The Prime Minister should cancel the discretionary coal block allotments and auction them to test whether they were given at a fair price
The parliamentary stalemate continues on one of the greatest corruption scandals in Indian history. Allocation of natural resources has been a subject matter of public debate in the last two decades, particularly with the entry of the private sector in infrastructure development. Minerals are an important natural resource. The private sector has a great role to play in development of mineral-based industries. However, the policy of allocation of these natural resources has been discretionary, thereby leaving ample scope for allocation on account of corrupt and collateral motives. It is, therefore, important that aware of the characters of polity and governance, discretions be eliminated and objective criteria be introduced.
Competitive bidding
Most tangible resources such as minerals, spectrum, oil and gas must be allocated only through a competitive bidding mechanism. The discretionary allocation of 2G spectrum resulted in a scam of disproportionate magnitude. It is now proven that Rs.1,658 crore fixed for an all-India licence spectrum in 2008 was not the market value of the spectrum then. Under adverse market conditions, the government itself in 2012 has fixed the base price for 2G auction at Rs.14,000 crore.
There has to be an equitable balance between the interests of the public exchequer and the optimum use of natural resources for economic development.
Whispers about misdemeanours in the allocation of coal blocks have been rife in the last few years. The government took a correct policy decision on June 28, 2004 that competitive bidding be introduced in the coal block allocation policy. For most of the next five years, the Prime Minister was the Coal Minister. The exploitation of coal blocks allotted between 2004 and 2012 is negligible. For most of these coal blocks, statutory and environmental permissions have not been given.
The Prime Minister’s argument that pending change of policy to competitive bidding, allocation was necessary for the growth of GDP is eyewash. None of these coal blocks has contributed to the GDP. They have only contributed to the huge valuation of the private sector allottees and a corresponding opportunity and real cost to the public exchequer.
The Prime Minister’s alternative defence is that his government was handicapped by the Opposition from the coal and lignite States to competitive bidding. In any federal polity, it is legitimate for the States to be concerned about the development of power production in their own States. Mineral-producing States have always been concerned about the minerals mined in their States. The Prime Minister overlooks the fact that coal as a major mineral is in the domain of the Central government. His government admittedly overruled the States in 2006. The present Minister of State, Coal, Sriprakash Jaiswal, admitted in Parliament on December 21, 2009 that the majority of States had agreed to the competitive bidding process. Thus to shift the blame to the States is a very poor alibi. Federalism cannot be blamed for the corruption of the United Progressive Alliance.
The Prime Minister’s statement is an assault on constitutionalism and constitutional authority. Instead of respecting the observations of the Comptroller and Auditor General of India (CAG) and taking remedial action, the Prime Minister has evolved a logic which is in defiance of ethical governance. His government’s policy is to subvert the institutions but if they assert themselves, to attack them.
The Prime Minister has no answer for the fact that despite the initial policy decision of June 2004, it was the Prime Minister’s Office which circulated a parallel note on September 11, 2004 highlighting the drawbacks in the decision of competitive bidding.
It was the Law Ministry that delayed the competitive bidding by first giving the opinion that administrative instructions were enough to switch over to competitive bidding. They then suggested an alternative that the Mines and Minerals (Development & Regulation) Act (MMDR) be amended. Over two valuable years were wasted and finally, when the MMDR (Amendment) Bill was approved by Parliament on September 9, 2010, the UPA government took 17 months to notify it. The tenders of competitive bidding have not been prepared yet as the government was so overenthusiastic in continuing the discretionary process in allotment. When vested interests realised that the doors of discretion were about to be closed, they queued up for allotments through the Screening Committee mechanism.
The Prime Minister’s final defence that the Screening Committee mechanism was fair and transparent is repelled by an observation of the CAG in Paragraph 4.1 of its report. The CAG has stated:
“It was also noted that the Screening Committee recommended the allocation of coal block to a particular allottee/allottees out of all the applicants for that coal block by way of minutes of the meeting of the Screening Committee. However, there was nothing on record in the said minutes or in other documents on any comparative evaluation of the applicants for a coal block which was relied upon by the Screening Committee. Minutes of the Screening Committee did not indicate how each one of the applicant for a particular coal block was evaluated. Thus, a transparent method for allocation of coal blocks was not followed by the Screening Committee.”
Ordinarily, Parliament is the forum for debate on the issue. The Public Accounts Committee (PAC) is the forum where CAG recommendations should be considered. Our experience of the recent past in relation to the CAG recommendations in the 2G spectrum allocation have convinced us that the ruling party has decided to subvert the parliamentary accountability available through the PAC. The PAC has been effectively made non-functional on that issue.
Legitimate tactic
Parliamentary obstructionism should be avoided. It is a weapon to be used in the rarest of the rare cases. Parliamentary accountability is as important as parliamentary debate. Both must co-exist. If parliamentary accountability is subverted and a debate is intended to be used merely to put a lid on parliamentary accountability, it is then a legitimate tactic for the Opposition to expose the government through parliamentary instruments available at its command. Presently, a national debate on allocation of natural resources is on. Left to this government, it would have distributed these resources for collateral purposes to its own favourites.
The Prime Minister must own full and real responsibility. Let him cancel these 142 discretionary allocations, put them on auction and test whether they had been allocated at a fair price.
(The author is Leader of the Opposition, Rajya Sabha.)
Keywords: Coal scam, coal block allocation, CAG report, UPA government, coalgate, 2G auction, natural resources, political corruptions
The issues raised by Mr.Jaitley hold a valid ground.However,the
opposition should be open to a debate,rather than stalling the
proceedings of the parliament.Also,this standstill is diverting a
discussion on the other reports by CAG, where private parties like
Reliance have been held responsible.It is very important that a proper
discussion followed by a heavy penalty on the defaulters should be
imposed so as to set an example.
In a country where the media is so overwhelmingly pro-govt, how can the opposition highlight its view? How many Indians watch the parliamentary proceedings relayed by the DD? The other channels would selectively show only the opposition "creating ruckus and behaving in an unruly manner", but not the treasury benches who with their overwhelming numerical strength do not give them enough opportunity. Today, the country is well aware how the UPA I won its vote of confidence on the Nuclear bill; even then the media blamed the opposition for showing the currency that they were offered and effectively sidelined the issue that in the first place, they were induced by money to vote for the govt. In such a scenario, of what use can a parliamentary debate be? Having said all this, I still feel that the opposition should accept for a debate within the parliament and through proper floor coordination rip the govt of its feigned innocence and show it for it truly is.
@ Mr. J. Rajagopal (Comment of Aug 28th 18:22 IST)- There is no need for Mr. Chidambaram to explain the Zero-Loss theory for the simple reason that it is not his theory, but a wording coined by media which you seem to have swallowed hook line and sinker. Read Mr. PC's actual statement, it makes sense and is quite logical.
As for the article above, all one can say is that the BJP were not elected to Parliament to oppose the govt in the press. This needs to be done in Parliament. Instead of stalling Parliament and wasting all our time, they need to debate their arguments with the govt on the floor of the house. In the entire episode so far, the BJP by doing this is smearing the black of Coalgate over themselves.
(1) Only solution to current stalemate is cancellation of coal block allocations. However, citizens are seeking answers to a few questions in this regard. (2)Would there be delays in commissioning of new power plants because of the cancellation of allocations and who would pay the cost of delays? (3) Would there be prolonged litigation by affected parties and would there be an adverse impact on coal production on account of cancellation of coal block allocations? (4) Whether similar allocations were made by NDA government and whether those also be reviewed and cancelled if they were in violation of rules? (5) What is opportunity cost of such wrong allocations and what steps need to be taken to avoid such wrong decisions? (6) Mr. Jaitley is also defending the indefensible by claiming that Parliament proceedings can be disrupted for days together. Citizens feel that his arguments are very weak.
Any person with any semblance of reasoning will agree with what Mr.
Arun Jaitley has stated. The PM has the recourse to cancel the
allotment and put them up for auction - no explanations or casting
doubts on the credibility of the institution of CAG are necessary. It
is not unreasonable to assume that the Screening committees can be
biased or influenced towards one bidder or the other, as we recognize
this as a fact of politics as it exists. It would be interesting to
examine the procedures followed by the screening committees and if
these screening committees agreed on allocations unanimously or were
there dissenting voices. Put everything on the table Mr PM - even if
you do not have authorisation from the higher command - put the country
first.
if newspapers and tv channels are enough for expressing one's
thoughts,then for what purpose parliament is made.rather then using
backchannels nda should come forward for real and ultimate debate on the
floor of the house.whether there allegations are right or wrong should
be proved on the public house.because this way is not going to hurt any
of the parties involved in the scam.start respecting our institutions
dear politicians.
Mr. Jeitley has rightly said however in today's paid media and Govt. has diverted the discussion from Coal SCAM to functioning of Parliment, and therefore I request Mr. Jaitley and BJP to annouce that on so called Public/Media demand on parlimant functioning, they will alow for the debate in parliment however they are well aware of the result of the debate would be "ZERO LOSS". Govt. will use the parliamentary debate as an eye wash and thus avoid accountability of any sort.
Most of the Indians are now talking about our cricket team beating the
hapless NewZealanders and our under nineteen team winning the world
cup.The thrashing we got in England and Australia was now only in
archives and nobody remembers the poor showing then.Now Coalgate is
doing the rounds in the media relegating 2G scam to the
backstage.Within a week we may forgot COALGATE scandal if India beats
NewZealand again we will talk about R.Aswin and continue our routine
life even if a much larger scam comes to light.No need for KabilSibal
or P.Chidambaram to explain the ZERO-LOSS THEORY to the public.Both
may be recommended for this years NobelPrize in mathematics for
inventing ZERO-LOSS THEORY to the world.
This is not the first time Mr.Jaitley and his party BJP stalling the parliment proceedings. Advaniji continues to believe that the present government is illegitimate. Parlimet debates have been hijacked by TV and other media. I hope now Mr.Advani will undertake another 'rath yathra'. The PM of India deserves a patient listening in the parliment. The conduct of BJP leader is extremely shameful.
The commentator seems to be trying to hide something between the lines.He seems to be trying to cover more realities than the P.M.Further what evidence does this brilliant legal practioner (who served as advocate to protect scamesters like Ketan Parikh) has about the personal benefit to Manmohan Singh or any other person got by allotting coal blocks?
While appreciating the points made by Mr.Jaitley, I find there is
still NO CASE AT ALL of any corruption in coal Block allocations.
There was an elaborate,well-defined procedure - to which the states,
the screening Committees were all Party - and the Prime minister comes
at the tail-end of the Process.
What is the point of AVOIDING A DEBATE in Parliament? A Parliamentary
Debate can be more effective in bringing out all these points and
their counter points - just like the PM's points and their counter
points.
Now, who is right and who is wrong and to what extent - is still
ENTIRELY DARK - thanks to the lack of a full scale Parliamentary
discussion.
An article, however,well-written, is still to be construed as ONE-
SIDED, just as the PM's defense also is to be construed so.Media
discussion on an issue which Parliament should be debating - is
another wrong things- not because Media debate is Bad ipso facto, but
because, Parliament is not debating it first.
The prime minister's defence is weak and the points made by Mr. Jaitley
are well reasoned. However, with continued blockage of the parliament,
the BJP has diverted the issue from the scam and its beneficiaries to
the functioning of the parliament.
Also, I wish someone makes a study of the companies that got the
licenses, who their promoters were and whether they had any connection
with those in power at the states or center
Resignation of ruling party doesn't provide answer for the current issue. We have already seen Common wealth scam, 2G spectrum allocations in the past. Public seeks corruption free India. No matter who rules, corruption has become ubiquitous in India.
Given how our politicians, no matter which political color tend to use their
"discretion" only to advance their personal interests, allocation of any natural
resources or projects on discretionary basis must be outlawed.
Most modern countries require that discretionary allocation only be permitted for
some unexpected, low-volume or low-budget tasks that crop up in day-to-day
business and which must be cleared immediately. Even these are to be then
submitted for audit in order to ensure that there were no vested interests behind,
e.g. that expedited processing was required, that the contracts were not artificially
split into multiple blocks to duck the upper limit, that the same contractor was not
always receiving all contracts etc.
We need a similar rule. Else, we will just be allowing our political caste to help
themselves from this all-you-can-eat buffet which our treasury represents.
@Baikadi Suryanarayana Rao: About the PM, its his responsibility to take
the right action. To remain mute on a national issue doesn't exonerate
him from not being party to the siphoned money. The point is not whether
BJP is more corrupt or Congress. The point is that present government
has jettisoned all their responsibility and accountability and we are
facing corruption of the highest order. One thing is for sure, the time
of this government is over. I hope we have some good alternatives during
next elections, otherwise Bharat Bhagya Vidhata.
@Mr. Rao. These are all games, aren't they! If not anything, I am just happy to see the BJP is finally in a winning position (atleast seemingly so) and I also hope that it wins this round, and the final game as well (but yea I know it's got weak 'players'). It's like everyone has got dirt on his shoulders. It's all about who got exposed and when. Why so much attachment with Mr. Singh?
Jaitley dismisses the recommendations by his CMs as routine, which
should easily have been dismissed. First I want to ask him what
minerals are deposited in Haryana that the lone BJP MP from there
Kisan Singh Sangwam wrote to the Coal ministry opposing the auction
route. Today a number of legislations are pending because of BJP
stalling the House. This is not new, every year at least one session
is being lost to stalling tactics of the BJP. Therefore Jaitley
dismissal of PM's argument holds no water. As for the states and
federalism, Jaitley all along spoke in two voices. He went hammer and
tongs at the Govt for not fighting terrorism effectively declaring
from the podium in press conferences and public meetings how the state
under Congress was soft and virtually a complicit in'Muslim terror'
and when govt brought in a mechanism he did a somersault
The Government is not answerable only to Parliament. It is answerable and accountable, as such, in its way functioning. The CAG's auditing process goes through well laid down processes and procedures. It is high handed of the Ministers to be dismissive, even contemptuous of an independent arm of the Government. This is an example of constitutional illiteracy and brazenness. Objecting to the BJP's decision to stall Parliament is a red herring. When will the Congress realise that silencing the BJP is NOT all that they need to do? The average citizen does not care what happens to the BJP. It can look after itself or not. Mr Jaitley's pertinent observations are couched in moderate language. Dr Singh certainly owes a responsible and considered explanation to his countrymen.
With due respect i want to ask the author that why dont he say this in parliament. I suppose a fruitfull debate is more legitimate tactic rather than disrupting the parliament where a lot amount of money is spend everyday.
While Drafting the constitution Shri Ambedkar said" The daily assessment is done by Members of Parliament, through Questions, Resolutions, No-confidence motions, Adjournment motions and Debates on Addresses. Periodic assessment is done by the electorate at the time of the election which may take place every five years or earlier. The daily assessment of responsibility which is not available under the American system is far more effective than the periodic assessment and far more necessary in a country like India. The Draft Constitution in recommending the parliamentary system of Executive has preferred more responsibility to more stability”.
Creating such disruptions and legitimizing it will pave a way when this weapon will be used in common basis.
Most definitely the Prime Minister should de-allocate the coal blocks so that they can be allocated at the right price. It is disgusting and painful and saddening that on one hand Manmohan Singh and his aide Montek Singh Ahluwalia indicate that there is no money for welfare schemes for millions of poor and try to ridiculously reduce the poverty line and on other hand lakhs of crores of National wealth is given away to richest of the rich. This money could be used for the development of the nation and upliftment of the poor. Mr.Arun Jaitley is straightforward in demanding the de-allocation of coal blocks -- hope the patriotic members of the Opposition Parties and the Ruling Parties do the needful so that the money can be recovered and spent on infrastructure, health care and education of the Nation.
The BJP government in Karnataka has crossed all limits in corruption.
This along with their incompetence in administration has resulted in
worst suffering for people of Karnataka. Crores have been siphoned off
from the coffers of BBMP by submitting false bills relating to
projects completed only on paper. Faced with a real threat of plague
breaking out and also after being severely admonished by governor the
government took some action to dispose of garbage rotting in
Bangalore. That too, it seems the private contractors are dumping the
waste in each other’s area. It is also a well known fact that the BJP
leadership in not comfortable with the only non-corrupt face of the
party that is Mr.Modi whatever his other drawbacks are. With this
background BJP demanding resignation of the prime minister whom even
his worst enemies concede to be non-corrupt is simply laughable.
The author is right when he says that the govenment should stop passing the buck and should accept the allegations.The states opposed the bidding method, and that too opposition ruled states,is no excuse.Most of the states had agreed and what lacked was political will to stop its people from filling their coffers.It is sad that Mr Prime minister ws the coal minister then and like any other case.in this case also he had maintained his silence.
I believe Arun Jaitley and the BJP does have a point in blocking the functioning of the pariliament. We have a situation where the PM of the country is accused of corruption and the charges are looking very legitamate just like the 2G scam. We know enough about the UPA that they will use this parliamentary debate as an eye wash and thus avoid accountability of any sort.
However, obstructing the working of pariliament is a dangerous trend as too much of this will mean that we do not have a functioning democratic system. Besides what about the bills that are supposed to be passed in this session of parliament.
One thing we all should learn from this episode is that it is not enough for a leader to be personally clean and adopt a holier than thou attitude. Inaction in the face of large scale corruption makes you equally guilty and accountable. And this PM was supposed to be the architect of modern India. A true tragedy.
Dear Editor and Mr Jaitley: This is a good article and coherently argued. On a side note, it is a known fact that the country is deficient in power and energy. With abundant coal reserves it is possible to overcome some of the limitations. However, we continually keep hearing of different state electricity boards requesting permission to import coal from countries such as Australia, Indonesia etc. Why is this? Is this an artificially generated scheme that benefits the import route rather than relying on our own reserves? The Sasan UMPP in MP is supposed to be a gas fired plant - with abundant coal reserves in MP, one would like to know why natural gas was chosen as feedstock?
I would like to ask Mr Jaitley a few straight questions. (1) What was the role of state government in the entire decision making process? (2) Is it not true that the coal blocks could not have been allocated unless they were first recommended by the states? (2) The States' representatives were part of the screening committee. Although in minority, if the process was not transparent and if their viewpoints were not considered in the screening committee, why they chose to remain silent for all these years? (5) While all these allocations were made in an irrgeular manner, which Mr. Jaitley must have been aware of, as he is the leader of the opposition in Rajya Sabha, why is the BJP chosing to stall the proceedings of both houses NOW on this issue and NOT when the allocationa were being made? (6) Has the BJP not failed to perform its role as the main opposition party by choosing to remain silent for the entire period of 2004 to 2010?
CAG is a constitutional body whose mandate was left for parliament to
define. Accordingly Parliament enacted CAG act in 1971. The statute
has not defined "audit" and left it to discretion of CAG. This was
necessary because audit has to keep pace with the changing forms of
governance.
Now, CAG is not only concerned with propriety (ie appropriation
according to law) but it also conducts efficiency audit. for eg.
performance audits of most flagship programmes..
CAG can even question a particular policy if it does not lead to
efficient utilisation of resources. Moreover it can even recommend
alternate ways to take due care of resource utilisation.
Here in this case CAG has every right to question the delay. Moreover
if you read the CAG report it has nowhere suggested new policy. It
only questioned why Govt has delayed its own policy.
I support opposition's demand of PM's resignation . Parliament is not
only a debating platform but an accountability platform.
Mr. Jaitley is correct in saying that legally the central government had the authority to do the
coal allocation as it deemed right after listening to the positions taken by relevant provinces.
So, in this sense the current government cannot escape responsibility for this fiasco. It
makes absolutely no sense to suggest that the government could not do the right thing and
have a competitive process for allocation without having a specific law authorizing it. God
knows that there are enough laws on our books exhorting and assuming that the government
would act honestly when selling national resources to private parties. On the other hand , Mr.
Jaitley's problem is that public has little trust in any political party. Regardless, the
government will do well by cancelling coalscam allocations and starting all over again.
People of India deserve that much, at least.
The objections raised are genuine, Prime Minister should take its onus,
how long such a a corrupt country will survive otherwise? This
parliament session will be remembered as COAL session in the history of
independence surely.
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