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Shadow-boxing over coal scam

Publication Date : 20-09-2012

 

Repeated disruption drowned out the Indian Parliament's monsoon session. The Lok Sabha, the lower house of Indian parliament, worked for 20 per cent of its scheduled time, and the Rajya Sabha a mere 27 per cent. Only four of the 15 Bills tabled were passed. Of 399 "starred questions," only 11 were answered. "Question Hour," when MPs discuss topical issues, was held only once in 19 days.

The "coal scam", or alleged losses to the exchequer from the allotment of coal-mining blocks to private firms, estimated by the Comptroller and Auditor General (CAG) at a staggering 1.86 trillion rupees (US$34.79 billion), precipitated a vicious confrontation, raucous accusations, and even fisticuffs in the parliament. The Bharatiya Janata Party, which led this disruption, brazenly justified it. "Disruption can sometimes produce results that discussion cannot," said senior leader Arun Jaitley.

Clearly, the BJP has convinced itself that after "Coalgate," public opinion has turned decisively against the United Progressive Alliance -- a repeat of the Bofors scandal of 1987. However, the BJP may be counting its chickens too soon. It hasn't come out of the session smelling of roses. Its state governments too were neck-deep in the coal scam.

Besides, the BJP's own record on corruption is no better than the Congress's. And after the Anna Hazare campaign more or less unraveled, with some leaders like Arvind Kejriwal deciding to enter mainstream politics, the BJP's anti-corruption crusade has gone limp.

The UPA, like all neoliberal governments since 1991, is guilty of transferring valuable natural resources from public ownership to private interests. In the present instance, 57 coal blocks were allotted at cheap rates without inviting competitive bids to private corporations like Essar, Tata Steel and Jindal Steel for power, steel and cement production.

This has effectively allowed private corporations to gain control of about one-fifth of India's known coal reserves, among the world's largest. Many allotments reek of cronyism. Only one of the 57 blocks has reached the production stage, although the licence conditions stipulate that operations start 36 to 48 months. This has triggered suspicion that the companies invested in coal for speculative reasons.

The CAG has done well to point out these irregularities. However, the 1.86 trillion rupee loss estimate is notional, and involves subjective assessments and extrapolations. So the figure isn't a hard number. But such dramatic figures have a way of sensationalising India's political debate.

A crucial assumption underlying the CAG report is that the UPA government didn't invite competitive bids in 2005 on the ground that auctioning coal blocks would necessitate an amendment to the Mines and Minerals (Development & Regulation) Act, 1957. Building consensus on this would cause delays, and a loss in GDP and revenues. So the government found a rough-and-ready allotment route.

The CAG doesn't question the logic of urgency. But it insists that the auction route should have been taken by issuing administrative orders to allow the central government to grant mining licences. Such orders, it holds, would have substituted for a proper amendment to the Act. According to legal experts, this view is mistaken. Sound common sense also suggests that a statute cannot be amended through administrative orders.

The MMDR Act confers special powers upon state governments. They alone have the statutory power to grant mining leases. The centre comes into the picture only through a screening committee, which ensures, before the lease is issued, that the licence conforms to the requirements of central laws. The screening isn't a substitute for the statutory process

The states have persistently opposed moves to dilute their power to lease mines. They also explicitly opposed on July 25, 2005 the centre's proposal to switch over to competitive bidding. The most vociferous among them were BJP -- or National Democratic Alliance -- ruled states.

In fact, for all its (well-deserved) reputation for corruption and malfeasance, state governments ruled by the Congress account for only four of the 57 coal blocks. The rest are located in opposition-ruled states. Twenty-seven blocks, or almost half the total, belong to NDA-ruled Jharkhand. Next comes Chhattisgrah, with 13 blocks. Orissa follows, with nine blocks. BJP-ruled states, including Madhya Pradesh (two blocks), together account for almost three-fourths of the total.

By contrast, Congress-ruled Maharashtra has four blocks. Even West Bengal, then under the Left Front, was not free of the allotment malady. But it accounts for only two blocks.

So the true scam is not exclusive to the UPA. Rather, it's a collective or collusive scandal, with both the UPA-ruled centre and the non-UPA states reaching a "match fixing"-style arrangement to allot coal mines to shady business interests, while snatching them away from public sector companies.

That's the real issue which should have been soberly debated in teh parliament as part of a larger discussion of the neoliberal policy framework, which is uncritically accepted virtually across the political spectrum despite its proven bankruptcy in capitalism's heartland, so evident in Western Europe and the United States.

This framework assumes, contrary both to good economic theory and to actual experience everywhere, that private enterprise is inherently more efficient than state-owned companies, and can be trusted to obtain socially desirable results. This makes the privatisation and plunder of natural resources inevitable. Alas, this was never critiqued or debated.

The real, if not-so-obvious, question is why the dog didn't bark -- why the Congress didn't go to town on the dominant role of opposition-ruled states in coal block allotment. The only plausible, if incomplete, explanation is twofold. First, the Congress has lost some of its morale, self-confidence and even political instinct as a result of the recent political setbacks and humiliations it has suffered. Even rhetorically, it didn't focus on the culpability of non-Congress states until it was far too late.

Second, some of the Congress's own leaders and business cronies are involved in the coal scam. Coal minister Sriprakash Jaiswal, his former deputy Santosh Bagrodia and tourism minister Subodh Kant Sahai have been mentioned, besides MPs like Naveen Jindal.

However, this can at best bring cold comfort to the BJP. Its chief ministers in the minerals-rich states bear the primary responsibility for the under-pricing of coal as wielders of far greater statutory power than the centre. And its MPs and media barons close to it are also implicated. Indeed, Ajay Sancheti, recently appointed as Rajya Sabha MP at the behest of party president and Nagpur buddy Nitin Gadkari also stands tainted.

Politically, the Congress is in bad, indeed ghastly, shape. Many of its leaders are probably in the process of reconciling themselves to losing the next election. As a tired, effete Manmohan Singh becomes a liability, and Sonia Gandhi passively follows a hands-off approach to the government, nobody is about to emerge as a mobiliser and campaigner who can electrify the Congress into combat mode.

But then, nobody in the BJP is playing an equivalent or similar role either. As K.N. Govindacharya, RSS pracharak and former BJP strategist -- the ablest it has ever had -- puts it, a "BJP high command does not exist." The party has no leadership and "no coherent decision-making process;" it has alienated itself from the people.

Not only is the BJP bereft of policy alternatives. It's hard to see how it can improve its present tally of 116 of 543 Lok Sabha seats.

The writer is an Indian columnist.

 

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