Anti-corruption crusader risks wrecking Indian tax reform

Subramanian Swamy says GST would not help country's economy but fighting corruption would

NEW DELHI: An anti-corruption crusader in Indian Prime Minister Narendra Modi's party has vowed to send opposition leaders Sonia and Rahul Gandhi to jail, denting already faint hopes of political compromise on a key tax reform.

Fresh developments in a three-year-old fraud case brought by Subramanian Swamy have overshadowed attempts to bridge the political divide in search of an elusive deal that would create a tax union in Asia's third-largest economy.



India's Congress party chief Sonia Gandhi (R) and her son and vice-president of Congress Rahul Gandhi attend the Congress Working Committee (CWC) meeting in New Delhi on May 19, 2014. PHOTO: REUTERS

For Swamy, taking down a dynasty synonymous with the founding of modern India is a bigger immediate priority than passing a Goods and Services Tax (GST) that has in any case been years in the making. He says he has the tacit support of Modi, and the powerful finance minister has also voiced his approval.

Swamy, who has said the mother and son deserve to go to jail, told Reuters in an interview that the GST would not help the economy. Fighting corruption, which he says has drained $1.5 trillion out of India, would.

"The cause I am fighting for is far greater because that's where the cancer is," said the 76-year-old Harvard-trained economist and ex-cabinet minister, whose strident Hindu identity politics has attracted a fanatical following.



Swamy met Modi on Thursday and said the prime minister voiced no objections to his case against the Gandhis. Senior aides to Modi say that he sympathised with the case. "Modi-ji has always wanted to pursue legal cases against the Gandhi family," said one. "This case could end the Gandhi supremacy, and that is good for us."

Modi has tried to undermine the Gandhis since trouncing Congress at the ballot box last year. At the same time, he has pushed for economic reforms, including the GST, which the government says could add up to 2 percentage points to the size of the economy.

In his case, Swamy accuses the Gandhis of fraud, cheating, misappropriation and criminal breach of trust in acquiring the assets of a company that had published a newspaper founded by Rahul's great grandfather, Jawaharlal Nehru.

He alleges that, through a series of debt and equity deals, a shell company that Sonia and Rahul controlled acquired property worth about $300 million after paying just $75,000.

The Gandhis deny wrongdoing and allies say the deals caused no financial harm to the Congress party.

Swamy vs Gandhis

Irked by Swamy, Congress lawmakers have accused Modi's government of waging a "political vendetta" against the Gandhis. Parliament's upper house, where Modi needs Congress support to pass the GST, has been disrupted all of this week.

While there are still a few days for GST to be passed and it has been listed for debate next week, the angry mood in Congress and daily protests mean chances of that happening are fading.

Congress national spokesman Sanjay Jha said the political wrangling had "neutralised" Modi's meeting with Sonia Gandhi on November 27, their first since he became prime minister in May 2014, to seek a way forward on the GST.



Swamy, who merged his small political party with Modi's in 2013, is best known for successfully running a legal campaign against the last Congress government over a multi-billion-dollar spectrum-allocation scam.

In a blog post late on Thursday about the case, Finance Minister Arun Jaitley backed Swamy and criticised Congress for disrupting parliamentary business because of it. "By disrupting democracy, the financial web created by the Congress leaders cannot be undone," he wrote.

A judge had first summoned the Gandhis last year. They appealed to the Delhi High Court, which this week quashed their plea seeking exemption from a personal appearance. The judge hearing the case has opined that it "smacked of criminality".

They have been summoned to appear on December 19, at which they would either face detention or have to post bail, unless India's Supreme Court intervenes. Parliament's winter session ends four days later.

Congress says the timing of the court's action has been influenced by politics, but Modi's Bharatiya Janata Party (BJP) denies this.

"If they don't turn up, issue a warrant and send them to jail," Swamy said in the book-lined study of his South Delhi residence, where case papers were scattered across his desk. "(It) is a total open and shut case. They are suffering from hubris."