Despite demonetisation, Karnataka's corruption nexus in irrigation sector thrives

A few years ago, a senior IAS officer of a government in South India spent time behind bars after he was arrested in a corruption case. Out on bail and having managed a plum posting, the grapevine in the corridors of power suggests that he is back to his greedy ways. A 15 percent given under the table is standard operating procedure to get him to greenlight a proposal. While he keeps 10 percent of the commission, he distributes five percent among the other stakeholders of the ecosystem.

As Satish Shah, who played the corrupt municipal commissioner D’ Mello in the iconic 1983 cult classic Jaane Bhi Do Yaaro says in the film, “Kuch khao, kuch pheko (Eat some and throw some for others to eat)”.

It is this knowledge of how the ladder works that perhaps gives SC Jayachandra, chief project officer with the Karnataka State Highways Improvement project, the confidence that the tax raid on his house is just a temporary blip. Income tax officials found Rs 152 crore of unaccounted-for income when they raided over a dozen locations in Bengaluru, Chennai and Erode. Of this, Rs 5.7 crore was cash in new Rs 2,000 notes. At a time when the aam aadmi in Bengaluru was standing in queues for hours to withdraw Rs 2,000 from an ATM, the sight of the bundles of currency on his bed was visual proof of Jayachandra’s clout.

In a bid to do damage control, Karnataka chief minister Siddaramaiah has suspended Jayachandra and Chikkarayappa, managing director of Cauvery Neeravari Nigama (irrigation corporation). The two were partners in crime and had co-opted two business houses, a bank manager and PWD and irrigation contractors to convert their black money into white after 8 November. The tip of the iceberg in his statement after the raid was that all the money was not his, and had to be paid to ministers, presumably in Karnataka.

Why there could be truth in what Jayachandra says is because he is a repeat offender and could not have thrived without the blessings of people higher up in the corruption chain. The Lokayukta Police under Justice Santosh Hegde, had raided Jayachandra in 2008 when he was chief engineer with the Hemavati Irrigation project. Illegal wealth worth Rs 84.53 lakh was unearthed back then. But successive Karnataka governments did not allow Jayachandra to be prosecuted.

“Both governments — the BJP from 2008 to 2013 and Congress after that — are guilty of not allowing the law of the land to proceed against Jayachandra because he is of their liking,’’ says Santosh Hegde, former Lokayukta of Karnataka, “There is no denying that there is a nexus between politicians, bureaucrats, industrialists and contractors.”

Despite building a watertight case against Jayachandra, the stamp of approval from the Karnataka government is still pending — an indication of Jayachandra’s touch-me-not stature. Which is why Siddaramaiah’s attempt to distance himself by suspending the duo is just a feeble attempt to prevent Congress from collateral damage. Whether Jayachandra is prosecuted will be a test case because if he sings like a canary during interrogation, a lot of big fish could find themselves gasping for breath.

An interesting aspect of this raid was that Jayachandra bragged that the sleuths would have found Rs 40 crore in cash if they had come a month earlier. “This sort of big talk and tall claims are quite common because such people who are used to flouting the law take pride in how they manage the system,” says Hegde.

But Karnataka is not the exception. In almost every state in India, irrigation is a big ticket portfolio in which it is easy to inflate costs of projects and allow party workers to make money while allowing the big fish to park money through benaami transactions.

Take for instance, the example of yet another Indian state. Here, on almost every project, every person in the food chain has a voracious appetite for kickbacks. The industrialist deals with the person at the top and once the project is cleared, the work is sub-contracted and then further sub-sub-contracted. This ensures even the sarpanch of a panchayat in whose village the project is grounded, gets his share of the booty.

Bureaucrats get a fixed payment for signing on the dotted line. In the manner in which the greasy system works, an honest district magistrate is someone who does not demand more than the 2.5 percent that is automatically credited into his kitty on every project in his domain, without asking. But the greedy sort look to make even upto 20 percent on each project, by asking the contractor to inflate the cost to factor the bribe.

Mining is another sector where a posting helps you hit gold if you are the kind willing to bend rules. The mining syndicates in most states again deal directly with the political leadership. But when raids take place, it is only the hapless truck driver or a lowly manager who gets caught. Officials connect the dots and realise the links go all the way up when those arrested walk out on bail within 24 hours. They admit the next time, they themselves are wary of arresting the mining mafia. Hegde referred to the Reddy brothers as the “Republic of Bellary” but today, much of India is the “Republic of Mined India”.

The raids that are showing up these seizures of currency notes are just the tip of the iceberg. And the high-profile movement to a cashless economy a mere cover-up because demonetisation does nothing to break the backbone of the way in which the corrupt system operates.