Since the 2G “scam” broke out, we have been fed ever larger corruption numbers. Apparently 2G was as big as Rs 1.76 lac crores; Coal even higher at Rs 1.86 lac crores (if the CAG had had its way, it would have called it a Rs 10 lac crore scam). Unfortunately for India, its institutions (CAG, SC, CBI) have all failed to behave responsibly, preferring to toss up ludicrous corruption numbers. Another important institution – the media – has also behaved irresponsibly, blindly amplifying such bizarre projections. And finally, our Parliament hardly ever functions, held to ransom by every major and minor party. Such irresponsibility on part of all our democratic institutions has led to the growth rate plummeting and the overall sentiment skydiving.
Look at 2G. Does anyone even know what the basic CAG charge was? It was that the government chose to give away spectrum cheap (at 2008 prices), instead of conduct auctions. The emphasis unfortunately was on the price. Not on the “process” – First Come First Served – followed which was undoubtedly rigged as investigations have now shown. The government was well within its rights to give spectrum cheap, in the interest of increasing teledensity. If it chose to forego Rs 1.76 lac crores for the good of the people, as it does even today with fuel subsidy, no one can fault it. The scam was in the way Raja manipulated the FCFS system – changing timelines, giving very little time to applicants to produce large-value Demand Drafts, etc. Investigations have shown that corruption of the order of Rs 200 crores may have taken place (the DB Realty – Kalaigner TV loan issue). Everything else was a chosen government policy, from which only the public gained. The Rs 1.76 lac crores (assuming it was true, though subsequent auctions have shown it was all baloney) was distributed amongst the people, not pocketed by telcos or even ministers and politicians.
Look at Coal. Again, the policy of “administered auctions” using the “screening committee” to decide, has been in force since 1993. No government touched this process. More mines were allocated since 2004 because the UPA was pushing for growth. More power plants, cement units, steel plants were coming up and the demand for coal was soaring. The government thought of auctioning coal mines, but the process took many years, thanks to parliamentary logjam and the general slow speed of governmental functioning. The interim period – when the government “thought” but did not “act” – is the period of corruption according to the CAG. Again, it confuses “loss to exchequer” for corruption (or maybe the BJP spun this to its “mota maal” accusation). Yes, the government lost revenues, but in return, it extracted cheap end-consumer-pricing in power (directly through bidding), steel and cement (by lowering input costs). This helped industry grow faster. Again, in Coalgate, there has undoubtedly been corruption at the local mine level (nothing proven yet), but mostly, it is administrative decisions (of the multi-party screening committee) that are being shown as cases of corruption. But where has the Rs 1.86 lac crores gone???? The answer: to the people in the form of lower prices. If it had gone into the pockets of the Congress, it would have won the next ten general elections without an effort! In reality, the party is in serious trouble because of these scams.
In both 2G and Coal, its not as if the private sector made “windfall” gains as is being claimed. The number 2 mobile operator Vodafone turned in its first profit after nearly 15 years of being in the country. Reliance Comm continues to report unimpressive margins and even other players – including the leader Bharti – are in a financial mess. Ditto in Coal. Jindal Steel, one of the companies in the eye of the storm, had a 10.7% PAT margin in FY13 (nothing unusual). India’s largest steel company, Tata Steel, largely unaffected by the scam, reported an even higher 13.5% PAT margin. If the scam had benefited Jindal, shouldn’t it PAT margin have been higher? All this talk of the private sector getting super profits is so much gibberish, it surprises me why our media doesn’t bring it out clearly.
The SC is equally to blame, stepping into policy making several times. And imposing punishment far too much in excess of the crime. For eg., canceling all 122 licenses allotted by Raja, when only a few were involved in allegations of corruption. Or canceling all mining in Goa and much of it in other parts, without setting any timelines for taking the final decision. The SC revels in the public adulation it gets when it is seen as taking “bold” decisions.
Unfortunately, it is this “public adulation” that has become the mojo of all constitutional bodies (CAG, SC). While bureaucrats in the government are painted as being corrupt, their equivalents in the CAG and SC show themselves as angels. In the public eye, ex Coal Secretary Parakh is corrupt, while Vinod Rai is a hero. Ashwini Kumar is corrupt, but Ranjit Sinha is a hero (isn’t it ironical that the BJP vociferously opposed his nomination as CBI chief?!). In a way, this public adulation of a few, started off first by Anna via his fasts, and fuelled by a media, searching for something, anything, to keep its business growing, is what is responsible for the present mess in politics, business and administration.
Its hardly fair to blame one political party – the Congress – for this. The BJP equally failed in so many states (where it lost the most recent elections). The BJP may be more competent with communication skills than the Congress, but it cannot hide its own equal involvement in corruption. It is also responsible for the parliamentary logjam that we have seen over the last few years. The BJP has to remember that if it comes to power – and that remains a big if – then it will have to face the same political/regulatory/administrative environment. Its in its own interest to work with other parties in bringing balance back, in stopping from calling every administrative and political decision corrupt, and in calling any one party the “most corrupt in history”.
The real truth is that our constitutional bodies – CAG, SC – and important institutions – like the CBI – have hurt the country. This is no “clean-up”. This is just “self preservation” or rather “saving one’s as$”. This is a form of “Indian spring”, something that may hurt the present government most immediately, but which may leave a far longer spell of instability (like in Egypt) than we are imagining…..