2G verdict: Welcome to the capital of 'nexus capitalism'

The Supreme Court verdict on Thursday cancelling all 122 telecom licences issued by former Communications Minister A Raja is, first and foremost, a severe indictment of the cavalier manner in which the minister, now in jail, issued the licences.

In equal measure, the UPA government - and particularly Prime Minister Manmohan Singh and (then) Finance Minister P Chidambaram - stand exposed as having failed to check Raja’s blatant attempt to hijack the telecom policy for gain.

The Supreme Court verdict may not have indicted them personally, but in the court of public opinion - going by documentary evidence of inter-ministerial goings-on during the time the licences were issued - they stand guilty. They knew what was going on, but they looked away.

[caption id=“attachment_140406” align=“alignleft” width=“380” caption=“In the world of crony capitalism, It takes two to tango. Flickr”] [/caption]

In Chidambaram’s case, there is enough documentary evidence to suggest that he may have pointed Raja in the direction of a policy loophole that Raja exploited, and then gave Raja ex-post facto cover by recommending that the matter be “closed”.

For all of Kapil Sibal’s attempts to deflect the blame for the corruption on Raja, the very fact that Raja was reinducted in 2009 as Telecom Minister, despite everything that Manmohan Singh and the others knew by then of how the telecom policy was hijacked, points to a larger failing - which is tantamount to complicity in Raja’s crime.

So, if the UPA government is taking political flak following Thursday’s court verdict, it deserves all of it.

Yet, there’s another aspect of the whole sordid business of telecom licences that the Supreme Court has exposed but hasn’t received sufficient attention. That relates to the role of corporates, including some of India’s biggest names, in playing by the twisted rules of ’nexus capitalism’ and gaming the system to their advantage.

After the Supreme Court verdict, some of the aggrieved companies have complained that it is unfair for them to be penalised when the policy framework and the implementation was flawed. They were, they wail, just playing by the rules that were set for them. Even those who are not personally aggrieved worry that until such time as telecom policy is cleared up - and this could take a while - their business interests will suffer.

There’s a problem with this line of argument. For far too long, Indian corporates have been happy to live with policy opacity - because it suited them at times. Far too many business houses have wilfully bent or broke the laws to their advantage by gaming the system. If they were displeased with having to personally wade in the slough of corruption, they occasionally ‘outsourced’ it to ‘corporate lobbyists’ who did the dirty work for them.

Never forget that in the heady days soon after the 2009 electoral victory of the UPA, Niira Radia was lobbying frenetically on behalf of some telecom companies to get Raja back in the Telecom Ministry: in that ignoble endeavour, she was calling up everyone from journalists to MPs to assorted wheeler-dealers.

Such blatant interventions in ministry-making and in policy formulations aren’t limited to the telecom sector, of course. There is virtually no industry where corporates have not worked the pliable levers of ‘crony capitalism’. They were happy to live with policy opacity because “the system” worked for them and they could work it in a way that suited them.

Yet, as the latest verdict shows, playing by the twisted rules of ’nexus capitalism’’ isn’t entirely risk-free, and even if they momentarily move the goalpost to their advantage, they can on occasion be hurt badly.

As much as the UPA government, India Inc too has reasons to reflect on the Supreme Court verdict - and see it as a wake-up call for doing business ethically - at least out of a sense of self-interest. As a constituency that has enormous clout over the government, which it has sadly traded for petty short-term gain, it must leverage the verdict and take a united stand to push for greater transparency in policymaking.

Else, when the walls come tumbling down, as they did with the Supreme Court verdict and as they will continue to do given the Transparency Revolution that is under way, they will be seen as ’nexus capitalists’ who were in bed with unscrupulous policy hijackers and, therefore, unworthy of any sympathy when they wail about unfair treatment.