Real estate alone does not make for thriving economy

Kumar Ketkar, Congress MP and veteran journalist, is of the view that the current dispensation has little knowledge or understanding of primary and secondary economies in the country which create jobs. The primary economy is related to agriculture and it is quite obvious that both the Centre and the state are clueless about farmers’ issues. Loan write-offs, minimum support prices, their deposits in co-operative banks have all been messed up by both the governments who have failed to understand how this sector dovetails into the secondary economy – seeds, fertilisers, the plants required to manufacture the fertilisers, the steel required to set up those manufacturing plants – everything has a correlation that the government has not heeded.

All that they do understand is the tertiary sector of real estate and builders, says Ketkar, where returns seem more visible, but which could also go into cold storage if the first two sectors fail to thrive or take off. I am beginning to be convinced by his theory for I notice that at least the Maharashtra government has been chasing after the infeasible, simply because the returns seem tangible, even if it means the infrastructure comes at a heavy price to the common man. The greatest example of this is the non-starter project of the Samruddhi Expressway from Nagpur to Mumbai where farmers are being compelled to give up their fertile land en route that will keep them earning for generations for compensation amounts that may seem generous today but will not stand the test of time and inflation.

Recently, someone in the know told me the project was unlikely to benefit any manufacturer either, for there was not much manufacturing to write home about on the route of the expressway and whatever manufacturing does exist was well taken care of in terms of transport to other industrial hubs and export outlets. But what he said next horrified me more.

‘‘All that the Samruddhi Expressway is aimed at is to give a lifelong source of earning through toll collections to....” he named a capitalist crony of the government who has been showing undue interest in the project’s take-off.

“But it is now unlikely to happen, except as small tolled stretches of roads, because the government has tried hard but been unable to raise the funds for such a huge project. Even presuming cash cows like Cidco are willing to lend, it will still not make up the shortfall in funds for this project.”

Obviously, Cidco is indeed a cash cow being milked for all sorts of crony capitalist interests if senior Congress leaders, including former chief minister Prithviraj Chavan, are to be believed. Last year, Chavan derailed the Samruddhi Expressway by exposing high corruption in the office of the MMRDA, which had been tasked with building the expressway. The alleged nexus of at least one other minister with private builders had also been exposed. Now, Chavan has brought similar allegations to the doorstep of the chief minister by exposing the sale of farmers’ land worth more than ₹1,700 crore earmarked for a park in Navi Mumbai, at a price of just three-odd crore rupees. The land was not denotified by Cidco, which was tasked with its development and naturally the question arises why the chief minister, who is also the urban development minister, was so benevolent on a private developer at the cost of farmers and the common people.

While the Congress has demanded a judicial probe into the near gifting of this prime property to the builder, it proves Ketkar’s contention. There are only three industrial-scale projects launched in the past four years, of which two seem jinxed and non-starters – the refinery in Ratnagiri, which is being opposed by the Shiv Sena and the Rafael project promoted by the ADAG group at Multi-modal International Cargo Hub and Airport at Nagpur (MIHAN) in Nagpur. The third – a food park being set up by Baba Ramdev’s Patanjali, seems the only one on stream, though even that is mired in controversy of a sweetheart real estate deal as now is the Navi Mumbai project. However, only Patanjali seems set to benefit farmers and create jobs for the common man. The rest are as yet mere real estate deals, proving Ketkar right about the government’s focus on the tertiary rather than primary economic interests.