How bad governance is good business in Punjab
Neelam Gupta | February 25, 2016
Deepak Dhaba is a popular eatery on the Barnala-Sangrur highway. Truckers, drivers and passengers break their journey here for a tasty Punjabi meal. One day, the regulars to the place were told that its ownership had changed hands. Now, visitors talk in hushed tones about its new albeit unconfirmed owner, Sukhbir Singh Badal, Punjab’s deputy chief minister and son of octogenarian chief minister Parkash Singh Badal.
The story, part of the folklore about the Badals, is gaining currency in the state. For people, the Badals’ reputation for grab-any-flourishing-business-that-you-see is akin to J Jayalalithaa’s alleged penchant for buying or grabbing prime properties across Tamil Nadu once upon a time. However, Congress leader Sunil Jakhar swears by the Deepak Dhaba story. “I raised this issue in the assembly too. The Badal family has a mafia to execute such petty takeovers,” he told Governance Now.
READ | [The Badals] have destroyed the state of Punjab: Amarinder Singh
Almost a decade of power has seen the father-son duo and their extended family expand and consolidate their businesses. Their assets have soared manifold even as the state stands deep in debt – virtually broke. Its coffers are empty to the extent that the coalition government of the Shiromani Akali Dal (SAD) and Bharatiya Janata Party (BJP) had to pledge widow ashrams and jail premises to raise funds for financial exigencies.
September last year saw people’s simmering anger, against the Badals, snowball into a state-wide agitation. Farmers, state government employees, religious leaders, villagers and even city dwellers – all came out on streets, for a variety of reasons. Cotton crop had failed because of spurious insecticides supplied by the state government agencies. The Akali Dal had misused Shiromani Gurdwara Prabandhak Committee (SGPC, Sikhism’s apex body) for political gains. The trigger for the SGPC revolt was an engineered pardon of ‘godman’ Ram Rahim. The killing of two youths in a village in Faridkot by police and desecration of the Granth Sahib kept the agitation alive.
Also, for the first time since 1984, pro-Khalistan slogans were echoing in Punjab; banners demanding the utopian Sikh land were strewn across many roads. Chaos prevailed for over a month. The ‘panthic’, or religious, bodies and Khalistan supporters who had been lying low for decades were out for a kill. Suddenly a big drama was unfolding in the SGPC as 15 members resigned creating a crisis that necessitated a sarbat khalsa, a grand meet of all panthic bodies. It was lost on nobody that panthic bodies were turning against the Badals and the Akalis.
The government was shaken by the protests. No top functionary of the government or the party dared to talk to the agitators. In Bathinda, when a minister from the Akali Dal tried to show solidarity with agitating farmers and join their rally, he was chased away by the people. Leaders and bureaucrats feared backlash and refrained from venturing out of offices and homes. In the process, the state government could not celebrate Punjab Divas, the state’s foundation day, on November 1. Sukhbir spent that day in Rohtak of neighbouring Haryana, addressing a rally of Om Prakash Chautala’s Indian National Lok Dal (INLD) party.
This turn of events sent alarm bells ringing in the SAD. Despite poor health, Parkash Singh Badal, 88, had to come out on the roads to reclaim public support through ‘Sadbhavana’ rallies.
The turmoil and public discontent had been growing with the economic downslide, closure of businesses coupled with the reports of growing wealth of the Badals and their extended family since 2007. And yet, the Akali Dal’s local leaders were free to bully common people without worrying about police action, according to a cross-section of people I spoke with.
The Badals had started consolidating their businesses as soon they came to power in 2007. The re-election in 2012 made them believe they were invincible and indispensable. They behaved arrogantly and started treating the state like their fiefdom. Today, about 20 portfolios in the state cabinet are divided among four members of the CM’s family itself (see box). They often tweak rules and use government machinery to consolidate the clan’s business empire, if the allegations of opposition leaders and many commoners are true. [I could not independently verify the allegations. Also, my repeated attempts to speak to Sukhbir, government representative or a party leader were not successful.]
Here is an example of the ways of the Badals that many people spoke about. The time table of long-distance passenger buses is fixed in such a way that it helps the private buses operated by Sukhbir’s firms carry maximum passengers at the expense of the state-run buses. No wonder the Punjab Roadways has been in the red, and its fleet strength down from 1,908 to 1,662 (2013-14). The Badals’ transport empire, which began with one bus, has 265 passenger buses and 62 ‘luxury’ coaches. It is difficult to fathom the logic behind the fact that luxury buses, and not ordinary ones, are granted favoured treatment in taxes. Tax on ordinary buses was revised to Rs 2.25 per km from Rs 2.60 while on AC buses it was brought down from Rs 7.5 per km to just Rs 1. The justification: let more people travel in AC and luxury buses.
When a public interest litigation (PIL) reached the Punjab and Haryana high court in September last year, the state’s transport commissioner said in an affidavit that Orbit Aviation, Taj Travels and Dabwali Transport – all substantially owned by the Badals – were given 116 route permits, fewer than their actual fleet of 163 buses. Considering that the state transport policy allows an extra bus for every 10 permits, the Badals’ fleet still has 36 buses running illegally in the state they rule.
Master Mohan Lal, a BJP leader and former transport minister, says, “As minister, I observed that buses owned by private companies were causing huge losses to the Punjab Roadways through clever methods. The private operators were running their buses on the same route as the government-owned buses but a few minutes prior to their schedule. As a result, while private buses get a ‘house-full’, the government-run buses are empty. Besides, private operators run four to five buses on a single permit.” He admitted he could do nothing to change things.
Business interests are often not limited to business alone. The unwritten rule in Punjab, many people told me, is that police will not register an FIR against the driver of a Badal bus even in case of a serious crime. There was a furore when a 13-year-old girl died after she was molested inside a bus owned by Orbit Aviation and thrown out in Moga in April-May last year. Though police did act after a media campaign, the victim’s father recently turned hostile in court.
A farmer I met in Rama Mandi, Bathinda, narrated his travails. After he met with an accident, “police would turn me away every time I went to register my FIR. At times, I have even seen the culprits sitting with cops and drinking.” The mohalla in-charge activists of SAD are generally staunch Badal loyalists, and they are entrusted with the responsibility of raising funds from all and sundry – from petty contractors to big businesses. People say that every ‘prabhari’ (in-charge) is asked to raise a fixed sum to be paid to the party every month. Against this, they are given unbridled powers including freedom to bully and intimidate common people.
The allegations of this nature come not only from the opposition and some commoners but also from the allies. BJP MLA Navjot Kaur Sidhu, wife of former MP and cricketer Navjot Singh Sidhu, has also alleged publicly several times over that mohalla committee leaders of SAD are all powerful, and police listen only to them and not the victims – or even her. BJP leaders are not happy with the way Sukhbir treats them. Madan Mohan Mittal, the industry minister, was kept at bay during the Progressive Punjab Investors Summit in October, where Sukhbir hogged the limelight.
Sukhbir’s cousin Manpreet Singh Badal, who has fallen out with the family, told me that SAD leaders beat up party rebels and also those who dare to question their ways; false cases are lodged against them. Once a finance minister in the Badal government, he is now with the opposition Congress.
The government gives all contracts – for selling liquor, moving sand gravel, doing construction works and so on – to SAD supporters, and others have been eased out of cartels. I travelled across Punjab in buses and trains and also walked through streets in many cities and villages meeting common people. Listening to them, I found they all had a common refrain: “Business to ab ek hi bande ke paas hai – Badal. Jab woh yahan hai to kisi ko business nahin mil sakta (Business is now in the hands of only one person – Badal. When he is around nobody else can do business).” Congress leader PS Bajwa alleges, “If the Badals see anyone else prospering, there is a great possibility that within days his business will become theirs.”
In December, two dalit workers’ limbs were chopped off at a farm owned by SAD leader Shiv Lal Doda of Abohar, who is also a liquor baron. One of them, Bheem Taank, died of injuries. In spite of widespread protests, police action was much delayed, and Doda was forced to surrender only a month later.
The Badals, whose family name derives from that of their ancestral village, have humble origins. Parkash Singh Badal was the first from the family to take to politics when he contested elections in 1957. In Gidderbaha town of Bathinda, many point to a house where a young Parkash Singh Badal used to hold meetings to chalk out strategy for that election. A member of a Gidderbaha family close to the ruling clan told me that the Badals were middle-income farmers in those days, before they ventured into transport business with one bus.
Significantly, this business has grown manifold after 2007. Till then the Badal family had two business entities: Dabwali Transport Company and Orbit Transports. By 2012, the family owned six companies, with permits to operate in three-fourths of the state area. The growth was fuelled by a new transport policy for Punjab, declared soon after the Badals came to power, throwing the service open to the private sector. After a court ban on new permits, the Badal firms took to buying out existing permits from others – not always ethically, according to some people. Many allege that these companies have flouted rules with aplomb; running buses on many routes without permit.
Orbit’s revenue was Rs 62 crore (2013-14) while the total revenue and profit after tax of Dabwali Transport were Rs 51.5 crore and Rs 10.5 crore, respectively (2012-13), according to various reports. Dabwali’s profit after tax was a mere Rs 1.17 crore the preceding year. In the meanwhile the state-run corporation had suffered a staggering Rs 365 crore accumulated losses.
Orbit Aviation owns a fleet of planes and helicopters. This company was set up by Sukhbir Badal’s father-in-law Satyajit Singh Majithia in 2007, three months after the SAD-BJP came to power. In 2010, Sukhbir’s Orbit Transport Company was merged with it. In 2012, another of his firms, Orbit Resorts Private Limited, purchased most of its shares and took control of the company.
Orbit Resorts is owned by Sukhbir’s wife Harsimrat Kaur, who is union cabinet minister for food processing. It was founded in 1988 with Sukhbir as its director. A resort was set up on a 17-acre industrial plot in Gurgoan in 1989. The land was allotted to Parkash Singh Badal by Om Prakash Chautala. The CAG later pointed out that this deal had meant a loss of about Rs 600 crore to the exchequer. In spite of legal hurdles, Chautala, who is now serving a jail term for corruption, cleared the land allotment in 2002. The Badal family came to power in 2007 and the same year the work on this resort started. Within four years, the project was completed – it is called Maurya Hotel today.
Orbit Resorts was worth Rs 726 crore in 2013, according to an Economic Times report. Today, it is building another eco resort at Mullanpur, 20 km from Chandigarh. Sukhbir is in charge of urban development, among other portfolios, and it is no surprise that Mullanpur is developing faster than other suburban towns.
Sukhbir set up a media venture in 2008, G-Next Media Limited, which then launched three TV channels – PTC News, PTC Punjabi and PTC ChakDe. These channels have received government advertisements far beyond what their actual reach would justify, industry circles say. In a deal with a TV channel called ETC Punjabi, PTC Punjabi bought the rights to telecast live Gurbani from the Golden Temple. This gave PTC Punjabi an instant access to a large audience. Eventually ETC Punjabi was closed down and its employees were shifted to the new company. When the deal was signed, Harsimrat Kaur’s brother Bikram Singh Majithia was a cabinet minister in charge of information and public relations.
In 2009, Sukhbir himself took over this crucial department and it further blurred the line between his private business and the government. PTC News became a promotional channel for the government. Gradually Badal saw to it that anti-establishment news was obliterated from all TV channels. To hoodwink public opinion, the company launched Fastway Cable Network, which runs more than 200 cable channels, often disrupting the transmission of other channels.
Kanwar Sandhu, managing editor of the now defunct Day and Night TV news channel, told me that his channel faced harassment after it had highlighted the allegations of then finance minister Manpreet against the Badals in 2010. He said his channel’s transmission was brazenly disrupted by the cable operator run by the Badals. The government advertisements were issued to the cable channels in clear contravention of rules.
Harsimrat Kaur’s father and brother are partners in Orbit Aviation and other companies directly or indirectly owned by Sukhbir. One of them, for example, deals in electric equipment, and has cornered all contracts of setting up substations across Punjab since 2008. It was awarded a contract for setting up four power stations for Rs 150 crore in 2008. The projects have been hanging fire. These power plants were supposed to generate electricity from the waste of sugar mills. The contract was allotted as a part of the plan to revive the sick sugar mills.
However, I learnt from reliable sources that the mills allocated to these projects were not sick but profit-making. Interestingly, the department of non-conventional energy resources is with Majithia.
Parkash Singh Badal’s daughter Parneet Kaur is married to the son of the state’s first chief minister Pratap Singh Kairon. The Kairon family owns Shivalik Telecom Limited, Shivalik Agro Chemicals Limited, Shivalik Farm Chemicals Limited and Shivalik Electric Equipment Company Private limited – all doing good business with the state’s agriculture and electric departments.
During the 2009 Lok Sabha elections, Harsimrat Kaur had declared her assets at Rs 60 crore (see box). Contesting the 2014 elections, she declared her assets at Rs 108 crore (of which Rs 96.14 crore belonged to her husband). In other words, in five years her joint assets went up by Rs 48 crore – on record. As for Sukhbir Badal, he had declared assets worth Rs 13.38 crore during the 2004 Lok Sabha elections. One has to wait for the 2017 election affidavits to figure out his assets at the end of the decade’s rule.
His estranged cousin Manpreet says, “Sukhbir justifies his growing assets by claiming he does his business well. But how come his assets have grown only after he came to power and not when he was out of it? The fact is that this money has come to Sukhbir only after his father won elections in 2007; it’s loot from the state exchequer.”
One could dismiss Manpreet’s ranting as one from a disgruntled relative. However, the figures support his allegations. Punjab’s debt has burgeoned from Rs70,000 crore in 2007 to upwards of Rs 1,25,000 crore today. The state’s coffers are empty and many employees have not received salaries for several months. Teachers, nurses and anganwadi workers have been staging sit-ins against non-payment of wages. The high court had served a notice to the director general of school education in December after a petitioner pointed out that the state was not disbursing Rs 400 to poor students to buy winter uniforms and woollens. Many children have been going to schools without woollens this winter. The recently appointed teachers were told that they would receive only the basic salary during the first two years, though the figure amounts to less than minimum wages. On the other hand, the government spent crores on holding the investment meet at a mega scale in November even if the investors are yet to turn to Punjab. Public welfare seems the last of the government’s priorities.
The government is yet to announce a single move to boost its revenues and help reduce its debt. It is resorting to quick-fix methods to address its financial exigencies – mortgaging its properties. Information drawn through the RTI route from the chief minister’s office and the Punjab Urban Development Authority tells us that between 2013 and 2015, the Punjab government mortgaged the Jalandhar-based historic Gandhi Vanita Ashram for widows, jails and district courts in Bathinda, Amritsar and Goindwaal to raise a sum of Rs 2,100 crore from banks. The complete picture of properties pledged against loan is yet to emerge.
These desperate measures to raise funds are undertaken with an eye on the next state elections due in 2017. The government has taken a loan of Rs 15,000 crore from a consortium of scheduled commercial banks led by Bank of India for the Punjab Infrastructure Development Board, and further Rs 10,000 crore will flow in later. With this Rs 25,000 crore in hand, the government hopes to refurbish amenities like roads, water and power supply through its urban and rural renewal mission in 117 assembly constituencies and regain public support. Moreover, some populist measures are also expected, as indicated by Sukhbir’s latest announcement of free bus service to ferry Hindus and Sikhs to pilgrimage places.
During the SAD-BJP rule, Punjab’s annual growth rate (2014-15) has dropped closer to 5 percent, from 10.18 percent in 2006-07 during the Congress regime. The state’s per capita income has dropped to Rs 99,000, taking it to 14th position in the all-India list (see box on pages 23, 25). Manpreet Badal says Punjab’s per capita income was once way ahead of more developed states like Maharashtra. Today even states like Himachal Pradesh, Kerala, Sikkim, and Haryana have better figures.
Speaking to me at his tastefully decorated home in Chandigarh, Manpreet Badal quotes Gurbani as well as the anti-establishment poet Dushyant to underscore every point he makes. He blames it on Badal’s tendency to ignore two key sectors of Punjab’s economy – agriculture and industry. He alleges that the government is pursuing an anti-farmer policy. Today Punjab’s farmer, who once led India’s green revolution, is making losses and is in a debt trap. Some 50 farmers ended their lives in 2015 after crop failure due to spurious pesticides supplied by the government agencies. Most of those affected are small and marginal farmers, who would cultivate land on contract basis.
Punjab’s small-scale industries are dying a slow death. In the past five years some 18,000 small units have closed down. One can see a pall of gloom over Gobindgarh Mandi which till recently was famous for its steel mills. The place stands deserted today, and industry owners have sold their machines to scrap dealers. Federation of Punjab Small Scale Industries Association’s president Badil Jindal says the units producing auto parts, hand tools, furnaces and machine tools have nearly closed. Well known industrial firms here have closed units and are only sourcing parts from here. Spinning and sheller industries are in danger. However, bicycles, knitwear and sports goods have somehow managed to survive even if they are facing stiff competition from units in other states. The government is not offering any help to counter the trend.
Jindal says that Punjab has not seen the entry of big industrial units for many years. Ill-advised VAT and excise policies have put a huge financial burden on small-scale industry owners forcing them to close their shops. “The central government’s freight equalisation policy and tax holiday in some neighbouring states have adversely affected the Punjab industries,” says Jindal. An industrialist, who has shifted his unit to Odisha, adds, “What is the government doing to arrest the flight of industry from Punjab? They have not even bothered to help us with problems related to issues like water, power and tax. The government has withheld payments to small units in the name of probing the so-called VAT racket. Such anti-industry policies have resulted in negative economic growth, unemployment or youth getting hooked to drugs – in fact, easy availability of dangerous drugs in any street is a question mark on governance.”
I met a physically challenged young man at a rally addressed by state Congress chief Amarinder Singh at Bathinda in December. He said,
“The Akali government didn’t give me anything. I don’t mind testing the Congress now.”
An early indicator of the popular mood was the Maghi Mela, the traditional fair held in Muktsar on January 14 every year, which is also a platform for all political parties to address rallies. This year, the newcomer Aam Aadmi Party (AAP) drew the strongest crowd, more than the opposition Congress, whereas the Akali Dal had to predictably face a poor show.
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