The Beautiful and the Damned

by Siddhartha Deb

  Towards the end of my stay, I went to see Rao in his office on the second floor of the administrative building. He wasn’t in, but the secretary led me into the chamber and asked me to wait. The room felt institutional, with metal cabinets, a couple of desks and chairs, an old desktop computer and an inkjet printer. There was a calendar on the wall with a picture of Lakshmi, the goddess of wealth, and a garlanded photograph of an elderly couple who, I was told, were the deceased parents of the owner of the factory. There was a coconut sitting on one of the filing cabinets, with six dried palm leaves spread out on top of it, a mutant hybrid of palm and coconut.

  Rao was a handsome man, with a generous head of hair. He was also surprisingly frank. I would have expected him to be tougher, to have a little more TMT in him, capable of being hard with the workers and eager to keep nosy outsiders away. But perhaps he had people like Sarkar to do that for him, and above him was the invisible owner, who must have been tough too. Rao had a degree in industrial chemistry and had worked at other factories – in Karnataka, Kerala and Maharashtra – before moving to Vinayak steel nearly two decades ago. He had started here as a chemist, analysing the final products for their quality, and had worked his way up to the managing director’s position. He said he was paid very well, with perks like a large house and a chauffeured car, but he had to put in long hours in return, often working through the weekends.

  In Rao’s mind the story of the factory was analogous to the story of contemporary India, a narrative of vast improvements and modernization leading to ever greater profits. He pointed to a plaque on his desk from the state pollution control board to emphasize that pollution had been cut down considerably at his factory, in contrast to rival operations. The production method had been vastly improved as well, he said. They had imported a new, efficient technology from a German company, which was paid a royalty per tonne of steel produced at the factory. The factory had been doing excellent business until the end of 2007. There had been a construction boom in the country, Rao said, and he had been supplying TMT bars to a number of construction companies in and around Hyderabad, including a very large one called Maytas Infra.

  But things weren’t going quite as well since January 2008. Although he didn’t say so, I thought that perhaps this too ran parallel to the story of contemporary India, showing how the rise of the new India had, in recent years, become something of a fall. A nationwide downturn had led to a slowing down of construction projects and a consequent cancellation of orders for Rao’s products. He had been especially affected by problems in Hyderabad around Satyam, the fourth-largest software and outsourcing company in India at one time, which had links to the construction company Maytas Infra. Rao had received large orders from Maytas Infra, which had won the contract for building a subway system in Hyderabad. But Maytas Infra had run out of money and stopped working on the metro project. Since it owed Rao’s factory 3.5 crore rupees and was unable to pay this amount, it had instead offered four ‘villas’ in a development owned by a sister company called Maytas Properties. Rao had taken the villas, he said, but their property values had declined and he was concerned that the government would seize all assets owned by Maytas Properties.

  Rao faced other problems too. I asked him if transportation of material had become easier for him since the construction of the new highway.

  ‘It’s become a headache,’ he said, laughing.

  He wouldn’t say more, but one of his managers later explained to me that the new highway had made it easier for government officials to show up at the factory and ask for bribes. ‘Before, the roads were so bad that they wouldn’t bother coming this way. These days, they’re driving along the highway when they see the factory and think they should make a stop, check for ways in which the factory’s breaking rules, and ask for money.’ But the manager admitted that there were indeed many ways in which the company broke existing laws, including evasion of taxes, although he insisted that other factories were even worse.

  The worst of the violations had to do with the conditions of the workers, which, the manager said, was made easy by the fact that the workers were migrants and did not have a union. The owner of the steel factory had at one time considered buying a nearby sponge iron plant run by the government, but he had backed off after learning that there was a workers’ union there.

  In fact, the factory employed none of the people I had spoken to. It had only 250 direct employees, almost all of whom were in management. The top five people among these white-collar workers made more than a lakh of rupees a month, ten people more than 50,000 rupees, and fifty engineers made about 25,000 rupees each. Below them were roughly 1,000 workers, of whom 70 per cent were from other states, mostly Bihar and Orissa. The factory was not their employer, however. Instead, it had an arrangement with four middlemen contractors, of whom Sarkar was one, to provide the factory with labourers who earned 20,000 rupees at the very top of the hierarchy and 4,000 at the bottom. The contractors were paid on a commission basis by the factory, receiving 220 rupees per tonne of TMT produced, and it was therefore in their interest to see that workers weren’t sitting idle or that there weren’t more workers than necessary at the factory.

  Of the 1,000 workers employed through the contractors, government regulations required payments into a health insurance and disability scheme called the Employees’ State Insurance and into a provident fund that provided pensions. But the contractors, with the approval of the management, saved on these costs by keeping 40 per cent of the workers off the books. These men received no provident funds and no ESI payments. They wouldn’t get any compensation or health care if they suffered a serious injury, or a pension when they stopped working. They had no future beyond the immediate labour they carried out, and Pradip was one of these men. He was, in effect, a kind of ghost.

  When government officials showed up at the factory and discovered these violations, they did not enforce the rules. Instead, they took a cash bribe, got back into their vehicles, and drove back down the highway, so that the lack of a future for many of the workers was converted into the present enrichment of officials and factory owners. It was the shadow transmutation that ran in parallel to the alchemy of converting iron ore into TMT bars.

  8

  A few days after I returned to Hyderabad from Kothur, I went to see the Maytas Hill County development. I had been thinking of Rao’s story about being paid in villas for the amount owed his factory by Maytas Infra, and I began to recall scenes from my last visit to Hyderabad. I thought of the bus I had seen a year before, when driving back with Vijay from the chemical village of Qazipally. It had been empty save for the driver, with the logo ‘Maytas Hill County SEZ’ emblazoned on its side. There had been billboards all over Hyderabad for the same development, saying ‘Less concrete, more chlorophyll’.

  According to Rao, the downturn had begun by then, but the effects had not been apparent to those outside the industries. Now the cracks were visible everywhere. In January, an Enron-like accounting fraud was exposed in Satyam, until then a flagship of Cyberabad’s global ambitions. Its chairman, Ramalinga Raju, admitted to exaggerating the company’s assets. He had also, in a reversal of the practice at factories like Vinayak steel, said that the account books had shown many more IT workers employed than was actually the case. Raju had resigned and been sent to prison while the Indian government took over Satyam and eventually sold it to a group of other companies.

  The fallout from Satyam, however, continued unabated in Hyderabad. I was told by people that Raju was in prison not as punishment but to be protected from awkward questions that might reveal the extent of even more widespread fraud. Like Bangalore, the boom in Hyderabad had been about land while pretending to be about software – and Maytas, I was told, was Satyam spelled backwards, a doppelgänger of sorts for the more famous company. ‘Places like Hyderabad don’t become software capitals of the world unless there’s a real-estate dividend,’ a local journalist told me with a touch of bitterness. ‘Maytas was earlier
called Satyam Construction, and that company predates Satyam software, which is to say that the Raju family was about real estate and construction before it was ever about software.’

  There were in fact two Maytas companies – the construction firm Maytas Infra, and the real-estate business of Maytas Properties – each partially owned by Ramalinga Raju’s sons. Just before admitting his fraud in Satyam, Raju Senior had tried to push for the acquisition of the Maytas companies by Satyam. He had apparently known that the Maytas ventures were in trouble and had been hoping to pass on the losses to Satyam shareholders while extricating his sons from the mess.

  The move failed, and the Maytas companies became part of the collapsing empire of software, outsourcing, construction and real estate. I had been hearing of wealthy property owners from Maytas Hill County demonstrating in front of the Raju residences, demanding completion of their expensive villas, and I met up with one of these owners one day. His name was P. Sivakumar, or Siva, a friendly but tired-looking man with dark circles around his eyes. He took me to Maytas Hill County, and the drive turned out to be a pilgrimage of the Cyberabad so loved by McKinsey and Chandrababu Naidu. We rode past the Satyam tower and the Microsoft campus, driving along a wide road known as the ‘IT corridor’. The horizon was filled with giant yellow cranes standing still over the shells of buildings, and it was apparent that many construction and real-estate firms had run out of money.

  We came up to the Maytas development, sited on a slight rise. The giant letters spelling out the name MAYTAS HILL COUNTY were visible from far away, the letters carefully arranged to look like the iconic Hollywood sign. We stopped in front of Siva’s incomplete house, a two-storey structure surrounded by others exactly like it. The only difference was in the degree to which the external facades had been finished, with the first few houses almost complete, the next few half finished and so on to the very end of the line where the houses were grey concrete blobs. In the distance was a thirteen-storey apartment building, but here the narrative was vertical, the money having run out after Maytas had completed the third floor.

  As I looked around with Siva, a few of the other owners came up to talk, mirroring Siva much in the way their houses mirrored each other. There was a woman in a salwar kameez and sneakers (‘from Dallas, Texas’), and a man on a little scooter (‘from Virginia’). Their Indian-American accents rang out loudly in the empty development, interrupted occasionally by the sound of hammers and picks. Each of the owners had hired workers independently to finish the villa he or she owned, intending to move in as soon as the houses were liveable. The wind approached, blowing through the empty approach roads to this ghost of an American suburban town, and then it left the area, sending clouds of dust spiralling up towards the apartment building.

  Siva took me inside his house, for which he had paid 85 lakh rupees. A group of carpenters, migrants from Rajasthan, worked on the cabinets, while a barefoot teenage worker, his pants rolled up, balanced precariously on a metal frame jutting out from the house. The house would be painted and finished soon, Siva said. He explained why it was so urgent that owners move in as quickly as possible. They believed that Satyam had transferred money to Maytas illegally. Siva was oddly specific about the details – 300 crores had been moved out of Satyam, he said, through an offshore account in Mauritius, to Maytas – and since Satyam had many creditors, the villa owners were worried that the government would seize the Maytas properties. If they moved in, however, they would have a better chance of fighting the case – possession, as the saying goes in India, being one half of the law.

  We went and stood on the roof, next to the solar heaters that reflected a rather modern touch. Otherwise, Siva’s house seemed dank, and the rooms were quite cramped. It reminded me of the time I had gone to see Chak’s house in Bangalore. But where Chak had been optimistic, Siva’s mood was darker, just as his house, although quite expensive, seemed like a cheaper version of Chak’s place. When I said I was surprised that Siva had paid so much money for the house, he replied that the properties had gone rather quickly when they were put up for sale at the end of December 2006. The entire stock had sold out in a couple of days. It had been a boom time, after all, with plenty of money everywhere. Siva had paid a 20 per cent down payment, with the rest financed from the State Bank of India, and at that point he hadn’t been particularly worried about money.

  Now he was beginning to get a little stressed, he admitted. Siva was from Anantapur district in coastal Andhra, but he had moved to Hyderabad in the late eighties to study science. In 1992, he had gained admission to a graduate programme at Bradley University in Illinois. But his visa application was rejected – this being before the Y2K craze led to the generous distribution of US visas for Indian engineers and engineering students – and he worked in Hyderabad as a computer programmer. In 1997, however, he finally went to America, sent there by the Indian company he was working for. He lived at first in a Virginia suburb, sharing a two-bedroom apartment with three other engineers. He got married, had a son and a daughter, worked in Baltimore, and then moved to Edison, New Jersey, where he lived for ten years. In 2007, he became an American citizen, which, as he put it, was ‘the trigger for moving back’ to India. He had been worried about his daughter growing up in America. ‘It’s not such a problem for boys,’ Siva said, ‘but girls, they have only one chance. If things go wrong, they can’t ever recover.’

  Siva had also wanted to do something of his own in India, and besides, once he had US citizenship, he was no longer tied to the place.

  ‘You don’t feel hampered by not having an Indian passport?’ I asked.

  ‘See, we’re from here. We know how to work this system,’ Siva said. ‘You don’t really need an Indian passport for that.’

  Yet although Siva had moved back to India, the attraction of Maytas Hill County had been that it was close to the American lifestyle he had become used to. He said that 70 per cent of the property owners were NRIs (non-resident Indians), sharing a common culture, eager to live in a gated community where things wouldn’t be as chaotic as they were in the rest of Hyderabad. Of course, he reflected, most of the things people had paid for had not been put in place. There was no swimming pool, no tennis court, no movie theatre and no 56-acre clubhouse. There was no water treatment plant, and tankers drove in periodically to supply water, workers from individual villas running after them with plastic bottles. There was electricity, but it was a commercial line, charging a higher rate.

  But at least the housing development had been built, even if partially. The entire development was 300 acres, with the residential portion spread over seventy-five acres. Of the remaining section, eighty-five acres had been planned for an SEZ, but all Maytas had done with that was dig a hole in the ground. The company had presumably received tax breaks for that part of the property, the rationale being that the factories put up in the SEZ would create jobs, but the SEZ had been far lower on the list of priorities than the expensive private housing that had gone so quickly when offered for sale.

  It seemed to reflect perfectly how little of the boom in Andhra Pradesh had been about creating jobs for the working classes, and a report by the Planning Commission pointed out that from 1995 to 2001, at the peak of its growth, the entire state had added fewer than 2,000 industrial jobs. This was an absurd figure, and no doubt more manufacturing jobs had actually been available, but they had gone to migrant workers who were not on the records, who slipped off the trains and buses to work for a few months before heading somewhere else.

  At the steel factory, Sarkar had talked about how good the prospects were for migrant workers, especially for skilled people like Pradip. They could go on till they were seventy or eighty years old, he had said. It was a vision of the future that the workers I spoke to hadn’t accepted. But they had been unable to give me an alternative future, saying that they couldn’t think beyond a few months. Mohan intended to go back to his village. Even though there was little money to be made there, he felt that the d
rifting life wasn’t for him, but before he returned, he wanted to make back the money he had used up travelling to Kothur and perhaps have a little more that he could spend back in the village. Dhaniram and Dibyajoti, both more seasoned, would also return to the village. But they expected to head out again for work, even as Dibyajoti kept dreaming of having a furniture shop of his own. Pradip’s room-mate, the nameless boy, would go back to Bihar and recuperate there for a while before going on the road again. As for Pradip, he didn’t know what the future held for him, although as long as those muscles held out, or until he was laid off, he would remain a tongsman somewhere or other.

  For what happened to workers who fell through the hole, I didn’t have a person I talked to, only a vision. It appeared the afternoon I was talking with Pradip and Sarkar at the tea shack. It was the middle of the day, the sun blazing down on the steel factory and its surroundings. A man came walking down the middle of the road, although it wasn’t a walk as much as a stumbling dance. As he came closer, the workers who had gathered outside the tea shack and at the factory gate began to stare.

  He was young, maybe in his late teens, dressed in a black T-shirt and trousers. His feet were bare, and he moved on those bare feet down the middle of the road, unheeding of any of us. His eyes were bloodshot, staring into the void. He was most likely a Nepali and he was almost certainly drunk. But there was something about him that suggested a terrible violation, as if he had been raped and set loose on the street. Everyone stared, no one moved, either because they were stunned by his appearance or because they were used to such figures. He went past us, drifting towards the new highway. ‘Someone should stop him,’ I thought, ‘he’s going to get killed by a car.’ But I couldn’t move and just stared on with the other men, as if he was our scapegoat, our sacrifice to unappeasable gods. A police jeep was parked near the edge of the highway, but the policemen made no move either, and the man was soon on the road, a barefooted figure plunging into the onrush of cars from Bangalore. I couldn’t watch any longer and turned away. When I looked back again, I saw that he had just made it across and was still moving, a small but distinct figure heading towards the green fields pockmarked with black heaps of slag.