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HindustanTimes Tue,23 Sep 2014
Bring back my Bellary
Samar Halarnkar, Hindustan Times
August 03, 2011
First Published: 22:48 IST(3/8/2011)
Last Updated: 22:51 IST(3/8/2011)

As ease-of-doing-business rankings go, this should be up there with the best in the world. 

The government comes to you, handles paperwork across multiple departments - helps you run your business without documents, if needed - ensures officials trying to enforce some silly law or the other do not bother you and, furthermore, guarantees profits.

Shenzen, China?

How about Bellary, India?

You may have heard of 'The Republic of Bellary', but you may not have realised how three brother ministers - as the sons of a police constable, their rise too mirrors the Indian dream - in the BJP's only southern government brought this poor, backward Karnataka district to national attention.

Our story begins as the 21st century dawns. To feed its voracious appetite for steel, China, the world's largest steel-maker, needs more raw material, iron ore. Bellary has some of the best-quality ore in India, and, thanks to the creative, responsive governance I spoke of, this former backwater is soon producing 80% of the nation's iron ore.

The three Bellary brothers - as we call tourism minister G Janardhana Reddy, revenue minister G Karunakara Reddy and Karnataka Milk Federation chairman Somashekhar Reddy - are the political patrons of the industry and the district. They smoothen out administrative and legal wrinkles - even pesky state boundary markers so the excavators need not stop - rein in a few fidgety officials who try to put a spoke into the wheels of enterprise, and create a multi-billion dollar industry where once there was just Deccan heat and dust. In return, they take about a fourth of the profits and live life large: SUVs, private palaces and jets. No one does anything for free, right?

But we really are crabs in a basket.

This wonder of Indian efficiency is in danger of collapse - because an overzealous, retired Supreme Court judge called Santosh Hegde spends nearly five years producing this 25,228-page report, which calls the great boom of Bellary a "mafia operation".

I mean, really.

This Justice Hegde appears to be a sarcastic man. I was on a television show with him earlier in the week, and he acknowledged the efficiency of the Bellary model of governance. "From mine to ship, everything was handled for you," he said. He called it "a single-window system". He added, "for corruption".

Let me take you through Justice Hegde's report. You decide.

Over five years, more than 100 companies and 787 "officials and powerful people" conspired to cheat Karnataka of Rs16,085 crore in taxes and other levies, as they mined iron ore without permits and destroyed the environment, says the report produced by Justice Hegde's organisation, the public ombudsman called the lokayukta.

How can so many officials, politicians and companies work towards mutual benefit? If things were really rotten, surely the BJP, the party with a difference, would do something? Surely even the party with no difference, the Congress, recently so sensitive to accusations of corruption, would intervene? But this incorrigible Justice Hegde, in his first report in 2008, also accused the Congress of malfeasance, insisting that R23 crore be recovered from the state's former chief minister, Dharam Singh.

Is India really this corrupt, this great and glorious nation with its great and glorious history? I think Bookanakere Siddalingappa Yeddyurappa, the poor fellow who had to resign thanks to this silly report, was right. This is a "political conspiracy," he fumed. Yeddyurappa should instead have - as he pointed out last week - received the Nobel prize for governance and development.

It gets sillier. Justice Hegde drags some of India's biggest corporate names into his report, charging them with bribery and fraud in exporting illegally mined iron ore. There's the $6.4 billion Adani Enterprises, one of India's largest trading houses. Could they possibly have maintained a chart of bribes for politicians and officials in at least seven government departments? Page 53 of the report says these were some of the payments listed in Adani's books: R1 lakh bi-monthly for a superintendent of police (lesser through the ranks, ending with Rs2,000 for police outposts); R50,000 per ship to the port director (Rs5,500 for port staff); and so on and so forth. It's so intricate, so unbelievable, isn't it?

There's the $5 billion Jindal Steel Works (JSW), one of India's largest steel companies, and one of the world's cheapest steel producers. The report says JSW dodged state levies between 2006 and 2010 by underpaying levies on overloaded trucks, paying only royalties on the normal weight of trucks. More than 12 lakh tonnes, valued at R342 crore, were so processed by the company, the report says. The company is also accused of transferring, through a trail of bank transactions, Rs10 crore to an educational trust run by Yeddyurappa's family by March 2010.

If JSW was indeed this ingenious, should it not be admired? Justice Hegde drags in many more companies, even reputed State-run institutions, such as India's largest minerals producer, NMDC, and Nafed, one of India's largest cooperatives, working ceaselessly for the welfare of the Indian farmer.

What good will come of these accusations? The BJP got rid of poor Yeddyurappa - though he kicked and screamed a bit, understandable for someone who blessed the Bellary model - but it isn't going to do more than that. Isn't it lucky the lokayukta was allowed to do no more than hand over the report? The Supreme Court, exercised by the shindig raised by the good justice, has temporarily stopped mining in Karnataka, but it won't be guided by his report.

Bellary will never be the same again. At least, the Reddy brothers remain in government. There is some justice, after all.


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