A Modi myth called GSPC

Nirmal Sandhu

Though this book is essentially about the controversial functioning of Gujarat State Petroleum Corporation when Narendra Modi was the Chief Minister of Gujarat, it also throws light on the governance style of the man who now occupies the country’s most powerful post.

GSPC was cited as an example of the successful Gujarat Model that the BJP and Modi sold to the country through a largely compliant, unquestioning media. This book provides enough credible material to challenge the foundations of that model. 

The Gujarat Model has been discussed threadbare by now but the book offers a comprehensive picture of a State enterprise which was used by BJP spin doctors to project Modi as a prime ministerial candidate who can deliver at the national level the way he has done in Gujarat.

On June 26, 2005, Chief Minister Modi announced that GSPC had made “the biggest discovery of its kind in the country’s history, with estimated natural gas reserves of 20 trillion cubic feet worth $50 billion in the Krishna-Godavari basin”.

This is a typical Modi hype. The truth, as the books puts it, is despite this history-making discovery, GSPC has never made any money and it has rather bled the exchequer. This projected symbol of “economic resurgence” has turned out to be a big scandal.

Eleven years after the historic Modi announcement, the CAG’s 2016 report, tabled in the Gujarat Assembly, raised objections which, in simple terms, said: “Why was the corporation running up debts and where was the company blowing these all up?”

With its assets gifted away to questionable private enterprises and individuals and debts mounting, GSPC stood as a basket case in 2016. By then fully in control of Central institutions and PSUs through appointments of loyalists, the Narendra Modi government then forced a cash-rich ONGC to buy a majority stake in GSPC.

 This kicked up a row in media and opposition leaders, including Jairam Ramesh, too, joined in. They made valid arguments but BJP media managers succeeded in spreading confusion. A former Economic Affairs Secretary, EAS Sarma, wrote to the Enforcement Directorate that “valuable oil blocks belonging to the people of India were bartered to foreign nationals of questionable credentials”. He sought an urgent inquiry “as the value of the hydrocarbons involved runs into thousands of crores of rupees and very influential persons are apparently involved”.

Urjit Patel, now Governor of the RBI, was an independent Director and Chairman of the audit committee of GSPC from 2006 to 2013. GSPC’s borrowings were squandered away on his watch. He did not raise the issue of GSPC entering into a joint venture with a private company in which the Gujarat minister in charge of GSPC was an investor. The minister, Saurabh Patel, was a Modi confidant.

 In the light of this background it becomes easier to understand why the RBI under Urjit Patel surrendered its autonomy and toed the government line during the demonetisation drive.

Though the book judges the Gujarat Model largely through the GSPC, Modi’s role in Gujarat’s development cannot be denied, particularly the turnaround of the once ailing power sector. As a crafty politician, Modi did take away more than his share of credit for Gujarat’s fast growth. But it is difficult not to accept the book’s conclusion that the “Gujarat Model of having ‘trusted’ men in key positions is being replicated now on a nationwide scale”.