Shadow-Boxing Over Coal Scam

By Praful Bidwai
REPEATED disruption all but drowned out the Indian Parliament’s monsoon session. 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 only held once in the 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 lakh crore, precipitated raucous accusations and even fisticuffs in Parliament.
The Bharatiya Janata Party, which led this disruption, brazenly justified it as more productive than discussion. Clearly, the BJP has convinced itself that after ‘Coalgate’, public opinion has turned decisively against the United Progressive Alliance — like in the 1987 Bofors scandal. 
However, the BJP is being over-optimistic. Its state governments too were caught neck-deep in the coal scam. Its own record on corruption is no better than the Congress’.
True, the UPA, like all post-1991 neo-liberal governments, is guilty of transferring valuable natural resources from public to private hands. In the present instance, 57 coal blocks were allotted at cheap rates without inviting competitive bids to private corporations like Essar and Tata Steel for power, steel and cement production.
This allows private corporations to gain control of about one-fifth of India’s known coal reserves, among the world’s largest. Only one of the 57 blocks has reached the production stage, violating the licence conditions. This suggests companies invested in coal for speculative reasons.
The CAG is right to point out these irregularities. However, the ` 1.86 lakh-crore estimate is notional, and involves subjective assessments; it isn’t a hard number. But such dramatic figures sensationalise India’s political debate. 
A crucial assumption by the CAG is that the UPA government did not invite competitive bids 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. So a rough-and-ready allotment route was found. The CAG doesn’t question the logic of urgency. But it insists the auction route should have been taken by issuing administrative orders to allow the central government to grant mining licences. Such orders would have obviated the need for amending the Act.
Legal expertise and sound common-sense suggest this view is mistaken. A statute cannot be overruled by administrative orders.
The MMDR Act confers unique powers upon state governments to grant mining leases. The Centre comes into the picture only through a screening committee, which ensures that the licence conforms to central laws. The screening isn’t a substitute for the statutory process.
The states have persistently opposed moves to dilute this power. They also explicitly opposed in July 2005 the Centre’s proposal to switch over to competitive bidding. The most vociferous among them were BJP-ruled states.
In fact, for all its (well-deserved) reputation for corruption and malfeasance, states ruled by the Congress account for only four of the 57 coal blocks. The rest are located in Opposition-ruled states. BJP-ruled states alone account for almost three-fourths of the total.
Twenty-seven blocks, or almost half the total, belong to NDA-ruled Jharkhand. Next come Chhattisgarh, with 13 blocks. Orissa follows, with nine blocks.
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 a collective or collusive scandal, with both the UPA-ruled Centre and the non-UPA states reaching a “match fixing”- style arrangement to snatch coal mines away from public sector companies and allot to shady business interests. That’s the issue which should have been debated in Parliament as part of a larger discussion of the neo-liberal policy framework, which is uncritically accepted virtually across the political spectrum despite its bankruptcy so evident in Western Europe and the US.
This framework assumes, contrary both to good economic theory and to experience everywhere, that private enterprise is inherently more efficient than state-owned companies, and will produce socially desirable results. This makes the privatisation and plunder of natural resources inevitable. Alas, this was never critiqued.
The pivotal question is 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 its recent political setbacks and humiliations. Even rhetorically, it didn’t focus on the culpability of non-Congress states, until too late.
Second, some of the Congress’s leaders and cronies are involved in the coal scam. Coal Minister, Mr Sriprakash Jaiswal, his former deputy Mr Santosh Bagrodia and Tourism Minister, Mr Subodh Kant Sahai have been mentioned, besides MPs like Mr Naveen Jindal.
However, this can at best bring cold comfort to the BJP. Its chief ministers in mineral-rich states bear the primary responsibility for the under-pricing of coal blocks. And MPs and media barons close to it are also implicated. Indeed, Mr Ajay Sancheti, recently appointed as Rajya Sabha MP at the behest of party president, Mr Nitin Gadkari, also stands tainted.
Congress in Ghastly Shape
Politically, the Congress is in ghastly shape. Many Congress leaders are probably in the process of reconciling themselves to losing the next election. As a tired, effete Manmohan Singh becomes a liability, and Ms 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 a 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” and stands alienated from the people. Not only is the BJP bereft of policy alternatives. It’s hard to see how it can improve on its tally of 116 of 543 Lok Sabha seats.