Coalgate

Last couple of months have witnessed huge controversies here in India on the issue of auctioning of resources and government projects to the highest bidder as serious allegations of corruption have surfaced. India has been reeling under the multiple issue of corruption, price rise, unemployment, falling rupee and falling GDP for a long time now and there seems no way out. A sense of despair has descended on the common Indian. A sense of utter directionless and spineless on the part of the UPA government as to how to handle these issues has made things worse. The UPA government is reeling under a serious policy and decision paralysis.

The latest and the biggest skeleton that has tumbled out of the UPA government’s closet is the CAG report on the coal scam where the government auditor has alleged that there was huge loss to the national exchequer on the allocation of coal fields. The CAG in its report has mentioned that due to the undue favours granted to favoured companies, the nation lost around Rs 1,84,000 crores. If this is proved, it would be the mother of all scams in India and perhaps one of the biggest scams at the global level. The biggest irony is, when the allocation of the mines had taken place, the Coal Ministry was under the honourable Prime Minister of India, who is known for his integrity and honesty. The question is, how could all this happen under his nose? Was Dr Singh not aware of it or is he the modern version of Queen Gandhari from Mahabharata?

Auctioning of public and national resources is a practice which is experimented upon and implemented by many governments across the globe. If done with utmost care and in a proper manner, it is one of the most lucrative modes of
distribution of public resources to potential private players and the government earns maximum profit out of it. The resources which are collected through the mode of auctioning can be utilised for social schemes aimed towards public welfare as well. However, if not done under proper supervision, through proper channels and under proper, lawful means, it can be one of the most corrupt modes of distribution of public and national resources and there can be huge loss to the national exchequer.

The West, especially countries like USA, UK, France and Germany, and Asian countries like Japan and Singapore have this flourishing practice of auctioning where utmost care is taken at the time of bidding and also during the actual allocation process. Proper verification of the credentials of the companies concerned is done and many who do not fulfil the selection criteria are automatically rejected. Even during the bidding, utmost care is taken so that none of the companies can try to influence the authorities concerned or use foul and financial means to bribe the officials. Usually, representatives from the legal fraternity, the police and political representatives are present during the time of auctioning. Even after the auction is over, another scrutiny is conducted to cross check the credentials of the successful bidder and if any foul play is suspected at this advanced stage, the order is cancelled.

In the case of India, the bidding process which was carried out during the awarding of contracts in the CWG, 2G spectrum or for that matter in the allocation of the coal mines in the latest scam, none of the existing procedures were followed. Why was the allocation of coal mines not done under the system of highest bidding when there is a law existing regarding this? Who benefitted from the coal mines auctioning? Why were the mines allocated to companies which had no history of mining? Who were the officers involved in the bidding process? Were there any legal authorities who represented the ministry and the government? These are the serious questions that need to be asked. If the bidding was so neat and tidy, then when the Supreme Court cancelled the tenders of all the companies concerned, why did the Government of India not argue that the licenses should not be cancelled. Why did it keep quiet in the court both in the present case as well as in the case of the allocation of 2G Spectrum? The silence of the government in the court proves its complicity.

Now if the government argues that the report of the CAG is baseless and the CAG has overstepped its limit, then the Prime Minister should answer all the questions and clear all the doubts to the nation. But the question is, does the government have the courage to do so as the government also knows the reality. The best that the government can do is beat around the bush as was evident from the press briefing of the Finance Minister recently. It is this reality which has come back to haunt the UPA government pretty badly. 

(The views expressed by the author are personal)