HIT Exclusive Story: From October 2019 Archives
Jagan Mohan Reddy: The Eraser
Jagan Mohan Reddy is in a hurry to undo the legacy of his predecessor
FROZEN IN THEATRICAL poses next to the young and the old, YS Jagan Mohan Reddy basks in the soft focus of mass-produced blandishments that herald a new era in Andhra Pradesh. In the posters, he takes cover under the watermark of empathy and never quite meets your eye. The quiet smile and the classic high cheekbones betray none of the anxiety of a gladiator who became king. In the four months since the Yuvajana Sramika Raithu Congress Party (YSRCP) surfed a wave of popular sentiment to claim 151 seats in a House of 175 and 22 of the 25 Lok Sabha constituencies in the state, Reddy has moved double-time to deploy his reformist narrative and to build enough momentum to shatter the lens of cynicism through which he is regarded by economists, political strategists and policy wonks. “Jagan Mohan Reddy has no patience. He wants to bring about major change and he wants to do it now,” says Municipal Administration and Urban Development Minister Botcha Satyanarayana, copping to a hero complex that has led the Opposition to question the volatility of the new Chief Minister. “Senior colleagues have advised him to take it slow, but he is fearless. He is at an age when he can afford to be,” Satyanarayana says. Reddy, 46, launched his “course correction manoeuvre” by tearing down a government building next to the outgoing Chief Minister N Chandrababu Naidu’s residence on the Krishna riverbank in Amaravati and serving him an eviction notice. “It is not a move that has endeared us to the media but it was important to send the message that this government would not allow anyone to flout the law,” says Satyanarayana.
Ezra Pound’s slogan—‘Make it new!’—of renewal has taken on a literal meaning in Reddy’s Andhra Pradesh. Big-bang decisions by the government, including the annulment of power purchase agreements signed by the previous regime, fresh bids for the Polavaram project, policy rollbacks, probes into cold cases involving senior Telugu Desam Party (TDP) leaders, and a Judicial Preview Bill to scrutinise biddings for projects valued at over Rs 100 crore—brought in explicitly to root out “corruption institutionalised by the TDP”—have hit the Opposition where it hurts the most. In the process, Reddy has revealed a Naidu-sized chink in his armour that the Opposition has been quick to latch on to. The party has
alleged that the government, not content with taking the wind out of their sails, is brewing a storm to sink the boat. Ahead of a TDP rally to protest the alleged harassment and eviction of its cadre from historically partisan villages in Guntur district, the party brass were put under house arrest and a few other leaders unceremoniously rounded up. Two news channels perceived to be sympathetic to the Opposition were taken off the air. The day after former TDP Speaker Kodela Sivaprasad ended his life, with several opprobrious charges to his name including one that he stole furniture from the Assembly, Kesineni Srinivas, a senior TDP leader, businessman and Vijayawada MP, told Open that the party does not begrudge their more cautious colleagues who jumped ship to the BJP. Rajya Sabha members TG Venkatesh, Y Sujana Chowdary, CM Ramesh and Garikapati Mohan Rao were the first to quit, sending ripples through the party cadre. “Kodela was a victim of tyranny and he may not be the last one. But we will bounce back from this situation. We have 70 lakh karyakartas and a pyramid structure that has stood the test of time,” Srinivas said. “Jagan Mohan Reddy may threaten us with character assassination but he cannot overlook the TDP’s legacy.”
Indeed, the new Chief Minister finds himself entangled in the history he sought to evade. Nowhere is this more evident than in Amaravati, the stillborn capital city where the seams of a grandiose cosmopolitan fantasy are unravelling. Under the new regime, Amaravati is a ragged ghost town where the earthmovers have gone quiet in the shadow of the mountains of excavated red earth and land values have crashed. “Obviously, the capital is not one of our priorities,” says Satyanarayana, even before I can ask. “We have stalled works that hadn’t taken off and constituted committees to look into the progress of buildings that are under construction—it is easily the most challenging job I have had,” says the former APCC president who held several portfolios in YS Rajasekhara Reddy’s cabinet. The YSRCP and the TDP had locked horns over locating the capital in a small town on a floodplain and building a megacity for 40 million people at the cost of Rs 1 lakh crore. The Jagan Mohan Reddy government has no plans to relocate the capital, Satyanarayana says. “For now, we are stuck with the decisions of the previous government,” he adds wryly. “The Capital Region Development Authority (CRDA) had kept contractors’ bills pending since December. They total Rs 2,800 crore—besides the Rs 3,500 crore owed under urban development across the state. A sum of Rs 2,060 crore borrowed by the CRDA was actually diverted to the TDP government’s Pasupu Kumkuma scheme (a Rs 10,000 monetary aid provided to 98 lakh rural women that was aimed at improving their livelihood) ahead of the polls. As for the Rs 6,300 crore that has already been spent on the capital, we have nothing to show for it except three high-rises and MLA quarters.” In the course of deflecting blame, the state has also deflected lenders who had committed to finance the project. In July, the World Bank went back on its $300 million commitment to finance basic infrastructure, roads, water supply, sewage and drainage in the capital region, citing environmental concerns. Shortly thereafter, the Beijing-based Asian Infrastructure Investment Bank, too, withdrew its support to Amaravati, effectively imperilling the future of the project in a state that is already staring at an economic slowdown. Finance Minister Buggana Rajendranath Reddy pegs the state’s total outstanding liabilities at Rs 2.61 lakh crore, of which Rs 1.97 lakh crore alone is public debt.
While a frost blows across the capital city, rural Andhra Pradesh is gearing up for the makeover it was promised. On Gandhi Jayanti, the state embarked on an ambitious mission to bring public services to the doorstep via 11,158 rural secretariats and 3,786 urban ones. An unprecedented 1,26,728 people, chosen from the 19 lakh aspirants who appeared for special examinations, have been recruited to man these secretariats, expected to be operational by the year-end. The governance initiative is momentous for the opportunity it gives rural youth to get on the middle-income orbit, and equally for Jagan Mohan Reddy, who has made history by expanding the government workforce by a fifth of its present strength in just four months. The move also waters down the power thus far concentrated in the hands of MLAs. “Already, some legislators are disgruntled that they are being sidelined. They are not just being monitored for corruption, they are also being made irrelevant in ways they never expected,” says a source in the Secretariat who has worked under Reddy for over a year. “For all the talk of decentralised power, this government wants to concentrate all the power in the hands of one man,” he adds. “Most ministers do not have direct access to the CM. And if one gets an audience with him, he’d better leave his personality at the door.”
AS A CONSOLATION, however, a shadowy system of village volunteers—one for every 50 households—who will be paid a stipend of Rs 5,000 a month to act as intermediaries between citizens and secretariats, has taken root. Over three lakh young volunteers, who may well be karyakartas handpicked by YSRCP MLAs, stand to benefit from the programme, billed as a progressive alternative to the TDP’s unemployment dole. “This is a new level of madness even for Jagan Mohan Reddy,” says Nara Lokesh, Chandrababu Naidu’s son, who was minister for IT, Panchayati Raj and Rural Development in the TDP government. “I get that he wants to prove himself better than us. Why then has he done away with not just infrastructure projects but also sensible welfare schemes, like unemployment benefit, aid to women’s self-help groups, farm loan waiver and the free sand policy? Yet, it is the TDP that gets labelled as pro-capitalist and Jagan Mohan Reddy, who faces 11 CBI cases on charges of quid pro quo and other malpractices, brands himself the saviour of the people,” Lokesh says, on the heels of a TDP meeting in Guntur where it was agreed that 33 per cent of party posts would henceforth be reserved for women as well as for youth, and 50 per cent for the weaker sections of society. “After analysing the election results, I can say one thing: where we did well in numbers, we failed at chemistry. We doubled the per capita income of the state but failed to counter the region and caste politics of the YSRCP. We could not attract youth because of our legacy issues.”
Jagan Mohan Reddy believes he has cured the state of its collective Stockholm Syndrome towards the TDP, says a top bureaucrat. “He is anxious to prove himself worthy of the trust people have placed in him. It is a high-pressure job.” To unpack his personality, one must look at his 3,648-km padayatra that helped him capture power, says retired IAS officer K Prabhakar Reddy who had worked closely with YSR. “It was a voyage of discovery, yes, but also one of extreme hardship for a boy born with a silver spoon,” Reddy says. Accused by the CBI of accepting Rs 1,172 crore from investors as bribes in return for favours from the state government, Jagan Mohan Reddy spent 16 months in judicial custody—a formative period, according to Prabhakar Reddy. “He felt wronged and he set out to show the world that he was the right man for the top job in the state. The determination he displays now is born of a great deal of struggle.”
The doves and the hawks within Reddy’s own party concur that he has set out to square a circle. “His priorities are straightforward—implementing pre-poll promises, especially the Navarathnalu schemes. He is very strong-willed about them,” says YSRCP leader Ambati Rambabu. Modern-day versions of YS Rajasekhara Reddy’s landmark welfare programmes, these include a financial aid of Rs 12,500 a year to farmers aside from crop insurance premium, a health insurance cover of Rs 5 lakh besides covering all medical expenses over Rs 1,000 under the Arogyasree scheme, fee reimbursement for students, reviving irrigation projects, construction of 25 lakh houses, waiving loans to self-help groups, an assistance of Rs 75,000 over the course of four years to people from BC, SC, ST and minority communities above 45 years of age, a Rs 15,000 reward to women who send their children to schools, and prohibition. On October 1st, the government took control of the 3,500 liquor shops across the state as a first step and shortened their working hours, setting the stage for gradual erosion in excise revenue. The other schemes could meanwhile involve an additional outlay of Rs 40,000-50,000 crore a year—a daunting figure for a state that inherited a revenue deficit of Rs 16,000 crore when it split from Telangana—and it is unclear how the government will find the money.
LIKE A SUPERhero who cannot arc too far from his origin story, Jagan Mohan Reddy wants to leave a mark on the state while not straying from the political legacy of his father, the Chief Minister who trumped the TDP twice with his pro-poor stance and his winking, megawatt charm. Even more than Chandrababu Naidu, it is to him that Reddy owes his frames of reference, his identity, and his aspiration. Given the wretched fiscal health of the state, however, it is not easy to defend an expansionist welfare agenda and the projected increase in emoluments after the merger of the AP State Road Transport Corporation (APSRTC) with the government, subsuming its 53,261 workers, and the hike in the salaries of Anganwadi workers. “We came to power on a big mandate. We could have revelled in the victory, but the Chief Minister has been anxious to see action from day one. He has kept us working well into the night and asked us to liaise with the bureaucracy to speed up implementation. He is fully aware that by trying to right the ship, he has put his reputation as a first-time administrator on the line,” says Krishna Duvvuri, special secretary to the Chief Minister, and in his mid-30s, possibly the youngest of the lot. An air of quiet industry pervades the Interim Government Complex at Velagapudi, where a team of about 35-40 advisors—retired bureaucrats, young professionals, industry experts and other loyalists—helps keep the government in the Goldilocks zone. Health and education are the portfolios close to the Chief Minister’s heart, Duvvuri says. “He believes that if we do not fix our Gross Enrolment Rate for primary schools, which is just 84.28 per cent compared to the national average of 99.21 per cent, right away, we will be very sorry.” A finance professional—his father, DA Somayajulu, had helped YSR draft Arogyasree and a free power scheme for farmers in his capacity as former advisor, economic affairs and policy implementation—Duvvuri worked on the Jagan Mohan Reddy Government’s energy policy, which has provided much tinder for controversy. Called out for summarily cancelling power purchase agreements (PPAs) entered into by the previous government, Reddy received an advisory from Union Power Minister RK Singh warning him not to send “wrong signals” to investors that the state was diverging from India’s commitment to climate change. Globally, the renewables sector works on the basis of fixed tariffs that remain the same over the life of the plant, Singh pointed out. The state government, however, has stood by its stance that the PPAs were negotiated at high tariffs, burdening the state’s finances.
“Power is not a subject where the Centre can overreach, overlooking ground realities,” says Ajeya Kallam, a former chief secretary to the Chandrababu Naidu government who has come back from retirement as principal advisor to the Chief Minister. “As far back as in 2016, when I was finance advisor to the government, we decided that long-term PPAs did not make sense anymore because energy prices were falling. How can the TDP government justify entering into 25-year contracts at nearly Rs 5?” Located next to the Chief Minister’s chambers, Kallam’s light-filled office is a space where ideas metabolise into history, one government order at a time. The authority that a cabinet rank brings to his post is unmistakable. Officials, including Rajat Bhargava, Principal Secretary, Industries, Infrastructure, Investment and Commerce Department, purposefully stride into the room bearing files, only to be quietly motioned into chairs as Kallam, said to be Reddy’s closest aide in the Secretariat, offers an explanation for why he thinks the government “has done nothing wrong from the people’s perspective” even if the media has taken a rather uncharitable view. He has a suffer-no-fools way about him, balanced by a gentle, confiding tone. “The other day, we had a meeting with the Chief Minister about how to deal with our enemies. The top five are media houses, he joked. We honestly did not put in place a strategy to deal with the backlash to some of our radical policies,” Kallam says.
No other state in India has trained as keen an eye on social equity, claims Kallam. “Others may well follow suit. We have introduced 75 per cent reservation in private sector and PPP project jobs for locals, 50 per cent reservation for women and for SC/ST/BC in nominated posts, and regulation of school fees besides a commission to monitor the facilities and infrastructure,” he says. Kallam credits Jagan Mohan Reddy as a “man of socialist principles” who may yet mature into an astute politician in his father’s mould. “YSR had a devil-may-care attitude—he took responsibility for tough decisions made by bureaucrats and told the media to write whatever they wanted,” Kallam says. Reddy, on the other hand, has trust issues, say sources in the Secretariat. V Vijaysai Reddy, family loyalist, Rajya Sabha MP, and the Chief Minister’s special representative in Delhi, is the number two man, advising him on Centre-state relations and party finances. “But there is a lot of distance between No 1 and No 2,” says a newspaper editor in Vijayawada, declining to be named. “Some of the officers Jagan Mohan Reddy has chosen to surround himself with were accused in the quid pro quo cases along with him. LV Subramaniam, accused in the Emaar property scam but later acquitted by the High Court, has been retained as chief secretary. Retired IAS officer M Samuel, named in one of Jagan’s disproportionate assets cases, has been put in charge of Navarathnalu,” the editor says. “Jagan has always been a capricious man. He hired a special team to deliver an English language news bulletin on Sakshi TV, but just when things were falling into place, he let go of them. He has been playing a similar game of musical chairs with bureaucrats.”
It doesn’t help that the government is admittedly “going through hell”. “Chandrababu Naidu left us not just a pile of debt but also arrears to the tune of Rs 50,000 crore. We have cleared about Rs 25,000-30,000 crore so far,” Kallam says. As for the infrastructure project delays, they will be well worth it, he says. “We are committed to reducing costs without losing time. With the flood season ending in November, we will start work on Polavaram immediately. The project will be ready by 2021.” Revenues, predictably, are the biggest concern. “The sand regulation policy should net us Rs 2,000-3,000 crore. We are looking into fixing leakages in GST. If strapped for funds, we may monetise the not-so-useful assets. A thousand acres of land in and around the capital can be sold away, for instance,” he says.
THE PROBLEM WITH socialism, as Margaret Thatcher put it, is that sooner or later you run out of other people’s money. By running a tight ship, the Jagan Mohan Reddy government risks scaring away businesses accustomed to being wooed with incentives, large land pools and approvals at the blink of an eye. “From the perverse incentive raj of the TDP, we want to return to old-school industrial policy,” Kallam says. “Industry can see that we are more transparent. Instead of giving them a subsidy, for instance, we would rather put in some equity. It is not our style to brag—we prefer to work quietly, but there is a lot happening. We are in talks with Honda, Jindal, the Shriram Group and other big players, but we want to focus equally on MSMEs.” While Chandrababu Naidu had gone to town about HCL Technologies, the Asia Pulp and Paper Factory, Kia Motors and other investments even before they could materialise—the paper manufacturer has fallen out of favour under the new regime, which may rope in the Aditya Birla Group instead—Jagan Mohan Reddy is yet to announce upcoming investments to the tune of Rs 1 lakh crore in Visakhapatnam alone, Rajat Bhargava says.
“For the TDP, investor relations began and ended with incentives and photo-ops. Our Chief Minister is not interested in being seen with corporate leaders,” says Minister for Industries and Commerce and Information Technology Mekapati Goutham Reddy, alleging that the TDP government had promised Rs 4,000 crore in incentives to industries, failing to develop the infrastructure they needed. “A tyre manufacturer who had set up shop in the state is ready for production, but there is no water supply allocated to them. We have to tap into an irrigation channel now to provide water,” he says. “I know we don’t talk enough about what we are doing,” Goutham Reddy says, on the sidelines of a skill development seminar. “We are keen on sunrise industries, like electric vehicles, and I am in discussions with Softbank, which has expressed interest in investment in what could be a pioneering EV cluster in India.” The long-term industrial growth plan, he says, is to develop Anantapur and Nellore as spillover clusters of Bengaluru and Chennai.
As Sophocles said, one must wait until the evening to see how splendid the day has been. For Jagan Mohan Reddy, the day has only just begun.