Monday, September 3, 2012

Prakash Javdekar clarifies….the real scam is that the PM thought of auctions!

The grain is separating from the chaff! As more and more media interviews are being given by enthusiastic BJP leaders; as TV anchors are finally learning what the reality of the matter is and as newspaper editors, political analysts and industry head honchos are getting their facts together, the BJP’s ploy and plot is coming unstuck. The truth is beginning to emerge.

On NDTV last night, Sonia Verma was questioning Prakash Javdekar of the BJP on why the same policy of allocation of coal blocks during the NDA regime should not be considered to be a scam. “Because there was no thought of conducting auctions then” (not the exact words but the exact spirit!). “That was the scam” he stressed! Aha. So that’s the blunder the PM made! He thought of reforming! How stupid of him! If only he had continued without thinking of auctions, there would have been no scam at all! The faster allocations of mines would then perhaps have been routine and life would have been hunky dory! Silly Congress leaders and silly PM…..

This is hardly the first time the BJP has used such convoluted logic (such logic is taught where? In RSS shakhas?) to prove a scam. In the 2G matter also, the BJP didn’t think of auctions till as late as 2004 (4 years after the 2000 auctions which determined the price of the pan-India license at some Rs 1650 crores). Why was the policy of auctions not continued with during Arun Shourie’s time? It was the UPA that thought of and conducted auctions for 3G licenses. It was this auction that made the people (including the BJP) realize how valuable telecom spectrum was. That triggered off the CAG accusation of the 2G policy being flawed. Had the BJP stuck to telling us that there was favoritism in a few deals, it would have been OK. But the CAG chose to strike at the policy itself. And then the BJP jumped in to say it was all a scam. In the BJP’s world view, it doesn’t matter that it didn’t even think of ascending e-auctions for the 2G licenses all the way until 2004 when it was ruling. It’s when the UPA thought of a more progressive scheme that the old one was dubbed corrupt.

Then there was the Lokpal issue. The BJP had no worries in accusing the Congress of not passing the bill…..with no explanation given to why it did nothing during its six years as well!

And now there is this bizarre explanation that the BJP is struggling to offer these days for why the coal block allocations during its rule were not a scam. The Electricity Act was amended “by the NDA” (taking credit here; althought I do agree this was a good move) in 2003 when private players were allowed into the power sector. “That is when the demand for coal went up. Prior to that, there was no demand for coal. Hence prior to that, there was no scam”! Very interesting justification of the “prior period” prompting the anchor to ask if it was the “size” of the scam that made it a scam in the first place! But more interestingly, and no anchor seems to be asking this, why did the BJP “not even think” of auctions from 2003 to 2004? After all, it was “their” policy which made private players “think” of windfall profits. Surely there is some scam here!

And like I have mentioned earlier, the UPA can be accused of many other scam and much larger numbers. It’s been “thinking” of fuel reforms for several years now but hasn ‘t done anything. It’s been thinking of land reforms for many years now but has done nothing. It’s been thinking of FDI in various sectors for many years now but has been unable to get the Act passed. (And if the BJP can help it – by stalling Parliament as it is prone to do every now and then – it will ensure that Acts are delayed as much as possible!). All of this is a scam. Why? Because the UPA has already thought about these things! The scam is in the thinking as Prakash Javdekar clarified yesterday! And since the NDA never thought, I guess they never had any scam!

On the CAG, its amazing how the so called expert auditor hasn’t bothered to consider “time value of money” in calculating the presumptive loss to the government. Even a FY BCom student knows that revenues and profits that accrue in the future have to be “discounted” to arrive at the NPV. The CAG has done this for its DIAL and the Sasan reports; but has conspicuously missed doing this for the coal scam. Why? And when pushed, the CAG threatens to raise the loss figure to a much higher number (in its eventual goal to cross the Rs 10 lac crore mark; it’s still trying!) by making some new assumptions. So what do we understand here? That the final number is a product of the “generosity” of the CAG (too low) or its “vindictiveness” (too high) or what? I have always known accounting to be an exact science that yields one number (since assumptions are discussed and agreed upon before the analysis is done…..after which there is no further debate). Clearly, the CAG needs to be audited too!

And lastly, I think the government is doing the right thing by subjecting all coal block allocations, including those made during the NDA regime, to a criminal investigation by the CBI. If anyone fudged papers or made false representation, it should be penalized and the allocations canceled. And if there is less or no progress in mining, the allocations should be treated appropriately. For the first time, the government appears not to have lost its bearings on this subject. Otherwise, like in the 2G case, it could be expected to cancel and re-auction everything and join the BJP in its relentless pursuit to derail the country’s progress.

The real truth is that there is no real truth in the BJP’s accusations. Yes there is corruption, but then in which government sector is there no corruption? The important point is that all parties are involved and the system needs a clean up. The BJP surely cannot claim to be less corrupt than the Congress. It surely cannot build its political strategy on this…..And will someone please tell the PM not to think so much!!!

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