The rise of the mining business of the Reddy brothers is a saga of crony capitalism and the close nexus established with politicians and pliant bureaucrats. By bending laws, getting new regulations and enactments to favour them and by blatant violation of forest and environmental rules, the Reddy brothers became a major beneficiary of the Rs 4,000-crore annual profits being reaped through the export of iron ore, taking advantage of the boom in the international iron ore prices due to the huge demand for it in China (the price of a tonne of iron ore shot up from Rs 200 to Rs 2,000).
This plunder, connived with the state, saw the government getting a royalty of only Rs 27 per tonne when the price it was being sold at was Rs 2,000. In 2005-06 alone, 35 mine owners got Rs 3,600 crore in profit. It is this ill-gotten wealth and assets which the Reddy brothers deployed effectively for the BJP. The Reddy brothers have not been shy of flaunting their wealth and influence. One of them is reported to have said during a heated exchange in the assembly last year: "People say we are worth Rs 100 crore. I want to correct it…. we are worth Rs 1,000 crore."
what mr.karat fails to mention is that the so-called reddy brothers funded or financed the congress party too in andhra pradesh. now it's gradually dawning on mr.karat's party which had been a part of an all party fact finding committee which had visited the mines leased out to the brothers in anantapur district of andhra pradesh sometime during 2004-05. his party members from andhra pradesh had not found anything irregular in the company's activities back then- was it because the congress was an ally? now it turns out ysr was one of the gaali or reddy brothers' biggest sponsors and also a major partner, perhaps.
crony capitalism is too poor a description. the same robber barons supporting the bjp in karnataka and the congress in andhra pradesh: we should let sonia gandhi or l.k.advani, both of whom have benefitted from their partymen's association with the reddy brothers, decide on a better phrase. i don't find anything particularly incongruous in the fact that the reddy brothers financed both parties: they both represent the same braminized classes, or hindutva family, if you like, in my view.
this recent turn of events has a lesson or two for both those politicians: the next time sonia gandhi decides to unleash a battery of spokesmen and crony mediamen to target mayawati's extravagant spending on statuary it'd do her a lot of good to check how many dozen times more her favourite chief ministers are stealing (not spending publicly, subject to all public checks, like mayawati) from the public in their own states. and l.k.advani has to admit gaali janardhan reddy is much more of an 'iron man' than he ever will be.