In diatribe against Adani, why Cong is on a sticky wicket in Rajasthan, Chhattisgarh

Serious allegations of “brazen stock manipulation and accounting fraud” levelled against Gautam Adani by US-based investor research firm Hindenburg Research have added heft to Congress leader Rahul Gandhi’s diatribe against the industrialist and the ostensibly preferential treatment that Adani Group companies receive from the Narendra Modi government.

However, as the Congress leads a united Opposition onslaught against the Centre on the issue, there are also reasons for Rahul to take a closer look at how his party’s governments in Rajasthan and Chhattisgarh – two of the three states that the Congress is in power – have warmed up to the controversial billionaire in just the last year.

The uproar in Parliament over the past two days has demonstrated that claims made in the Hindenburg report and the immediate repercussions they had on Adani Group stocks have allowed the Congress to revive a joint Opposition attack against the Modi government.

For two days now, a united Opposition – including the Trinamool Congress, Aam Aadmi Party and the Bharat Rashtra Samithi that had, so far, distanced themselves from any Congress-led blitz against the Centre, including the Bharat Jodo Yatra – has pressed on with its demand for either a Joint Parliamentary Committee probe or an inquiry ordered by the Chief Justice of India and supervised by the Supreme Court into what they are calling the Mega Adani Scam.

Also Read: All about Hindenburg Research, the US firm that has taken on Gautam Adani

‘Open to a debate’

Pleas by Union Parliamentary Affairs minister Pralhad Joshi to allow discussion on the Motion of Thanks to the President’s Address delivered before a joint sitting of both Houses of Parliament on the first day of the ongoing budget session have been stridently rejected by the Congress-led Opposition.

Joshi has asserted that the government was “open to a debate” on the Opposition’s demands but made it conditional on first having discussions on the President’s Address and the Union Budget presented by Finance Minister Nirmala Sitharaman.

Floor leaders of various Opposition parties who have been meeting every morning in the chamber of Congress president and Leader of Opposition in the Rajya Sabha, Mallikarjun Kharge, have refused to budge. The Congress party’s media and publicity wing chairman, Pawan Khera, has also attacked the Modi government’s “stoic silence on the Hindenburg Research report, as if nothing has happened”.

Khera said, “We want to tell PM Modi that we have nothing to say, if you cheat your best friend, but we shall not keep quiet if you cheat the investors of India – 29 crore policy holders of LIC and 45 crore account holders of SBI” who stand to lose their life’s savings because of the extremely risky transactions and investments of the Adani group in LIC and SBI.”

Congress feels vindicated

The Congress sees the Hindenburg Report as a vindication of Rahul’s repeated attacks at the Modi-Adani nexus. The adverse impact that the Hindenburg Report has had on the Adani Group – and by extension the investments made in it by the LIC and the SBI –has, as per the Congress, put a sizeable chunk of India’s population at risk of suffering severe financial losses. On February 6, the Congress has planned nationwide demonstrations outside offices of the LIC and the SBI in every district.

With nine Assembly polls due over the next 11 months and the Lok Sabha polls in 2024, the Congress believes the Hindenburg report gives Rahul just the ammunition he needed to prove that Modi and the BJP have imperilled the financial security of Indians and the fiscal health of institutions like the LIC and the SBI by their patronage of Gautam Adani.

But, while the Congress may hope that its latest offensive on the Adani-Hindenburg row could be channelized for a reversal of the party’s dwindling electoral fortunes, it will also need to explain how the controversial billionaire steadily grew his empire’s footprint in Congress-ruled Rajasthan and Chhattisgarh.

Both these states are due for polls towards the end of this year. For now, the Congress may appear comfortable in Chhattisgarh but resentment has been brewing against the Bhupesh Baghel government in tribal pockets of the state, particularly in north Chhattisgarh, for his alleged largesse to the Adani Group. In Rajasthan too, where the Congress is grappling to resolve its internal conflict between CM Ashok Gehlot and Tonk MLA Sachin Pilot, the former’s recent camaraderie with Adani is likely to come in for scrutiny.

Also Read: India’s conundrum: Greater the wealth, lesser the tax burden

Last October, while Rahul was on his BJY and was attacking the Modi-Adani friendship on a daily basis, Gehlot shared stage with Gautam Adani at the Invest Rajasthan Summit in Jaipur. The Adani Group chairman vowed to invest Rs. 65,000 crore in Rajasthan over the next five to seven years and create more than 40,000 direct and indirect jobs. Gehlot and Adani posed for the shutterbugs and lavished praise on each other – a move that immediately raised a stink within the Congress.

Gehlot’s hobnobbing with Adani

After the Jaipur fiasco, the Congress claimed it had never been against the Adani Group but was merely critical of it building a monopoly across various sectors and the sweetheart deals it had been receiving from governments at the Centre and in BJP-ruled states. Jairam Ramesh, Pawan Khera and other party leaders hinted that Gehlot could not have spurned Adani’s offer as the industrialist was promising thousands of jobs for the state’s youth and revenue for the government at a time when the Congress was spinning rising unemployment as a major electoral issue.

For now, this is the stand that the Congress has decided to stick with whenever confronted with questions about the dealings its own chief ministers have had with Adani. In Chhattisgarh, though, party may find it difficult to push the narrative of being generous towards Adani in the interest of the state and its people.

Last March, chief minister Baghel had approved the clearing of over 1100 hectares of land in the ecologically fragile and tribal-dominated Hasdeo Arand forests for the second phase of the Parsa East and Kente Basan (PEKB) coal mine. The decision had a direct link with not just the Adani Group but also with Gehlot. The PEKB coal mine had been allocated to the Rajasthan government and its exploitation for coal has been contracted to an Adani Group company.

Also Read: Hindenburg disclosure on Adani Group: Clean-up notice to all Indian companies

Baghel’s decision revived protests by tribals and environmentalists across north Chhattisgarh. In June, the protests received support from Baghel’s health minister T.S. Singh Deo, whose political fief of Surguja – he is the titular head of the Surguja royal family and a third-term MLA from the Ambikapur constituency – is where the PEKB mine is situated. Like Gehlot and Pilot in Rajasthan, Baghel and Singh Deo have also been embroiled in a turf war.

With Singh Deo backing the anti-mining protests, Baghel was forced to put the PEKB project on hold last June. However, the protestors claim that the government’s order to stop all activity for the PEKB mine’s second phase was “only on paper”.

Activist Alok Sharma of the Chhattisgarh Bachao Andolan told The Federal, “As per the government, no work was supposed to happen for the PEKB second phase after June but trees are being cut daily since last September under the false pretext of these being in areas earmarked for Phase I of the project… After Rahul Gandhi publicly said that the Save Hasdeo protests were justified, we had hoped that all mining activity in Hasdeo Arand will stop but the CM is only fooling the people… wherever Rahul Gandhi goes he attacks Adani but in Congress-ruled Chhattisgarh, Adani is thriving.”

For Baghel, the kerfuffle in north Chhattisgarh is in complete contrast to an Adani-linked controversy he had encountered early on in his tenure as CM. In March 2019, Baghel had earned kudos for “respecting the wishes of the tribals” when his newly elected government issued a show-cause notice to NMDC-CMDC Limited (NCL). The joint venture between the Centre-owned National Mineral Development Corporation (NMDC) and the Chhattisgarh Mineral Development Corporation (CMDC) was asked to explain why allotment of the Bailadila iron ore mine in south Chhattisgarh’s Dantewada, for which too Adani Enterprises was the mine developer and operator (MDO), shouldn’t be cancelled.

The NCL had been awarded the mine by the previous Raman Singh-led BJP government. The mining project had sparked widespread protests by tribals across the Bastar region. In June 2019, the Baghel government halted all work at the Bailadila mine and ordered a review of all permissions given for the project. This had earned Baghel considerable goodwill among the tribals.

Three years later, Baghel is fending off criticism for prioritising interests of the Adani Group over those of the forest dwellers.

A close aide of the CM told The Federal that as Chhattisgarh inches closer to assembly polls, the Save Hasdeo Arand protests could turn into a “major political headache” for both Rahul and Baghel. “The PEKB coal mine was cleared by the previous Raman Singh government and Baghel had delayed the project as much as he could because he was aware of the resistance to it from the local tribals but last year, due to coal shortage in Rajasthan and pressure from the Gehlot government, Baghel had to give in,” the aide said.

Baghel’s aide said there’s also a reason why navigating the ongoing protests in an election year will be a “political challenge” for the CM. “Save Hasdeo is a people’s movement but there are also political interests involved”, the aide said, alluding to the support that protestors received from Singh Deo.

Leaders from the Congress’ Rajasthan and Chhattisgarh unit claim it’s only a matter of time before the ‘Adani question’ is posed to Rahul too. What remains to be seen is if the Congress, which has so far been defending the deals of its state governments with the Adani Group on the grounds that these were signed through a transparent process without robbing other competitors of a level-playing field or compromising public interest, does a volte face to strengthen its attack against the industrialist and his backers in the Modi government.

Though the party’s media and publicity chief, Pawan Khera, evaded a direct response to the question, he seemed to indicate that such an eventuality can’t be ruled out. “There are new developments that are now in the public domain; our governments are alert… hamari aankhen bhi khuli hain aur kaan bhi aur sahi waqt aane par hum bolte bhi hain (our eyes and ears are open and we will speak at the right time),” Khera said when asked if Congress governments will now reconsider any MoUs or deals signed with the Adani group.