After Jairam Ramesh showed a red light to the Vedanta mines in Orissa, the Congress party and its Crown Prince unfurled a huge green flag of environmentalism. The POSCO port and steel project, which was to be the largest foreign investment in India, was the next to be put on hold, as the minister called for a review of the project's environmental compliance. Plans for three big dams on the Ganga were blocked, and the Navi Mumbai airport plans were called up for review.
Most disturbingly, for a country which is chronically short of electricity, the Ministry of Environment and Forests' new classification of "-Go' areas for coal mining will render almost half of India's coal-bearing areas off-limits to mining.
Alarmed by the runaway greening of his own party, Steel Minister Virbhadra Singh asked his colleague, Jairam Ramesh, to be "pragmatic and not dogmatic".
What gives?
First of all, rule out the thought that this is a one-man crusade. His time in the MOEF may well have made Jairam Ramesh into a deep ecologist, and one genuinely convinced that the future of the Indian sub-continent will disintegrate without his activism. However, power in the Congress Party is highly centralised, and activism by its ministers is swiftly reined in unless it suits the High Command. Or, even more likely, has been ordered by them.
So then, what gives at 10 Janpath?
Consider two major shifts in India's landscape over the last twenty years.
The first is the abolition of the Licence Raj. Pre-1991, every industrial project required a licence to be issued by the central government, which put an upper limit on the amount of goods an entrepreneur could produce in any plant. Industrial licences created monopoly-like powers for those who were able to garner them, and were seen as licences to print money. The ability to obtain such licences was a key business skill for industrial houses. Correspondingly, the discretion of politicians and ministers at the center to grant such licences led to the concentration of power in New Delhi - a fact which allowed economist and BJP ideologue Jay Dubashi to comment that more than half of India's richest men lived less than 4 km. of Parliament House.
Post 1991, the Inspector Raj lived on, but the pickings here were smaller, and much more dispersed. Liaison offices in Delhi grew less important, and entrepreneur talent emerged all over the nation.
Several regional players developed, and leveraged, strong connections with politicians at the state level. Infrastructure projects required sponsorship by Chief Ministers; the firm hold of state governments over procurement and allocation of land also led to the increasing importance of the Land Raj, which ran from State Durbars.
Meanwhile, the second shift in the political landscape had taken place, namely the fragmentation of party power. Even as state governments acquired more control over the fortunes of entrepreneurs, the Congress Party gradually ceded power at the state level. Today, while Sonia Gandhi's nominee may lead the nation, her party enjoys a majority in only 7 states. In 3 others, it shares power with its alliance partners.
Over the last 20 years, then, the Congress Party has seen a steady erosion of its power, from the heady days when the elder Mrs. Gandhi's propaganda could claim that "India is Indira and Indira is India". In a polity governed by patronage, and requiring vast sums of money to run the election machinery, these are disturbing trends.
In hoisting the green flag, the Congress Party has radically reversed its loss of political power. By claiming veto powers over virtually all major projects, the Ministry of Environment and Forests has placed itself at the top of the heap of governmental control. Suddenly, it doesn't matter whether Mayawati trusts you, Narendra Modi admires your implementational skills, or Naveen Patnaik believes your project is good for the economy of his state. If you want ot set up a large project, Jairam Ramesh is your go-to man. And there is no doubt about who turns his lights from green to amber.
This game changer, potent as it is, will create a new set of questions. If, as I believe, the average Indian wants development above all, the negative power of veto will not translate to electoral success for the government controlling the centre. It will probably translate to greater money power, and a greater ability to strike deals with regional satraps, but in the longer run, only a strong, proactive development agenda will deliver the electoral goods for any government.
But that is in the longer run. For now, the greening of Jairam Ramesh has given his party a massive injection of steroids. And not only are they legal, the chattering classes even see them as being politically correct.
Mohit Satyanand is an entrepreneur and portfolio investor.