money talks

How do so many industrialists get into the Rajya Sabha?

Money power is undermining democratic and legislative structures, say current and former MPs.

Vijay Mallya’s flight to England has opened up a veritable can of worms. Every day there are little-known strands coming to light about his business and personal life, from the giant loan defaults to the marquee properties. What is not being discussed as much is his political life and the conflict of interest.

The chairman of the now-defunct Kingfisher Airlines has been a member of the Rajya Sabha since 2002 and is a member of the Consultative Committee for the Ministry of Civil Aviation and the Standing Committee on Commerce. The committee oversees India’s aviation ministry. Its responsibilities include vetting bills drafted by the ministry, and evaluating its demands for grants.

A seat on the panel gives Mallya “access to information, and an unfair advantage to influence policy”, said former Rural Development Minister Jairam Ramesh, calling this “a serious conflict of interest”.

There have, of course, been numerous such instances of conflict of interest in recent years.

Kupendra Reddy, a real estate baron from Karnataka, serves on the Select Committee on the Real Estate (Regulation and Development) Bill, 2013. BJP MP Shyama Charan Gupta – who is a beedi baron – was in the news last year when, as a member of a parliamentary committee on subordinate legislation, he said that tobacco use doesn’t cause cancer. The Committee on Public Undertakings found itself in a controversy in 2009 following complaints that three of its members – T Subbarami Reddy and Lagadapati Rajagopal of the Congress and Nama Nageswara Rao from the Telugu Desam Party – were using their position to further their business interests.

All of them are good examples of the industrialist-politician, but in the public eye at least, it was Mallya who typified the class.

The preferred route

Thangam Thenarasu, a former education minister in Tamil Nadu, says there has been a shift in how businessmen approach politics. Before liberalisation, he says, India had ministers who were close to industrialists – but thereafter industrialists began “entering politics, mostly through the Rajya Sabha”.

A former Congress MP from Karnataka agrees that the Parliament holds a special lure for industrialists. “You can direct policy,” he said. “When a law is drafted, it is the standing committee which vets it. The government system is under its thumb. It can call any bureaucrat. Even as an MP, you have access to the bureaucracy.”

The Rajya Sabha route is preferred by industrialists for several reasons: for one, it avoids the hustle-bustle of electoral politics. It is indeed rare to find businessmen-politicians like Naveen Jindal who contested elections and entered Parliament through Lok Sabha. Most members of the Rajya Sabha are indirectly elected by state legislatures, while the President appoints a few. Every state nominates a fixed number and the legislators in the assemblies usually vote as per party lines.

This system, say current and former MPs, has the tendency to be distorted in states with more than two strong parties.

According to the former Congress MP, the legislative arithmetic in these states creates a market for buying and selling Rajya Sabha seats. A third big party that has some seats but not enough to nominate its own members to the Rajya Sabha can capitalise on its numbers. This is likely, he says, if the small party has been out of power for long – and is cash-strapped.

Ramesh concurred. “This will happen if you have a fractured result – a three-way split. In Rajasthan, you always have a single party dominating the polls. But in Karnataka, in the last 15-30 years, some of the seats have always seen bidding. Jharkhand is another example. In Andhra, the lines between politics and business have blurred so much that it is hard to tell.”

In such a landscape, says the former Congress MP, the Rajya Sabha route to becoming an MP is better than the Lok Sabha one. It is cheaper – numbers mentioned to Scroll.in hovered around Rs 50 crores-Rs 60 crores to win support from parties – and less uncertain.

Coming clean

Even as the number of businesspeople entering the Rajya Sabha rises, India’s rulers are not doing much to stem the conflicts of interest.

According to Kishore Chandra Deo, former minister of tribal affairs in the United Progressive Alliance-II government, MPs (or their parties) have to inform the Speaker about their interests and the parliamentarians are allotted to the standing committees accordingly.

In 2009, a parliamentary committee headed by Deo had noted an “increasing feeling among people that members misuse their position for bettering their interests” and recommended that all MPs declare their interests before being appointed to parliamentary committees. “That would help ensure they are not appointed to committees where they might have a conflict of interest, or to ensure they recuse themselves from meetings where matters pertaining to their industries are being discussed,” Deo said.

The parliamentary committee’s suggestion was never implemented.

Composition of legislature

All these are worrying developments. The Rajya Sabha is supposed to represent the states, not to mention bring in those who have provided yeoman service to the country into the legislative process. If the composition of the Upper House, and its parliamentary committees, morphs to disproportionately favour the mercantile, the nature of its legislative interventions could change. If not because of deliberately courted conflicts of interest, then due to the members’ ignorance about the desperately poor lives of most Indians.

Unfortunately, this isn’t a problem that’s troubling political parties.

Take Mallya, for instance. He has been in the Rajya Sabha for two terms. Both times, he was supported by former Prime Minister HD Deve Gowda’s Janata Dal (Secular). And earlier in the month, as the controversy around him became louder, Deve Gowda came out to defend him.

Interestingly, in the last 12 years, all four MPs nominated by the JD(S) for Rajya Sabha seats have been businessmen – Mallya, MAM Ramaswamy, Rajeev Chandrashekhar and D Kupendra Reddy.

Senior JD(S) leader MS Narayana Rao said the party supported these businesspeople because they had joined and supported it. “If someone says we are selling [Rajya Sabha] seats for a price, that is not correct… They helped the party. If MPs or MLAs contribute to the party, that is not trading.” He conceded that the JD(S) was going through a financial crunch.

Why does the party only nominate businessmen? “That is because we do not have enough seats. If there are more seats, then we will support different interests as well. But we have limited seats.” In the currently assembly, the JD(S) has 40 MLAs, while the Congress has 124 and the BJP has 44. Smaller parties and Independents add up to about 18.

Kupendra Reddy denied paying money to the JD(S). In an email response, Rajeev Chandrashekhar wrote “some business interests do make it to Parliament to both RS and LS ‎on the back of money power” but added that his second term “was as an unopposed Independent!” Scroll.in’s questionnaire to Vijay Mallya remained unanswered.

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The above examples of successful implementation of digitalization are just some of the examples of ‘Ingenuity for Life’ in action. To learn more about Siemens’ push to digitalize India’s manufacturing sector, see here.

This article was produced on behalf of Siemens by the Scroll.in marketing team and not by the Scroll.in editorial staff.