Indian coal allocation scam

The coal scam is not just an ordinary corruption story. It is a blueprint of many things that are going to haunt India in the years ahead: incompetence, myopia and a colossal abdication of responsibility.

The Opposition is right to demand that Prime Minister Manmohan Singh furnish some answers to the country. This is not a demand he can evade. Apart from being the head of the council of ministers, during the UPA’s first tenure, Prime Minister Singh was himself the coal minister for about three-and-a-half years. His coal secretary PC Parakh raised strong flags about the arbitrary and nepotistic ways in which captive coal fields were being handed out. Though Singh accepted this and suggested moving to auctioning coal fields in 2004 itself, it took six years for him to operationalise this decision. The rules of play are yet to be set.

It is true there was opposition to the policy change from the states — ironically even from the BJP and CPM who are now his most bitter critics. It is also true that every party and state government was a part of the screening committee that handed out largesse at whim. In that sense, every party is a part of this scam. But the prime minister cannot escape the fact that it was his government in power. Decision-making was his prerogative. And coal is a Union subject over which the Centre has complete authority.

But, citing coalition pressures, Singh repeatedly failed to act. Clearly, the silence of a lamb can sometimes be more harmful than the ill-intent of a wolf. But there is already enough heat in the public domain over this. What is perhaps far more alarming lies one layer beneath. 

The coal scam is not just evidence of dithering leadership, loss to the exchequer, or the, as yet unproved, speculation about myriad kickbacks and political favours. It is about a missing epicenter in governance.

The logic for allocating coal blocks in a panicked rush to private players was that thermal power plants and steel and cement companies were desperate for coal: the country’s growth and energy security was at stake. Yet, after the blocks were allocated, no one monitored whether these companies had begun to mine, or were competent to mine at all. 

They were allowed to squat on the resource, presumably to sell at a premium at a later date. They had also been given cheap coal blocks so they would pass the benefit on to consumers, but whether they were doing so was not monitored.

That’s not all. Public sector giant Coal India has 1.5 lakh hectares of coal-bearing areas at its disposal but is utilising only 25 percent of this coal. Also, existing power plants are functioning at about 40 percent efficiency. The global norm is 80 percent. Additionally, almost 40 percent of the already minimally-efficient power being generated is lost in transmission. Like food, electricity is rotting unused in many locations because of bad distribution. Yet none of these facts seemed to even feature, let alone impact, decision-making in a holistic way.

In January 2011 — perhaps aware of the growing mess around him — Prime Minister Singh set up a high-level committee under former finance secretary Ashok Chawla to suggest ways to overhaul the legal, institutional and regulatory framework around the use of all natural resources: minerals, land, water, forests, gas and spectrum. Such was the urgency, the committee was asked to file its report in four weeks. It submitted its report in June 2011. Two years later, nothing has moved.

At this very moment, therefore — even as report after report lies mute and helpless — the same crushing mess around coal is also playing itself out on all the other vital areas of our national lives: our rivers, our groundwater, our forests, our coastlines, our sandbanks, minerals, mountains and land. All of it is being indiscriminately squandered because there is just no cohesive planning and bird’s eye view informing decisions being made on the use of natural resources. There is no joining of dots, no comprehensive gameplan. No sense of a national future weighted against the present.

Be certain then. It’s coal today: it’s going to be water tomorrow. By the time we understand the disappearance of forests and coastlines and sandbanks is worthy of being called scams, it will be too late.

In the 10 years that he has ruled the most populous democracy in the world — without being an elected leader himself — Prime Minister Singh has been criticised for being an inadequate politician. By a strange trick of fate, are we now to discover he’s been an astute politician all along, but just a very poor administrator?

http://en.wikipedia.org/wiki/Indian_coal_allocation_scam