The seizure of Rs 4.01 crore in cash and 6.5 kg of gold by the Income Tax authorities in Mysuru on Friday didn’t come as a surprise to many, given the fact that this was just two days after the Wednesday raids on 11 contractors in Karnataka that saw Rs 6.76 crore of money recovered.
The Election Commission said in a statement that the total cash seizure from the date of announcement of model code of conduct till Friday stood at Rs 46.78 crore, more than what was seized together during the 2013 Assembly elections and the 2014 Lok Sabha elections in the state. In addition the commission has seized liquor and gold valued at over Rs 100 cr.
Money has traditionally played a crucial role in Karnataka. In the 1970s and 1980s it were the rich sugar barons from North Karnataka who decided the state polity. But later the real estate boom in the 1990s saw the real estate barons from Bengaluru make political entry and emerge as the kingmakers in the state politics.
However, what changed state politics was the emergence of the “Bellary Republic”. The rise in iron ore price after China’s mining ban in 2003 saw the fortunes of Bellary region change and led to the emergence of new brand of miners who made thousands of crores of rupees. The emergence of politicians like the Reddys and the Lads changed the course and character of Karnataka politics. While uncontrolled mining has stopped for nearly a decade after the Supreme Court ban, its financial side-effects are coming out in the open yet again during election time.
The mining barons are all set for fighting pitched battles to ensure their dominance in state politics. Mining barons cutting across party lines are making their presence felt in nearly 40 seats.
This time around it’s civil contractors who are under the scanner, especially those who participated in government tenders in the Public Works Department (PWD). Chief Minister Siddaramaiah’s key aide and PWD Minister H.C. Mahadevappa was the first one to feel the heat as most contractors raided were linked to his ministry. Some in the Congress even hinted that the party was being targeted and that the seizures were being selectively carried out.
The I-T department hinted at the hoarding of huge amounts of cash by these contractors as one of the reasons for the severe cash crunch at ATMs in the poll-bound state. “Hoarding of cash by contractors at a time when cash shortage was reported in some areas raises troubling questions. The bulk of the seizure was made from lockers of benami accounts,’’ an I-T official told The Sunday Guardian. The efforts have blocked cash flow and money distribution by politicians in the present polls. Several candidates are thinking of different methods to woo the voters by paying them cash. A few voters in north Karnataka, the sugar heartland, are discovering their accounts getting credited with small cash loans of Rs 2,000-3,000 by cooperative bank owners which will get waived if the candidate wins. While some voters in urban areas are getting their month’s grocery at their doorsteps for free.