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The coal scam – one round of outrage, the next when the CAG report comes ..




A few days back, there was a leakage of a report that was supposed to be a draft CAG report on the coal sector. If people were surprised at the number of zeroes outlined in the 2G scam, the coal scam as outlined in the draft CAG report was many times larger, figures that are huge and which also give a sharp reminder of the huge amount of money and benefits controlled by politicians. The report outlined a loss to the public exchequer through the process of granting coal mines to private sector companies, with the allocation of mines being done through the Ministry of Mining, which was also coincidentally one of the portfolios held by the Prime Minister during part of the time period mentioned in the report.
There was some amount of pressure, but then the Government showed portions of a letter from the CAG which quoted his despair at the report being leaked to the media before it was ready, and also that there might be changes in the report based on the ongoing discussion, with the current Minister of the department stating that there was no problem (at least in this particular case they did not blame the report on some policy decisions taken by the NDA Government). Of course, the next day the Times of India published the full text of the CAG letter to the Prime Minister, which sought to portray that the distress of the CAG was over the leakage of the draft report, and that the report did not drastically change from what was published in the draft report.

Now, the news reports that are emerging are that the CAG report is not likely to be drastically different from the draft report that was leaked. The thrust of the report (the leaked draft report) was that while there was not much of a focus on any illegal acts (as opposed to the 2G scam where there was an aspect of criminal behavior in the actions of the telecom minister), there was a huge loss to the Government because of the allocation of coal mines to private sector companies, and this was a windfall gain to the private sector companies that were allocated the coal mines. Now, the reading that a lot of people have is that while the CAG has no information about any criminality, it is hard to believe that there was no special benefits involved in these allocation; especially when mining is one of the sectors that has huge corruption implications all over the country.
Sometime back, there was a report that the Prime Minister and Sonia Gandhi have been pushing for reduction of discretionary allocation authority so that the people have less incentive to use their authority for their own benefit and something that would reduce the revenue of the Government. In addition, during the 2G case, the Supreme Court stated that wherever there are scarce resources, auction should be the way forward for best realization. This part of the order was not bounded by any reference to telecom, which meant that the implication was for a number of different areas, and mining is one of the key areas that should be impacted.
Now, a lot of people have argued that not all precious resources should be auctioned (such as water), and there may be other policy decisions that are involved in such allocations, but the fact remains that with the authority and intention of Government under such cloud, even if the Government is right, the policy to be followed should be clear and not favoring anybody else.




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