Over the next 15 months, elections are set to dominate the discourse in India. In that context, the 106-page Hindenburg report against industrialist Gautam Adani may well become part of the script for an intense political war.
In view of the Gujarati tycoon’s perceived proximity to Prime Minister Narendra Modi and the group’s massive growth in the last few years, opposition parties latched on to the report and demanded investigations by market regulators and even a joint parliamentary committee (JPC) probe into the alleged irregularities.
Congress leader Rahul Gandhi, seemingly energised by his recent 3,500km-walk, led his party’s attack: “During the yatra, youth kept asking me, ‘How is that Adani is so successful? How did his net worth jump from $8 billion to $140 billion USD since 2014?’” Rahul has been consistent in attacking the government for its “pro-corporate” image. He had limited success in 2015 when his “suit boot ki sarkar” jibe forced the Modi government to make a policy shift to earn a pro-poor image.
The Trinamool Congress, the Janata Dal (United)-Rashtriya Janata Dal alliance, the Samajwadi Party and the Aam Aadmi Party have taken up the issue to embarrass the BJP, which is a key opponent in their states. The opposition’s main argument against the corporate house is its business links with public sector entities like the State Bank of India and the Life Insurance Corporation of India.
Banks have a loan exposure of around Rs80,000 crore to the Adani Group, of which the SBI has lent around Rs27,000 crore. However, SBI chairman Dinesh Kumar Khara said the bank’s loans to the group were 0.88 per cent of its books and that it does not envisage any challenge. Similarly, the LIC’s investment of around Rs36,000 crore in the Adani Group is 0.97 per cent of its assets under management at book value. Also, the group has offered to return its debt early to restore market sentiment.
“Indian markets are well regulated by the RBI and SEBI,” said BJP spokesperson Gopal Krishna Agarwal. “Even Finance Minister Nirmala Sitharaman reiterated that the regulators are doing their job. The RBI has given explanations regarding the loans given by the banks to various entities. Markets are resilient. Moreover, the Congress has been doing the same thing with different issues, be it Rafale or Article 370. It has been lying that Rs15 lakh crore loans were waived. Even on the farm laws, it created a false narrative.”
After Rahul flashed pictures of Modi with Adani, the BJP hit back with images of the industrialist with Rahul’s brother-in-law Robert Vadra and also with Congress chief ministers. The BJP said that Rahul’s allegations that Modi helped Adani’s business to flourish was false and challenged him to prove his claims against the prime minister in Parliament.
The opposition’s offensive against the government in the Adani issue may feel similar to the 2018 Rafale deal allegations. But, unlike the Rafale deal, the common man could be directly affected by Adani Group’s problems, if they persist and have an adverse impact on the economy. This, in turn, could take away the sheen of the 2023 Union budget’s infrastructure push. And, if the crisis spirals, it has the potential to extract a political cost from the Modi government.
Responding to the opposition’s allegations on Adani, Modi said that his government was focused on dalits, tribals, and backward and marginalised classes. “People trust Modi,” he said in the Lok Sabha. “The trust in Modi was not because of newspaper headlines or TV appearances. I have spent my life for the country. They (the opposition) cannot comprehend the trust the country has in Modi. Will 80 crore people getting free ration trust these people?” He went on to enumerate the number of beneficiaries of various government schemes. “They will trust me instead of you,” he said.
The political war over the fortunes of the Adani Group is likely to escalate in the coming days as the opposition will insist on constituting a JPC to probe the matter. A demand that is unlikely to be met by the government―the last investigative JPC was set up in 2013. The BJP’s counteroffensive may focus on Adani’s investments in Congress-ruled states and the industrialist’s rise during the UPA regime, well before the NDA came to power in 2014.
BJP MP Ravi Shankar Prasad said that Rahul Gandhi had not learned anything from past experiences. “Before the 2019 elections, he attacked the PM with the chowkidar jibe (on the Rafale issue),” he said. “What happened then? Where did the Congress reach? They are again making such allegations. The electorate will teach them a lesson in 2024.”
With multiple assembly elections scheduled for this year and India’s presidency of the G20 summit, the allegations against Adani can be a headache for the government if the issue drags on, as it would have to work hard to shift the focus back to its agenda.