that worked against them, he was not going to keep on in that manner for all time to come. The launch of Jio Digital Life thus marks a reaffirmation of Modi’s Ambani association. As for the Ambanis, they too can take the misgivings in their stride. They would have seen the measures initiated against them as minor pinpricks. After all, what do small penalties and corporate espionage charges matter for a giant that has made profits running into thousands of crores of rupees year after year, quarter after quarter?”

There are many takers for this line of reasoning among corporates and politicians. A large number of corporate players that Frontline interacted with pointed out that the move of Reliance to Jio Digital Life marks a definitive shift in focus from petroleum to digital infocomm. A businessman-turned-politician who is active in one of the regional parties from eastern India said: “This, too, is a path-breaking move, one that has comprehensively taken into account the long-term limitations of sustaining the petroleum industry and at the same time captured the medium- and long-term possibilities and potentialities in the digital infocomm area. The company’s time-tested techniques in promoting their own interests using every possible means, fair, foul and ugly, have already come into play here too, and will continue to hold sway in the days to come. This business potential and staying potential are also factors that a politician like Modi would not want to bypass.”

Thus, the launch of Jio Digital Life marks the reconfirmation of the close association between Modi and the Ambanis, that too with added strengths and benefits. Mukesh Ambani could well repeat his famous words at the Vibrant Gujarat Summit of 2013, which placed Reliance first as a Gujarati company, then as an Indian company, and finally as a global company. Mukesh Ambani had asserted that this was how the company was conceived by his father, Dhirubhai Ambani.

Of course, the Adanis will also continue to wield equal or more influence in their own chosen fields. By all indications, both groups will target near-monopoly in their chosen fields, though they may have “friendly competition” in certain areas.

Under Modi’s chief ministership in Gujarat, while the Adanis and the Ambanis got the largest share of government largesse, other corporate players were also substantially supported. The more prominent among them include the Tatas, Essar and the Rahejas. Tata Motors Ltd was allotted 1,100 acres (one acre is 0.4 hectare) to set up the Nano car plant near Sanand at Rs.900 a square metre while the market rate was around Rs.10,000 a square metre. In other words, the Gujarat government under Modi granted the Tatas benefits to the tune of Rs.33,000 crore.

The Raheja group was allotted 3,76,561 square metres of land at Rs.470 a square metre. At the same time, the South-West Air Command under the Defence Ministry was asked to pay Rs.1,100 a square metre for 4,04,700 square metres. Essar was allotted 2.08 lakh square metres of land to set up a steel plant. This ran into controversies as part of the land was forested and so could not be distributed for commercial activity, according to Supreme Court guidelines.

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