The Rise and Rise of Gautam Adani in Modi Raj: Crony Capitalism under Authoritarianism: An Illustrative Case

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Sukla Sen

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Nov 28, 2021, 6:06:58 AM11/28/21
to foil-l

That's how "crony capitalism" works.
And that's how it distinguishes itself from "normal" capitalism - including its neoliberal version.

It needs an authoritarian state - de facto if not de jure, to promote and make grow handpicked capitalists at astounding rates by virtually setting aside "normal" ground rules - "rules" plus low to moderate levels of unscrupulous manipulation, of capitalism - which also, of course, allows and sees differential rates of developments among competing capitalists, but at decidedly slower rates.

A comparison between the rise of Dhirubhai Ambani - considered pretty much legendary in his days, and Gautam Adani over the last seven years would, most likely, testify to that.

I/II.
<<Adani Group chairman, Gautam Adani, is now Asia's and India's richest man, surpassing Reliance Industries Limited chairman Mukesh Ambani. Adani's wealth swelled up recently, especially after the onset of covid-19 pandemic, with a rise of 1800%. Mukesh Ambani's net wealth has taken a slight hit after Reliance Industries Limited scrapped a deal with Saudi Aramco. Adani group operates a slew of companies and the resurgence of his firms' shares on the stock market is the reason why Gautam Adani's net worth has increased. Watch this report for more.>>


II.

[Thread 1/18]
Gautam Shantilal Adani: A Modi made man.

Adani was very close to then the CM Keshubhai Patel since 1995. 

Modi took charge in Gujarat in 2001, knowing he would have to win the state election. But also, he didn't want to depend on Pramod Mahajan, then the BJP’s finance manager.
(2/18)

Modi wanted his own sources of funds, but this wasn't easy. Industry was suspicious of this RSS man.

In starting, Modi distrusted Adani because of his rapid growth and was too closed to Keshubhai. It took Adani a year to enter in Modi’s inner circle.
(3/18)

After, the Gujarat riots CII leaders criticised Modi. 

A group of local businessman― including Adani, Indravadan Modi of Cadila, Karsanbhai Patel of Nirma established a rival organisation called Resurgent Group of Gujarat (RGG) and threatened to leave CII.
(4/18)

And then came the ‘Vibrant Gujarat Summit- 2003’, and the ₹15,000cr investment commitment from Adani. It was the biggest turning point of Adani’s empire.
(5/18)

Adani Ports & Special Economic Zone (SEZ):

The rates at which the Adani Group bagged land from the Gujarat govt for its port and special economic zone (SEZ) project – between ₹1 & ₹32 per square metre –were much lower than other companies that set up units in the state.
(6/18)

Concessional pricing apart, the group did not face land acquisition hurdles, as the state allotted non-agricultural “government land” for Adani Port and SEZ. 

[Policy: only GIDC (Gujarat Industrial Development Corporation) land can be allotted for industries]
(7/18)

Adani Group is the only private firm in Gujarat having a “non-agriculture govt land”.

APSEZ spread across 15,946.32 acres (6,456 hectares) ― at the rate of ₹1 & ₹32 per sq mt there was no other instance of land being allotted to any company or industrial group.
(8/18) [A Chart:] https://t.co/sfBOEMZztR

According to the data published by the commerce & industry ministry – of the 15,946.32 acres allotted to APSEZ, only 8,287.44 acres (51%) were being utilised for processing; the rest (49%) of the land was lying unutilised.
(9/18)

The state govt has denied environmental clearance to the Kandla SEZ (not owned by Adani) under the CRZ(costal regulation zone) while allowing the Mundra SEZ to go ahead even though it didn't had environmental clearances.
(10/18)

Gujarat has made money off the port venture, earning at least ₹200 cr in 2006 for the sale of an 8.6% stake in APSEZ, That price amounted to 14 times more than the state government paid for the shares in Mundra port.
(11/18)

Growth < Debt:

Adani’s growth has been exploded in last 15 years, funded extensively by banks. In 2006-07, the group has revenue of ₹16,953cr and debt of ₹4,353cr. 

By 2012-13, revenues stood at ₹47,352cr and debt at ₹81,122cr.
(12/18)

The extraordinary growth has given rise to persistent charges that the state has favoured his group. 

The CAG has flagged two instance where the Guj govt extended undue benefits to the Adani group. First between 2006-09 & second between 2009-12.
(13/18)

1. Gujarat State Petroleum Corporation bought natural gas from the open market and sold it to Adani Energy at a price lower than purchase price; CAG says the company received an undue benifit of ₹70.5 cr.
(14/18)

2. Gujarat Urja Vikas Nigam recovered a penalty of ₹79.8cr from Adani Powder for its failure to supply powder between 2009-12, against the CAG’s calculation based on powder purchase agreement, of ₹240 cr.

i.e. Guj govt overlooked his remaining penalty of ₹160cr.
(15/18)

When Modi took office in 2014, Adani’s net worth was $7.1 billion, today his net worth is $88.3 billion.

He has covered all most every businesses in last 8 years which the government want to amplify.

List of business covered by the Adani group since 2014.👇
(16/18) [Screenshot] https://t.co/2t05Enr2LV

Some of the major bids, contracts and project bagged by the Adani Group since Modi came in power.
(17/18) [A Chart] https://t.co/z77RNj1ei4

Adani’s rapid growth is fully funded by the governments loans and bonds. He has total outstanding debts of $30 billion. Despite that government waived Adani’s 4.6lakh crore loan since 2014.
(18/18) [Two screenshots] https://t.co/FqZfA8LAGw
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