In a day of fast-paced developments, Income-Tax Department officials raided the house of Tamil Nadu Chief Secretary P Rama Mohana Rao on Wednesday morning where they seized Rs 30 lakh in cash in new, post-demonetisation currency notes, according to the Hindu. Later in the day, Central Bureau of Investigation sleuths also arrested Shekar Reddy, one of the biggest sand miners in the state.
Reddy had hit the headlines about 10 days ago after an Income Tax raid on his houses unearthed 177 kg of gold and Rs 130 crore in cash, Rs 34 crores of which was in new notes. As of now, the origins of Reddy’s wealth are unclear. A report in the New Indian Express said that JSR Infra Developers, Reddy’s company, is “executing a variety of projects funded by World Bank. Its clients include Public Works Department, state highways department, Tamil Nadu Road infrastructure Development Corporation and other government agencies.”
Apart from these, Reddy is also the main contractor for riverine sand mining in Tamil Nadu. This is a relatively recent development.
Sand mining, a lucrative business
As this reporter found while working on the Ear to the Ground series for Scroll.in out of Tamil Nadu earlier this year, sand mining contracts flow to a handful of large contractors in the state. These contractors are close to the Dravidian parties. Their fortunes ebb and rise depending on which party is in power.
For a long time, whenever the All India Anna Dravida Munnetra Kazhagam came to power, river sand mining contracts used to be cornered by a Coimbatore-based businessman – O Arumugasamy.
Shortly after 2011, however, Arumugasamy was removed as the sand miner.
According to a researcher studying political funding in Tamil Nadu who did not want to be identified, the contractor took a district member of the ruling All India Anna Dravida Munnetra Kazhagam as his partner.
“When the party high command got to know, the district official was fired and Arumugasamy’s contract was cancelled,” said the researcher. At that time, Reddy, who is said to be close to other senior leaders in the ruling party, was brought in.
Sand mining in Tamil Nadu is a lucrative trade. As this reporter detailed in Scroll.in earlier this year, conservative estimates peg its annual size at about Rs 20,000 crores. Politicians in the state estimate it to be worth around Rs 45,000 crores. On a fraction of this reaches the state exchequer. Tamil Nadu’s budget estimates for 2014-’15 pegs incomes from sand quarries at Rs 216.8 crores. The previous year, that figure stood even lower at Rs 133.4 crores.
Some of the money made from sand mining goes into supporting party cadre and election campaigning. But even that is a relatively small portion of the annual amount the business is estimated to be worth, said the researcher. It is not clear where the rest of it goes.
No checks and balances
Another striking aspect of sand mining in Tamil Nadu is the impunity with which it operates. Villagers or activists say that the state administration and local police support the sand miners.
Other democratic checks and balances – like the courts, media, rival political parties – have failed to to arrest sand mining as well. Even though it damages the state not just economically but also ecologically.
This reporter saw this firsthand while reporting on sand mining from Tamil Nadu. Questions sent to the state government at that time did not receive any responses.
The forces responsible for these outcomes – how contracts are given, where the money goes, the absolute impunity sand miners enjoy – are not understood at all.
Given this larger context, it is interesting that Chief Secretary Rao has been raided as well. Initial media reports suggest a link between him and Reddy. The same report alleges that Reddy has ties with other All India Anna Dravida Munnetra Kazhagam leaders and those close to them.
In that sense, this is a time for cheer and gloom. Cheer because the lid might be coming off a ruinous natural resources scam, which should have received far more attention than has done so far. And gloom because it seems that the lid is finally being lifted for the wrong reasons.
Looking at the timing of the raids – soon after former Chief Minister Jayalalithaa’s death, at a time when the All India Anna Dravida Munnetra Kazhagam is in a flux – it appears that a new political game is underway between the Centre and the Tamil Nadu.