Since a lot of muck has been flying around regarding the
coal “scam”, I think its important to take stock of what all has been
happening. Here is a summary of facts, lest you have forgotten them:
1) As
the Standing Committee of Parliament for coal headed by the TMC’s Kalyan
Banerjee pointed out in its report yesterday, “everything in the coal allocation process was wrong since 1993”.
The report is bizarre as I wrote yesterday. But it is right in one thing. That
the process of allocations through “screening committees” started way back in
1993. Actually in July 1992. As per Wikipedia “A number of coal blocks, which were not in the production plan of CIL (Coal
India Limited) and … SSCL (Singareni Collieries), were identified in
consultation with CIL/SSCL and a list of 143 coal blocks were prepared and
placed on the website of the MoC for information of public at large”. So
there was no hush-hush here. Information was provided to anyone and everyone
who was interested in getting a mine. Whoever fit the criteria could apply. No
scam here.
2) Wikipedia
reports: The guidelines for the Screening
Committee suggest that preference be given to the power and steel sectors (and
to large projects within those sectors). They further suggest that in the case
of competing applicants for a captive block, a further 10 guidelines may be
taken into consideration. The 10 criteria comprise inter-alia a) stage of
completion of project b) net worth of the applicant c) production capacity of
the end plant d) date of commissioning of mine and of the end plant e)
technical expertise in operating mines f) recommendations of the administrative
ministry (power, iron & steel) g) recommendation of the state government
where the mine is located and h) financial track record and strength of the
applicant. Does anything look amiss? Does it look like the Government bent
the rules to favor a few? Do you smell a scam????
3) The
Committee was composed of government officials from the Ministry of Coal, the
Ministry of Railways, and the relevant
state government. Make note of the last point. The state governments were
represented on the committee. Any decision taken by the screening committee was
taken after discussion with the state reps. Who ran the state government?
Non-Congress parties including the BJP, RJD, BJD, Left front etc etc in most
cases. So should we not include them in the corruption scam as well?
4) Upto
2005, 70 mines were allocated, out of which 41 were to the private companies.
Do note that a bulk of the time in the “pre-2005” period was ruled either by
the BJP (6 years), JD(United) for 2 years. The Congress ruled at the Center for
3 years. If any blame fixing needs to happen, it should be in the same
proportion. The BJP gets the most blame. Besides, it did not even think of
auctions. That was Manmohan Singh’s wisdom.
5) Between
2006-8, as many as 66 mines were allocated to the public sector and 32 to the
private sector. In no small measures, these – and the ones allocated before
2005 – contributed to the remarkable growth in coal production by 31% in just 4
years by 2009-10. On the back of this coal production, installed thermal
capacity went up from some 80000 MW to some 150000 MW between 2005-6 and
2010-11 (source: page 16 of CSO report “Energy Statistics 2012” available at http://tinyurl.com/dybya65. Does this indicate the policy worked or
didn’t? Where is the scam? Or do you see any corruption motive here????
6) The CAG’s biggest thrust was that the
Government had the legal option to auction coal mines starting 2005. While the
CAG may find that the legal sanction was there, it was not such an open and
shut case. There was also opinion that the laws (CMN/MMDR) needed to be
changed. Hence the Government chose not to go ahead with auctions then. This
kind of thing happens all the time. Want a current example? The Government
wants to allow more private banks to come in right? The Government feels that
the RBI can allow this even under extant laws. The RBI feels the laws need to
be amended and its powers to override the Board of the banks strengthened. Who
is right and who is wrong? The Government has chosen to go with the RBI’s point
and amend the Act first. This has caused delays. If twenty years later, someone
alleges that the Government could have gone ahead and increased the number of
licenses earlier, will people remember the RBI’s counter point of view? It’s
the same in the coal case. No one remembers today, but there was a strong view
against auctions. How can delayed auctions be called scam at all.
7) Then the point that the states where the coal
mines were located - West Bengal, Chhattisgarh, Jharkhand, Orissa and
Rajasthan all ruled by the opposition parties – none of whom wanted auctions.
Why? Why is the spotlight not on them???
8) Again
from Wikipedia, the PM’s statement in Parliament “A meeting was convened in the PMO on 25 July 2005 which was attended by
representatives of coal and lignite bearing states. In the meeting the
representatives of state governments were opposed to the proposed switch over
to competitive bidding. It was further noted that the legislative changes that
would be required for the proposed change would require considerable time and
the process of allocation of coal blocks for captive mining could not be kept
in abeyance for so long given the pressing demand for coal. Therefore, it was
decided in this meeting to continue with the allocation of coal blocks through
the extant Screening Committee procedure till the new competitive bidding
procedure became operational. This was a collective decision of the centre and the
state governments concerned.” Is this a false statement???? Has the BJP
challenged its veracity????
9) The “windfall gains” estimate of the CAG are
bunkus. The CAG has taken the value of coal that may or may not be recoverable,
at costs of production that may or may not be correct and most importantly –
and this seems to be core expertise – has forgotten to take the present value of monies generated over a
period of 100 years. What kind of accounting body is this???? Besides, it has
ignored the 26% tax the Government makes from all such windfall profits!
10)
Now coming to
the corruption angle that CBI is looking into (under SC supervision). Amongst
those alleged to have bypassed the screening committee system by giving false
information is Ajay Sancheti, a BJP MP. There is also an RJD MP as well as some
from the Congress. Its not like the BJP goes scot free
The above points
show that a) the move to auctions was not possible in 2005 b) all political
parties followed the screening committee process – the most the BJP c) The
announcements of the mines to be allocated, the guidelines etc were all put out
in public domain. There was no hush-hush d) state government reps – largely
comprising non-Congress parties – were very much part of the allocation
decision making and most importantly e) the states ruled by opposition parties
were opposed to auctions.
This is not to say
that there wasn’t corruption in the allocation process. Everyone knows there is
corruption in almost every single government department – both at the centre
and the states. I know so many of friends who encounter corruption in
government departments in Gujarat, Bihar, everywhere. But to call the coal
allocation process itself to be a case of corruption, and to brandish it as the
“mother of all scams” is crap. And
then to blame the architect of the auctions – the PM without whose thinking we
would still have been continuing with allocations – as the one who is guilty
(of what???) is criminal. This is politics at its worst. At present, we have
only seen bureaucrats stop taking decisions. Very soon, we will see politicians
stop taking decisions as well. After that, we can all sit back and enjoy India’s
ride down back to the Hindu (BJP) rate of growth. We may have the satisfaction
that “everything is above board”, even if there is nothing to show for it!
The real truth is that both the 2G and coal “scams” are
purely political attacks. There is zero truth in them. The CAG is part of the
political establishment under its present chief. Everyone seems to be
forgetting that as a country develops, its policies evolve. If the Government
dismantles price control in diesel and kerosene at a future date, that will not
make the present subsidy regime corrupt. Where there are cases of corruption,
those caught should be jailed. But to blow up the whole thing as a scam is just
a political plot to tarnish the image of the PM and the Government.
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