What the recent I-T raids on UP perfumers reveal about the state

In the past two weeks or so, there has been a series of tax raids in Uttar Pradesh against businessmen said to be close to the Samajwadi Party (SP), led by former chief minister Akhilesh Yadav.

The SP is the state’s main opposition and also the main challenger of the ruling BJP in the upcoming assembly election. The polls are likely to be held from next month, though the current Omicron wave of COVID-19 may well play a role in deciding the dates and other modalities of the election.

The raids, mostly by the centrally controlled Income Tax Department, began on December 18 when premises of three businessmen, Rajeev Rai, Manoj Yadav and Jainendra Yadav, thought to be close to the SP, were raided in Mau, Mainpuri and Lucknow, respectively, besides other locations where these three have businesses and properties. The raids continued through the first week of the New Year on a few other businessmen similarly, or somewhat, associated with the SP.

In between these two sets of raids, I-T officials, along with their GST Intelligence counterparts, stumbled upon a huge stash of cash and gold in a raid in Kanpur. This raid was part of a crackdown on a few nearby Kannauj perfumers who have businesses in Kanpur as well.

The raid kicked off allegations and counter-allegations between the top leadership of the BJP and SP. It began on December 26 and yielded more than ₹194 crore in cash and 23 kg gold. These were stashed in the Kanpur house of a businessman called Piyush Jain.

Soon Jain was arrested and this led to allegations by the BJP that the suspect was behind Akhilesh Yadav’s launch of a new perfume that he called ‘Samajwadi Itra’.

Akhilesh denied any links with Jain, or the allegation that the perfume was supplied by the arrested businessman. The SP bosses pointed out that the raid was the result of a “botched up” operation as it was intended to “fix” another Jain perfumer, an MLC of the Samajwadi Party. That MLC, Pushpraj Jain, had offered the perfume as a gift to be shared among SP supporters during the election campaign.

Also read: ‘Comedy of errors’: IT raids on businessman who launched SP perfume

Countering Akhilesh’s claims, BJP leaders, including Chief Minister Yogi Adityanath, Prime Minister Narendra Modi, Union Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, stuck to the charge of cronyism against the SP chief.

Days after the raid on Piyush Jain’s premises there were claims that the tax authorities were considering a large part of cash recovery as generated from the business turnover of the perfumer. Soon both the authorities and Odichem Industries where Jain is a partner denied this, belying hopes of Jain’s early release from custody. Yet the SP kept on claiming that Piyush Jain had been close to the BJP higher ups and the party had nothing to do with him.

Even as this war of words between the BJP and SP over Piyush’s arrest was continuing, tax authorities raided the premises of Pushpraj Jain and yet another Kannuaj perfumer, Fauzan Malik on December 31. The SP called these a cover up and a vindication of the claims earlier made by Akhilesh about government agencies inadvertently raiding the wrong target.

Whatever the case, the fact is that two men with similar names have been targeted so far, giving rise to speculations about the intent of the raids. This has also led to the entire exercise being dubbed a “comedy of errors” – by both the SP and the media. This may or may not be a “comedy of errors”, but the message going out is quite serious; and thus, it can well have consequences for politics as well as business and industry.

Also read: Farm laws’ repeal mainly influenced by BJP’s high stakes in Western UP

The BJP’s charge is that the SP, during its tenure, passed on huge benefits to select businessmen; the SP rebuffs the charge and says the BJP is targeting select people in an effort to undermine its rivals. As per the SP, the BJP’s plan backfired because the agencies picked the wrong or unintended target, and reached the intended one in Kannuaj only five days later. The SP’s point is that the first raid in Kanpur did not bring the BJP desired results. And this led to the raids against Pushpraj and Fauzan Malik.

What UP is witnessing is the blurring of lines between politics and business. As the benighted state, with the largest share of the country’s population, limps towards polls, the smell of tar, rather than perfume, looms over it. 

In the coming days it may well get too much for the electorate, as they watch the haggling over political patronage that businesses expect in return for huge funds. When politicians in UP talk of “ease of doing business”, what they could actually mean is “ease of doing politics”.

– The writer is an independent journalist based in Delhi and NCR. He tweets @abidshahjourno