Business Standard

Mihir S Sharma: The RWAs' hero

Whether on power tariffs or real estate, Arvind Kejriwal has a sense for popular anger. But solutions must come from elsewhere

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was born to be a politician. He effortlessly dominated the news last week though his trademark mixture of gimmickry and mud-slinging. Yes, his personal and political style is far from pleasant – or even halfway intelligent – but his political instincts aren’t in doubt. Like the best demagogues, he understands precisely what angers his target audience, and stokes that anger rather than searching for solutions. Even if you ignore such men, it is dangerous to ignore the issues they raise, or you allow them to claim to be valiant outsiders telling forbidden truths.

So let’s look at Mr Kejriwal’s concerns. First his “discovery” that Robert Vadra, the son-in-law of President Sonia Gandhi, had gone on a “property buying spree” financed by “interest-free loans from DLF” that “showed a possible quid pro quo”. Of course, Mr Kejriwal’s “discovery” is actually publicly accessible information reported in a widely read story last year by and of The Economic Times.

What, precisely, is the accusation here? Is being accused of diluting shareholder value by giving interest-free loans to Mr Vadra, a friend of the promoters? Apparently not, though the appearance of that requires answers. (DLF claims they weren’t loans; they were advances against land they wished to purchase — which only begs the question of whether Mr Vadra’s profits on reselling his company’s land in Haryana over to DLF were kept artificially high.)

If it was just that, then the Singhs of DLF could wave away complaints and ask shareholders to take it up at the next annual general meeting. However, it seems Mr Kejriwal is unconcerned about companies’ duty to their shareholders. His actual concern is that DLF might be spending money well, as far as its shareholders are concerned — but to buy favours from a well-connected man. If the latter, then Mr Vadra cannot be held culpable, as he is a private individual, and there is no law against selling your goodwill. However, if DLF received any special concessions from a state or central government as a result of Mr Vadra’s direct intercession, then the person allowing those decisions should be held accountable, regardless of what Mr Vadra was or was not paid. Mr Kejriwal has not only provided no proof that this happened, he hasn’t even indicated what such concessions could have been.

The truth is, concessions don’t even need to be explicitly made in order for Mr Vadra to be valuable to DLF. Yes, irresponsible individuals can levy accusations at Mr Vadra and DLF without any evidence whatsoever of actual wrongdoing; equally, irresponsible companies can buy and benefit from influence without any actual wrongdoing. All you need is “political equity” — allowing powerful friends an attractively priced stake in your profiteering, in order to buy regulatory and local-government patience. Nobody needs to make any phone calls; everyone is told that such-and-such complex has flats owned by Mr Vadra – as well as a veritable, invitation-only who’s-who of the political, journalistic, and business worlds – and suddenly investigations into whether the complex violates this or that agreement between DLF and local authorities aren’t pursued with too much energy. Why would any careerist bureaucrat go the extra mile to do so? And nothing as vulgar as a money exchange is needed, no direct requests are made.

The RWAs’ heroWere this the accusation against DLF and Mr Vadra, then Mr Kejriwal would have been on to something. First, because proof of quid pro quo is immaterial to the accusation. And second, because we all know that the powerful have access to deals and concessions in “business” that the rest of us don’t. Mr Vadra, with his talk of golf and being old family friends with DLF’s owners, is not helping dissipate that impression. Indeed, he probably thinks that the great deals he got from DLF are signs of his brilliance and independence as a businessman. We all know people like that, and we recognise that there’s something wrong with an economy that allows them to flourish. Angered, we should want to work to strengthen our regulatory apparatus, to cut down the leeway it gives the powerful.

But, of course, Mr Kejriwal deals exclusively in personalities, and the lowest common denominator. So, instead, he targets politicians and speaks in innuendo, knowing full well he can’t and won’t follow up. Like all demagogues, he doesn’t expect to provide solutions; he expects to stoke an inchoate anger that he will then ride to power.

Indeed, his core constituency – the smug, RWA-forming residents of middle-class Delhi – would be inconvenienced with greater regulatory capacity. After all, it isn’t just DLF that would be under the scanner then; all the little Arvinds’ unauthorised additions and extra floors and illegal gates and unlawful tubewells would be, too.

That’s why even if you’re happy, as I am, that someone’s talking about and the unearned benefits of being politically powerful, you should be worried that it’s Arvind Kejriwal and his hypocritical host. Surely his other attention-grabbing stunt of the week brought that home to you? Images of Mr Kejriwal intrepidly risking his life climbing rickety ladders in floaters to reconnect people’s electricity, his urging the burning of electricity bills, do make for dashed good TV. But the truth is that Delhi’s recent increases in the price of power are well within reasonable bounds. In Delhi the maximum tariff is Rs 6.40 per unit once you cross 400 units; meanwhile, in Mumbai’s suburbs the electricity regulator has just approved a hike that would make those consuming between 300 and 500 units pay Rs 7.92 a unit; from 500 to 900, you’d pay Rs 8.78 a unit. Prices in Bangalore and Kolkata are also well above Rs 6 a unit, and in the latter case have a variable fuel-cost surcharge built in.

In Mr Kejriwal’s world – where, as his “vision document” states, the prices of essential commodities will be set by The People, presumably gathered together in a vast Supreme Soviet of resident welfare associations, or RWAs – such persuasion doesn’t fit. Instead, he will say that paying for power is a fraud perpetrated on Delhi’s honest, bijli-stealing public. As has been widely reported, in one of the buildings that Mr Kejriwal bravely liberated from the evil clutches of a power company expecting to be paid for its service lived a couple of dozen people — arranged in four families, each with a TV and fridge and cooler. You have the right to free power to watch your store-bought TV. But it’s the other politicians who try to buy votes through bribes.

Men like Mr Kejriwal, and the reactionary populism they represent, are useful in that they indicate where anger’s building up. More responsible politicians should then tackle their evasions, accusations and claims head-on. The Delhi government needs to defend its transparently. And perhaps Mr Vadra, if he is concerned at all about the enterprise his adopted family runs, should explain, with some humility, how and why he got the deals from DLF he did.


mihir.sharma@bsmail.in  

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