Adani-Hindenburg saga: The real risk to Modi is not the Opposition | The Financial Express

Adani-Hindenburg saga: The real risk to Modi is not the Opposition

In the allegations against the Adani Group, Opposition parties sense a repeat of what the UPA faced in the run-up to the 2014 elections. For Modi, though, that is the least of his problems.

PM Modi, Narendra Modi, BBC documentary, Gujarat riots, MEA, ministry of external affairs, Arindam Bagchi, Rishi Sunak, United Kingdom
Prime Minister Narendra Modi. (File Image)

For the third day in a row, Opposition parties on Monday maintained the heat on the Narendra Modi-led government, demanding a Joint Parliamentary Committee or a Supreme Court-monitored probe into the allegations levelled against the Adani Group companies in a report released by New York-based Hindenburg Research. The report, which has resulted in a freefall of the Adani Group company stocks, has given the Opposition just the ammo it needed to corner the Modi government.

Opposition parties, particularly the Congress, have often linked the rise of billionaire industrialist Gautam Adani, Chairman of the Adani Group of Companies, to Prime Minister Modi and the rise of the Bharatiya Janata Party under his watch. “Adani ki Sarkar”, the slogan of choice for Opposition in Parliament today, is a rip-off from the “Suit boot ki sarkar” and “Adani-Ambani ki sarkar” jibes that Congress leader Rahul Gandhi has used consistently in his campaigns against the Modi government since 2014.

Opposition parties’ MPs stage a protest over Adani row at the Gandhi statue in the Parliament complex, in New Delhi, Monday, Feb. 6, 2023. (PTI Photo/Kamal Kishore)

In the latest controversy, the Opposition senses a 2012 moment when the BJP cornered the then Congress-led United Progressive Alliance government following reports by the Comptroller and Auditor General that alleged irregularities by top ministers and government functionaries in the allocation of telecom spectrum, coal blocs, and infrastructure projects. Opposition parties rallied against the government in Parliament — a rare display of unity.

The real threat to Modi

Yet, chances that the collective heft being witnessed now will carry into the Lok Sabha elections are minuscule. The gravity of the allegations aside, there are inherent issues within the Opposition as a bloc, as well as on individual party levels, to put up a potential fight against Modi’s BJP. Bereft of any unanimity on the issue of leadership, alliances between Opposition parties are driven by their own ambitions and calculations and have so far failed to inflict any electoral damage upon the BJP.

But that doesn’t mean that the Adani-Hindenburg saga poses no significant threat to Modi’s prospects of returning to power as Prime Minister of India for a third consecutive term. For, the threat is not from the Opposition. It is from the damage to Modi’s image of a ‘Vikas Purush’ if an industrialist as big as Adani were to fail.

While the gloom seen in the two weeks since the Hindenburg report surfaced does not mean the end of Adani, the billionaire industrialist still has a fight on his hands. Adani stocks have tanked up to 65 per cent from one-year highs, mopping off over Rs 11 lakh crore for investors in market capitalisation. Financial credibility is at risk given its debt-servicing obligations and funding for new projects is bound to take a hit. Reports, thus, of a rethink of its capital expenditure plans within the Adani Group are not misplaced.

Modi’s Catch-22

The battle for Modi in the run-up to the Lok Sabha elections in 2024, and the nine states along the way, will be equally tough. The Adani saga has forced Modi, who juxtaposes his development agenda against the Opposition’s politics of “parivarvaad” and “bhrashtachar”, to rethink his own campaign strategy, and positioning. Infrastructural development has been one of the key planks of Modi’s development agenda and any slip-up here can potentially dampen the PM’s pitch.

That danger, however, is clear and present. From power to transmission to green energy, and ports, highways to airports, the interests of the Adani Group are tailored to align with the interests of the country. The challenge for Modi will be to justify the damage that a struggling Adani may have on the government’s manufacturing and infrastructure development. Adani, who has positioned himself as a champion of this cause, has several big-ticket projects to his name, many won from the government through a bidding process.

Gautam Adani in Kolkata. (Express file photo by Partha Paul).

However, the real dilemma for Modi, personally, will be whether to steer clear of Adani or back him — the latter easier said than done politically. Modi may distance himself from the controversy around Adani but will struggle to isolate himself should big-ticket infra projects sanctioned by the government to the conglomerate come to a halt.

On the other hand, backing Adani will give a new lease of life to Rahul Gandhi’s “suit-boot ki sarkar” jibe to portray the PM as one who will go out of his way to help his chosen few industrialist friends. Either way, a lot depends on what Adani does next to recover from the depths it continues to plunge to.

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 06-02-2023 at 14:34 IST