The Reddy Republic

By Rajdeep Sardesai
03 August 2010 19:41 IST

When Karnataka's infamous Reddy brothers make their Diwali gift list this year, they might consider sending a large present to Congress president Sonia Gandhi. Had Mrs Gandhi not chosen the traditional Congress bastion of Bellary as a safe constituency alternative to Amethi in 1999, the Reddy brothers may well have disappeared into the wilds of central Karnataka. That election changed their career graph, transforming them from small-time chit fund operators to unquestioned mining kings to de facto rulers of the state.

Sonia's entry into the Bellary poll fray drew BJP's mascot Sushma Swaraj into the battle. The Reddys became Mrs Swaraj's poll managers and won her trust. The rest is now part of Karnataka political folklore, their rise exemplifying the ultimate triumph of contemporary political robber barons.

If Sushma Swaraj was their original political benefactor, then the 2008 Beijing Olympics was their passport to the big money league. As the Reddys expanded their mining business, Beijing increased its appetite for iron ore. Incredible profit margins from overloaded trucks -- estimated to be around Rs 20 crore per day-began to multiply as the Reddys acquired more mining leases. Mining, in a sense, was ideally suited for the Reddys vaulting ambitions. Poorly regulated, still run through discretionary licenses and government largesse, mining leases could be obtained through a mix of local-level muscle and manipulation.

The Reddys were clearly adept at both. In the process, they have overturned the traditional rules of Indian politics. Conventional wisdom suggests that caste is the key determinant of political power.

The rise of the Mandal forces has accentuated the belief that social engineering is critical to building a political base. Then, whether it be the Yadavs of the Hindi heartland, or the Dravidian parties in the south, caste loyalties are seen to be the defining badge of political mobility. In Karnataka too, the Lingayats and the Vokkaligas have emerged as the main competitors for backward class dominance in the state's caste cauldron. The Reddys have changed the rules of the game.

The Reddy brothers - Karunakara, Janardhana, and Somasekhara - are originally Andhra Reddys, with strong ties to their home state. In Karnataka, the Andhra Reddys number only a few lakhs, making them a marginal vote bank. But what they didn't have in votes, the Reddys have more than made up with 'notes'. By building a vast treasure chest through their extensive mining operations, they have created a situation where money power is a substitute to caste power.

In a sense, they have almost rendered caste irrelevant, creating the basis for a new form of post-Mandal politics. Today, more than 60 MLAs in the 117 member BJP state legislature party owe allegiance to the Reddy brothers. It is believed that in the 2008 elections, the Reddys 'sponsored' at least 75 candidates. When the BJP needed independent MLAs, the Reddys 'organised' the support. Last year, when the Reddys virtually challenged chief minister's BS Yeddyurappa's authority to appoint his Cabinet, they succeeded in reducing him to tears on national TV.

This year, they have already forced a resignation of the Lok Ayukta (since taken back) and openly confronted the state governor. Whether it is the transfer and appointments of officials or granting government contracts, the Reddys run Karnataka as extra-constitutional figures heading an independent 'Reddy republic'.

In the process, they have also shown just how far the BJP has moved from its claim of being a 'party with a difference'. That the party's central leadership appears helpless to rein in the Reddys only confirms the weakness of a political order where desperation to retain power leads to compromising on basic principles.

Karnataka, after all, was to have been the saffron forces 'gateway to the south'. The party simply could not afford to let it go. If that meant winking at instances of obvious corruption and a flourishing illegal mining business, then it was seen as a small price to pay. But why blame the BJP alone?

The Reddys business empire has been remarkably politically neutral. The Congress's regional satrap, the late YS Rajshekhar Reddy gave his Karnataka bretheren mining leases in Andhra Pradesh. To stay ahead of the system, the Reddys were freely allowed to change the boundaries of their cross-border mines, even acquiring vast tracts of land well beyond the original lease.

Without YSR's benevolent gaze, the Reddys could not have spread their businesses so widely across two states. In Andhra, YSR patronized them, in Karnataka the BJP legitimised them.

In a way, their phenomenal growth story - their father was a local head constable - is inspiring similar stories across different states. If in Karnataka it is mining that is seen to provide the vast riches that are needed to acquire political control, in neighbouring Maharashtra, real estate provides a similar opportunity.

For example, in the last assembly elections in Maharashtra, more than half the candidates of the major parties in Mumbai and Pune listed construction as their main source of their income.

If the mining mafia rules Karnataka, the builder lobby now runs urban Maharashtra. The modus operandi is similar. Set up a potentially cash-rich business and get into a benami partnership with an influential politician. Use the political patronage to acquire large projects.

Once a sizeable corpus is created, distribute the wealth in a manner that you are able to subvert the legal system by bribing and manipulation. A stage is reached when the political class becomes dependent on you. At that moment, you have the choice of becoming a neta and using money power to literally 'buy' your way to the top. That's exactly what the Reddys did in Karnataka.

That's what many other aspiring political entrepreneurs are attempting in other states.

Post-script: The Reddys latest project is to set up a Kannada news channel. Like other far-sighted netas, they too have realized that the best way to control the media is to take it over.
Disclaimer: Views expressed above are the author's own.

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Rajdeep Sardesai

One of India’s most respected journalists, Rajdeep Sardesai, has nearly three decades of journalistic experience in print and tv. He has been the founder- editor of chief of IBN 18 network, which included CNN IBN. Prior to setting up the IBN network, he was the managing editor of NDTV 24 x 7 and NDTV India. Rajdeep has won more than 100 national and international awards for journalism, including the Padma Shri in 2008. He is currently consulting editor at the India Today group.

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A very elucidative article from Rajdeep Sardesai whom I have always appreciated for his in depth studies.

Mr. Sardesai, this tiny state of Goa will offer you smaller on scale but bigger entanglement of Governments, environmental degradation (inversely proportional for Goas small size)and mining industry.

Please do it for the sake of your ancestry.

- Kalidas Sawkar, Panaji Goa | 10 th August 2010 17:45


Hats off to to Mr. Rajdeep Sardesai for being so forthright in writing about the Mining menace!

The Mining Barons have acquired the clout to make or break any Government any time! You see that in Karnataka and also in Goa! These Reddy brothers are found everywhere- where there is mining! We request you Mr. Rajdeep Sardesai to spare some of your valuable time to expose the Reddy brothers of Goa- where the mining is making the life of the locals miserable in every sense of the term and causing irreversible damage to this beautiful Lord Parashurama's Land!

- vishwas prabhudesai, loliem | 04 th August 2010 10:09


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