GMD

Since Narendra Modi came to power in 2014, Baba Ramdev’s company has received more than an estimated $46 million   in discounts for land acquisitions in states controlled by the BJP, according to a review of state government documents and interviews with officials done by Reuters

According to Reuters, Ramdev’s business has boomed since the BJP took power in 1914. Revenues at his consumer goods enterprise are soaring – from about $156 million in the financial year ending March 2013 to more than $322 million in the year to March 2015. In early May, Ramdev said revenues in the financial year just ended had jumped to about $1.6 billion.

A communications firm called Social Revolution Media and Research Pvt Ltd was started by two directors from companies under the Patanjali umbrella, according to corporate filings. It held weekly meetings with the BJP’s information technology division to coordinate messages on Twitter and other social platforms, said Shantanu Gupta, the communications firm’s CEO.

Patanjali’s products range from toothpaste to clarified ghee butter and household cleaning materials. They are found in every corner of the country, from the scantest villages to teeming cities. Its foods, which include rice, biscuits and chutney, are sold in the canteens of India’s security forces and served on some tables in the nation’s parliament.

Since Modi took office in May 2014, Patanjali has acquired almost 2,000 acres of land for building factories, research facilities and establishing supply chains of herbs for its products, according to state land documents and interviews with officials. During the rule of the previous Congress-led government the firm had been selling large tracts of its land holdings. Two of the four acquisitions exceeding 100 acres were in states controlled by Modi’s BJP. A third was in an area where the governing party was in the process of partnering with the BJP.

In the BJP-controlled states, Patanjali received a discount on the land purchased of 77 percent off market prices, according to state government documents, interviews with officials and land values provided by local real estate agents.

Official reporting of land transactions in India is patchy, especially of deals involving smaller acreages. But some do surface. For example, Patanjali received a discount of more than $10 million, or 88 percent, on a 40-acre plot in the BJP state of Madhya Pradesh last year, according to interviews with a state official and real estate brokers.

The largest transaction was a transfer of some 1,200 acres of undeveloped land in the eastern state of Assam in October and December 2014. The deal was struck by the Bodoland Territorial Council, an agency that oversees an autonomous region and is controlled by the Bodoland Peoples Front (BPF). The BPF had broken from a Congress-led coalition in the state earlier in 2014, before allying with the BJP in January 2016. Kampa Borgoyary, deputy chairman of the council and spokesman for the BPF, said the party “had known from the beginning it would support the BJP.”

According to state legislature documents reviewed by Reuters, the land was “allotted without cost” – given free of charge – to Patanjali Yogpeeth, a trust controlled by Patanjali Managing Director Balkrishna and Ramdev, on the condition that it be used for the “preservation and promotion of cow breeds.” The arrangement permitted Patanjali to collect medicinal plants, a vital component for its expanding line of natural products. Borgoyary said the deal reflected the council’s confidence that Patanjali would “protect” the land.

Commercial transactions involving land of this sort are unusual, making it difficult to put a value on the plot.

In Uttar Pradesh, where Ramdev’s company acquired a tract of land not overseen by the BJP or an administration favorable to the ruling party, the savings were smaller: 300 acres of land at 25 percent below market prices in November 2016. The discount was in keeping with standard practice for deals that size, the chief executive officer of the industrial area said.

Neither the prime minister’s office nor Patanjali executives, including Ramdev, responded to written questions by Reuters about the transactions, which were lawful.

Of his role in Modi’s success in 2014, Ramdev said, “It’s not good form to praise yourself.” He added, “I won’t say much, but I prepared the ground for the big political changes that occurred.”

At a stone-laying ceremony for a Patanjali food processing plant in the central Indian city of Nagpur last September, one of the signers of the oath in the Ramdev video, Transportation Minister Nitin Gadkari, made a personal appearance. A video recording of the event showed Patanjali’s Managing Director Acharya Balkrishna turning to Gadkari. “We want a road” leading to the site of the planned factory, Balkrishna said.

From his place on a white sofa, the minister smiled. “This road you’re talking about, I’ve decided to make it a national highway. Once you start your work, we’ll issue a tender,” he said.

Ramdev, who sat between Gadkari and the state’s BJP chief minister, Devendra Fadnavis, laughed and applauded.

Gadkari did not respond to questions by Reuters.

Patanjali had paid some 590 million rupees (about $9.1 million at current rates) for the 234-acre property. The land abuts a special economic zone (SEZ) promoted by the state and its market price was more than 2.6 billion rupees (about $40.5 million), according to comments submitted to the state legislature by Fadnavis.

“The land outside the SEZ was given cheaply to Patanjali because it has not been developed. There is no approach road,” Fadnavis said in a written reply to an opposition lawmaker who questioned the price.

Within half a year of Modi coming to power, his administration transformed an obscure government department of traditional Indian medicine into a standing ministry dedicated to popularizing, among other things, the practice of yoga and the use of ayurvedic products, for which Patanjali is a market leader.

The ministry now regulates many of Patanjali’s products. It has participated in promotional and training sessions with Ramdev and his organization, from online presentations to a mass yoga demonstration with the minister of housing and urban development on New Delhi’s central boulevard.

The Ministry of Finance in 2015 defined yoga as a “charitable purpose,” reducing the associated tax burden. That particularly benefits corporations such as Patanjali that have espoused support for the kind of Hindu nation envisaged by the ruling party. The finance ministry is headed by Arun Jaitley, who was one of the signatories of the pledge before the 2014 elections. Jaitley, Ramdev and other Patanjali executives did not respond to questions about the policy.

Patanjali Managing Director Balkrishna said he and Ramdev started their first enterprise in 1995 as they learned how to make ayurvedic medicines and supplements. They had 3,500 rupees (about $90 at the time) and borrowed 10,000 more.

Balkrishna described the two of them making fires to mix ingredients for chyawanprash, a traditional jam, and then carrying vats of it home on their heads – neither had the money for a rickshaw ride.

Today Ramdev is the public face of the company that he and Balkrishna founded, looking down from billboards across India. Aditya Pittie, who runs one of Patanjali’s largest distributors, calls Ramdev the “super boss.” Yet current corporate filings make no mention of him. Ramdev’s name did appear on a document published by the company on its website in 2011. Dated from 1999, it showed Ramdev signing as the president of one of the firm’s trusts. Three years prior, his signature appeared on a balance sheet of the same trust. Ramdev told Reuters he’d given signing authority – permission to sign on his behalf – to Balkrishna.

Balkrishna pointed to the plain slippers on his feet. They had cost 400 rupees (about $6), he said. Neither he nor Ramdev collect salaries, he added. Balkrishna’s net worth was estimated at $2.5 billion last year by Forbes, making him the 48th richest Indian in a nation of some 1.3 billion people. Nothing is known publicly about Ramdev’s assets.

A Reuters review of the financial filings of dozens of Patanjali companies found large dividend payments to Balkrishna, Ramdev’s brother Ram Bharat and other owners. In one company, Balkrishna and minority shareholders received about $18 million in five years. In another company controlled by Ramdev’s brother, dividends declared one year amounted to 60 percent of profits. Balkrishna told Reuters that dividends were used to repay original investors: “I took money out of the company in the form of dividends to pay them. So today our company is neat and clean.”

Read the full article: http://in.reuters.com/article/india-modi-ramdev-idINKBN18J1HJ

Advertisements