Look who’s swimming naked!

FEW YEARS AGO, former Prime Minister HD Deve Gowda gave full expression to his earlier training as a civil contractor. He questioned the demand from the information technology giant, Infosys, for substantial land around Bangalore. Deve Gowda, who represents the ‘detestable' stereotype of politicians that were trashed by candle-carrying chattering classes in the wake of the Mumbai attacks, wanted to know from Infosys boss, NR Narayanmurthy, why his company needed the gargantuan land. Expectedly,Deve Gowda was hammered by editorials in the pink press and by self-opinionated and morality-spewing anchors and studio experts - all those fascist page three types who want to run the nation without dirtying their manicured hands.

They all wondered at the gall of a politician to ask the demi-god of India's IT success of what he was going to do with so much land. So fi erce and vicious was the attack that his questions were effectively buried. The important link between the cyber world and real estate was never adequately explained. Now some of those queries, blundered into by Deve Gowda, are being met squarely by the skeletons that are hurtling out from the investigations into the Satyam scam.

Although no one blew the whistle on Satyam or the bizarre money-making ways of its promoter, Ramalinga Raju, what is evident is the growing merit in the fact that the real driver of IT growth was not really software export, but the galloping valuation of real estate. In one of his board meetings, the pragmatic Raju, cognisant of a melting economy, told his directors that he saw in the company's real estate investments as one of the two bulls that would take Satyam forward. Raju had tried to shift his cash reserves from Satyam to his infrastructure company, but due to resistance by investors, he could not succeed in his enterprise. Later, he owned up fraud and the fudging of account books. Investigations by the CID have displayed a Byzantine network of companies through which money was siphoned out and invested in real estate.

As real estate was booming, it seemed like a good investment. The investment was premised in the old classical economics belief that land was limited and so it would be wise to put money in it. Raju failed to realise the catastrophic impact large investments can make in real estate in an environment of economic slowdown. Not only did it increase the supply of land, it also sucked in money from all other sectors of the economy that would have helped in fuelling job creation and improving purchasing power.

Also,land was used for speculative purposes and generating credit in an economy. It was a boom destined to bust as easy money was not used for fast-tracking infrastructure projects. Banks used land as collateral and made real estate companies the darling of the stock market. Petty property dealers became real estate tycoons flaunting huge land banks. No one questioned, including the investment banks, about the quality of the land or whether their registration papers were genuine.

Satyam's Ramalinga Raju has revealed how fraud is king in India. The collapse has shown that the foundation of the India Shining story has been built on fraud and deceit.Satyam would have carried on with its ways if it had not been for the global slowdown.He would have squared his books and glorified himself as the India boom-boom story.Satyam's story is just the beginning of the windingly long bad story in bad taste and bad faith. A story that is replete with corruption, falsehood and amorality.