Deal U-turns leave Yeddy red-faced

In 2006- 2007 during the JDSBJP coalition under Kumaraswamy as chief minister, the government allotted an additional 1667 acres of land to JSW.

Deal U-turns leave Yeddy red-faced


The BJP in Karnataka under B S Yeddyurappa is fast  acquiring the tag of a “U-turn party”, leading to former Chief Minister H D Kumaraswamy slamming it  for what he terms its double standards. In 2019,  when the JDS-Congress coalition government under Kumaraswamy decided to sell 3,667 acres of mineral rich land  in Toranagallu and Hospet in Bellari district  to the steel giant JSW,  it was the opposition BJP that had accused it of corruption. In fact, Yeddyurappa even staged a  three-day dharna against  the Kumaraswamy government  while gaining support for his allegation that the sale was irregular.

The protest gained momentum as senior Congress leaders too had come out strongly against the arrangement  with veteran H K Patil leading the charge. Predictably, the Kumaraswamy government was forced to put the sale on hold. To add to its woes, the coalition also  collapsed within a month after  being reduced to a minority, paving the way for the BJP to form the government. On 26 April this year, however, the  Yeddyurappa cabinet  approved the very same transaction with JSW.

It put up a weak defence for the volteface by seeking to explain that in 2019 the steel company was embroiled in a legal dispute with the state-owned Mysore Minerals Limited. Now, however, with the Karnataka High Court quashing  MML’s demand for Rs 1,700 crore from JSW, the road was clear for the sale. Jagdish Shettar, the industries minister, went a step further arguing that holding back the sale cum lease of land to JSW would send a wrong signal to  investors whom the state was  wooing . In fact, according to him, the government had no choice but to execute the sale deal.


“Had we not done that, a wrong message would have gone to the  investors, from within and outside the country,” was his submission. It was argued that JSW is a leading steel company which had provided employment to over 25,000 people in Ballari and invested hundreds of crore rupees. Accordingly, It could not be  sidelined without marring  Karnataka’s image. The minister also claimed that in 2019, the Kumaraswamy government  had failed to give all the details of the deal. “Had it done so, then it would have gone through much earlier.” He added that the lease-cumsale agreement was binding on the state government.

This evoked ridicule from Kumaraswamy who claimed that “it is unbelievable that the BJP leaders were not aware of the price arrived at per acre.” The BJP ministers, for good measure, also sought to explain that the lease cum sale deed related to an arrangement that the state had effected with JSW in 2006.  With the company fulfilling its obligations, the government had now decided to sell that land to it. This argument brought more attacks from the Congress and the JDS, who continued to remind the BJP of its protest in 2019 against the arrangement.

Ironically, the land was being sold between Rs 1.22 lakh and 1.55 lakh  per acre, the same price that the Kumaraswamy government had fixed, a rate which Yeddyurappa had alleged in 2019 was finalised  keeping monetary  considerations in mind. Other critics had then claimed that the value per acre of the mineral rich land would exceed Rs 1 crore. These attempts to save face had little impact on the central leadership of the party which forced the Yediyurappa government  to back track. His Cabinet  decided last week  to put the deal in abeyance.

Or, rather, failed to confirm it. Here again, the party’s explanation about its flip-flop has left critics amused. While denying any  pressure from its central  leadership, the state government claimed that the 26 April cabinet decision on the sale of land to JSW was not confirmed at the subsequent meeting on  27 May and, therefore, it would not be implemented. When queried further, the government reasoned that there was an appeal pending before the apex court against the deal.

Besides, as per the official procedure, effective since 1957, previous decisions of the cabinet needed  to be  reviewed and confirmed in the  subsequent meeting. This was not done at the cabinet meet held on 27 May. It  is  worth remembering  here that a social activist had filed a Public Interest Litigation on the issue  with the High Court also sending notices to all the cabinet ministers.

This is the argument government offered to explain itself saying that “looking into the pending cases, the cabinet in its wisdom  had decided against confirming its 26 April call to sell the land.” According to available information, it was during  HD Deve Gowda’s chief ministership in 1996 that the deal was  first proposed.  Subsequently, in 2005-06 it was revived when the Congress-JDS coalition under Dharam Singh decided to give 2,000 acres of land to the steel giant on a lease cum sale agreement.

In 2006- 2007 during the JDSBJP coalition under Kumaraswamy as chief minister, the government allotted an additional 1667 acres of land to JSW. Importantly, Yeddyurappa was the deputy chief minister at that time. Significantly, criticism  of the Yeddyurappa cabinet’s 26  April decision by a section of  BJP members including Uday Garudachar, K Poornima, Arvind Bellad  and the chief minister’s bete noire, Basannagouda Patil Yatnal, cannot be undermined.  In a letter to the chief minister, they sought to jog Yeddyurappa’s memory by reminding him of his stand against the deal in 2019 while underlining that his U-turn was sending a wrong signal to the people.

Today even though the BJP  government has  been forced to refrain from pursuing the deal, its claims of ensuring  the state’s interests and development,  stand exposed according to observers. The exercise has left the BJP government with egg on its face. The  JSW affair could deal a serious blow to the chief minister’s carefully cultivated mage as a good administrator. Especially when he is at the fag end of his political career because of his age.

(The writer is The Statesman’s Bengaluru-based Special Representative)