Blow for public integrity

Updated - November 16, 2021 11:10 pm IST

Published - August 27, 2014 12:12 am IST

The Supreme Court verdict holding coal block allocations made since 1993 illegal confirms a long-known, but little-acknowledged malaise pervading the administration: cronyism often overshadowing merit, and systems and processes being undermined by power and influence. The sweeping nature of the finding that allocation of coal blocks through the government dispensation route as well as through a non-statutory ‘screening committee’ suffered from arbitrariness is a fierce indictment of successive governments, rendering it difficult to apportion blame on any particular party or regime. Rather, as the judgment points out, the approach was ad hoc and casual. There was no fair and transparent procedure, and this resulted in unfair distribution of national wealth. The judgment, in essence, sticks to the constitutional norms the Supreme Court has been applying since the time it cancelled 122 telecom licences in 2012 based on the finding that illegal allocation of 2G spectrum had been made. Of course, a Constitution Bench has now calibrated the law that once tended to make competitive auction the sole basis for the exploitation of natural resources, and given some policy leeway to the government to adopt alternative methods, subject to constitutional principles being adhered to. The court will deliberate on the consequences of its findings in further hearings, but it has already sent out a clear message that it will no more countenance arbitrary and illegal allocation of natural resources.

Political parties may seek to blame one another, and industry may count its losses and lament the verdict’s impact on the cost and availability of power and the cost of importing or transporting coal. Some may fret over the viability of existing projects and the fate of investments already made. They may calculate the impact on financial firms with exposure to this sector. All these factors will now be weighed by the Court when it sits again to decide whether to cancel the allocations or find a just alternative. It has clarified that its verdict will not touch ongoing probes by the Central Bureau of Investigation and the Enforcement Directorate into illegalities committed in the allocation of coal blocks. The judgment also exempts 12 coal blocks linked to Ultra-mega Power Projects that were allotted on the basis of competitive bidding. Those who consider the public interest paramount and are concerned about good governance and the integrity of institutions will doubtless welcome this judgment. The tasks that remain are, first, to disgorge the windfall gains made by the players in the scam; second, to save the mining and power sectors from the consequences of the illegal allocations; and third, to bring to book those guilty of criminal conduct.

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