Mai baap,selectively

The way the government has treated Vedanta’s proposal to acquire 30 per cent in Cairn goes to the heart of the mistrust between India Inc and UPA 2. The home ministry’s sudden and last-minute discovery of alleged transgressions by the Anil Agarwal-promoted Vedanta Resources in India and abroad raises serious questions about whether the government is targeting particular business houses.

It has been over 18 months since Vedanta’s proposal was first placed before the Cabinet Committee on Economic Affairs (CCEA). One after the other,Vedanta and Cairn bowed to every demand of the government and its undertaking ONGC,to ensure the $8.48 billion transaction is completed. Cairn last agreed on December 1 to share with the state-owned ONGC a part of royalty on a Rajasthan oil block in proportion to its shareholding. The home ministry,in its no-objection security certificate,pinned a bunch of red flags,digging up alleged defaults,human rights violations and environmental damage in mining and metal projects. The petroleum ministry has used this to send the proposal back to the CCEA for approval with a recommendation that the CCEA allow the share transaction as the concerns highlighted by the home ministry have “no bearing whatsoever on the security aspects.”

So why this charade? Such arbitrariness is a throwback to the mai baap sarkar that policymakers in India consciously worked to get rid of over the last two decades. In September 2010,Congress general secretary Rahul Gandhi flew to Niyamgiri in Orissa to declare Vedanta’s land acquisition illegal. The previous month,the then minister of environment and forests,Jairam Ramesh,shot down the company’s mining proposal citing violation of forest and environment laws. Since then,it has become only more and more difficult for Vedanta to get past regulatory hurdles. The Cairn-Vedanta deal also met with serial obstacles during the last 18 months. Now,when the transaction is just about to be approved,the home ministry’s formidable research team has discovered “transgressions”. At the government-industry task force earlier this week,CEOs complained of harassment by the taxman. They stopped short of citing specific instances of businesspersons being targeted. This comes in the middle of the slowdown,the policy freeze and all the flip-flops. Not exactly an India Story picture postcard to send home this season.