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Wednesday, October 27, 2021

The unfortunate social costs of Coalgate and such scams


ARINDAM CHAUDHURI | New Delhi, October 25, 2012 17:13

India’s scams and corruption are perennially ubiquitous – they keep recurring time and again. There is hardly a month that goes unnoticed without any major scam breaking out. It is not that there isn’t any scam elsewhere, but barring some sub-Saharan and Asian rogue states ruled by the junta, the scale and magnitude of Indian scams have outperformed every other nation by an unprecedented margin of frequency and scale. Typically, a scam exposé starts off with media frenzy and then gets lost into thin air! The typical Indian middle class’ short memories, inevitably brushes the scam off, and then the judiciary typically bails out the accused, and everything is business as usual. Even though media spotlight continues on the case for a while, the same mostly focuses on the economic aspect of it, largely ignoring the enormous social impact. Mostly, the multi-million dollar scams that prop up every now and then have huge negative externalities both at the regional and national level.

Let me talk a little about the recent scam, which has been rocking the nation – Coalgate! Coal mining – the lifeline of thermal power that constitutes around 66 per cent of installed capacities in power generation in India – is very inefficiently run, and I’m being graciously modest when I say that. The sector is marred by massive pilferage and corruption with open disregard to environment and conservation. However, there are many other serious ground concerns that have been missed amidst the entire current hullabaloo. To start with, the mandatory regulation of open cast and underground mining requirement is flouted openly, causing health hazards on account of environmental degradation per se. The corruption level is beyond one’s wildest imagination. Sample this: even the sand purchased to fill the old mines is being sold in the open markets for petty gains!

There have been waves of protests in most of the coal mining states – particularly socially conscious Maharashtra – against pollution, environment hazards, and land acquisition... but nothing much was done. Land procurement is done by the government, and also by the private coal mining companies, which have very little respect for the laws, and who have very little good-faith negotiations with the land owners! And mind you, these activities are on since decades, even before any coal scam was discovered.

Take the case of Coal India Limited (CIL) for instance. CIL, which controls almost half of the country’s energy requirement, dishes out freebies like selling around 80 per cent of the coal with up to 70 per cent discounts on landed cost, ostensibly so that the poor can get subsidized coal! In reality, the gain actually goes to the power companies, who sell power at market determined rates despite sourcing coal from CIL at discounted rates. Non power companies too don’t allow the CIL discount to be passed on to the end user.  They either sell the discounted coal to third parties in the value chain or sell them directly to final consumers at market prices and at huge profits. And yet, the government defends CIL as a body that is committed to provide subsidized coal to the poor.

The coal mines also ruin the environment by destroying forest cover and even encroaching on animal reserves. Most of these mines are in ‘no go zones’. The coal mines of Madhya Pradesh, Chhattisgarh, Jharkhand and eastern Maharashtra are cases in point that brought the humans in direct confrontation with tiger reserves. The provocations of coal mines are also having telling effects on the tribal groups in these areas, whose sole source of livelihood is the forests. And this is the same story everywhere and every time – that after a few years, a once green belt turns into a rocky terrain, which eventually becomes unfit for human habitation. Thus, inhabitants of the region are literally being forced to divorce their livelihoods, their homes and their way of life. Occasionally, the uprooted tribal groups are offered menial jobs in the coalfields, but that’s hardly any compensation considering the damage bestowed upon them by coal mining companies. The counterbalance behind the wisdom of coal mining, which is electricity, still leaves 40 per cent of India’s population in perpetual darkness! So, the bottom half of the population clearly is not the beneficiary of thermal electricity – either directly or even indirectly. Add to this, the money spent by the poor in the mining areas for treating ailments caused by inhaling coal residuals that are left in the open; not to forget untimely death, which is still a norm in such regions.

The story of the social cost of the coal mining scam does not end here. Surprisingly, only 50 per cent of electricity generated in India is billed, of which only 40 per cent of consumers pay the bill regularly. Power theft costs the nation around Rs.40,000 crores annually. Today, even a rich politician gets free power. And of those who don’t pay bills, rich MPs and their ministries top the chart. Even government departments don’t pay bills (including courts); and above all, vote-hungry politicians are found waiving off electricity bills to the tune of thousands of crores. This, in the light of the fact that hundreds of villages are yet to see some kind of light. In simple words, the losses faced by power companies due to thefts, waivers and free electricity lunches are passed on to the bottom 80 per cent through high electricity costs per unit, erratic power supply, blackouts, frequent power cuts, inflated bills, and above all, opportunity costs. Imagine the economic and social loss a small businessman would face due to such power failures or the additional cost he has to bear as he eventually has to rely on a diesel-based generator! This is evident from rising electricity costs per unit since the last half a decade! And mind you, I have not even started talking about the indirect cost one has to bear with respect to increased fuel prices and food prices – both of which have a direct correlation with power supply and power cost.

What makes Coalgate and similar scams different from their counterparts is the way they impact the common man’s life. Scams today have become inevitable and are a sacrosanct fact of the Indian economy. Like every other notable scam, Coalgate also vividly paints the dark hues of the Indian business environment. For one single Coalgate to happen, the entire social cost is forced down the throats of the poor. For the poor, it is a perennial battle for their lives and livelihood. And that too without even getting to bear the fruits in the process – thanks to the artificially created power shortages. It is no secret that without power, the fruits of development cannot percolate down, which otherwise could have enriched the lives of families living below the poverty line and helped them to climb up the social ladder.

So it is not just about the crores that get swindled with every such Coalgate scam; it is more about the social costs that the nation bears... costs that have a wider impact and almost always go unnoticed.

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Posted By: Alferensia | London | November 16th 2012 | 05:11
You are not alone my Indian friends! There are equally sized scams in Greece these days. You are welcome to visit and find out for yourselves any time.
Posted By: ramdas | Baroda | November 15th 2012 | 08:11
We should have fewer leaders, we should have even lesser NGO organisations. Each NGO can identify with one cause only so that the results can be visible. The large number of leaders and NGO organisations only increase the ill-effects.
Posted By: naresh | Mumbai | November 15th 2012 | 08:11
Sir, I think the time has come for all of us to do something for the nation, we are willing to support if some intteligent people can come forward with some solution.
Posted By: Mukesh kumar singh | Rourkela, Odisha | November 17th 2012 | 10:11
We have to now take the initiative through FB or twitter to expose their evil nature.
Posted By: DR NARESH VERMA | Amritsar | November 15th 2012 | 07:11
Great, classic.
Posted By: ruhi | Bhopal | November 14th 2012 | 11:11
very nice article, you raised a very important point that our govt and news channels forgot, you showed another side of these scams.
Posted By: Rabin Viswa Sasanker | Hamiltonganj, West Bengal, India | November 14th 2012 | 07:11
Voice of a conscious citizen towards social and national impacts resulting from corrupt practices and profiteering. The rampant corruptions and the resulting effects are matters of great concern. The theory of "of the people, for the people and by the people" has been limited to the books of political science. The indifference of the government (i.e. the people) has more to contribute towards such scams and scandals. It is the necessity on the part of the people of India to be more conscious citizens rather than sentimental voters. The thoughts above is desirable to be as simple as to reach the minds of lesser educated persons which constitutes more or less two-thirds of the people. Please, keep going on. Thank you.
Posted By: zabi davanagere | Davanagere | November 13th 2012 | 07:11
It's our bad luck. We know everything but can't do anything about it!
Posted By: ksudhakarbabji | Visakhapatnam | November 13th 2012 | 06:11
People must change. Politicians are selfish. Religious leaders are using religions sentiments for commercial reasons.
Posted By: Harish Nirmal | Mumbai | November 13th 2012 | 03:11
Sir, you have given the true picture of the politicians.
Posted By: Ram Prakash Pandey | Alwar | November 13th 2012 | 01:11
Good article
Posted By: Ram Prakash Pandey | Alwar | November 13th 2012 | 01:11
Good article
Posted By: Jag Rawat | New Delhi | November 12th 2012 | 19:11
Social leadership should overtake decadent politicians' mechinations as the Body Politic could be cleaned by Social Compact Leadership. Social Innovations have to learn to be more and more incisive to ward off attacks on it through sweeping remarks to dub it CIVIL SOCIETY GROUPS, NGOs and CONSTITUTIONAL SAFEGUARD INSTITUTIONS. All are under attack by Body Politic. I believe something of a traumatic attack is being done on Body Politic. Its reaction and reactionary tactics might be dangerous too but that is what Social Innovators have to learn and adapt ways which can counter its growing lethality and virulent behaviour. Gandhian methods are the only mainstay as well as we now have to remember Tagore when he says WHERE SPIRIT IS FREE!!! In India,no body should dare to block SPIRIT OF NATION. NATION'S UNITED SPIRIT is finding expression, let it find its genuine oultlet!! We all, including BALWAN, should NOTE it. LET THERE BE LIGHT in which DARKNESS could VANISH.
Posted By: Baldev raj | Pune | November 12th 2012 | 12:11
Sir,you have given the true picture of the politicians working but as they are totally deaf n dumb, we feel there is a need to change the definitation of politics, which could change the entire system altogether .
Posted By: Shashank Pawar | New Delhi | November 13th 2012 | 00:11
Mr. Arindam Chaudhury, I know that you are much concerned about our country. I would request you to enter into politics and change the system because you are educated and wealthy not to mention you are in the press. My vote will be for you. Long Live India!
Posted By: Atul | Mumbai | November 12th 2012 | 02:11
Very unfortunate, congress should be blown away, all the culprits should be hanged till death and all there wealth should be used for poors.
Posted By: A. Bharathkrishnan | Chennai | November 12th 2012 | 02:11
Great topic, agreed.. Comments on the middle class mentality, agreed.. No offence taken but sadly it is the middle class that reads, tweets, shares and moves on to wait for the next read... Not an expert though, is there am effective method to iterate and reiterate the society to not forget and demand an explanation until justice is served??
Posted By: chandra mohan sinha | Dhanbad | November 11th 2012 | 19:11
A topic written lucidly with a clear understanding of the facts and what should be done. If only this govt has the guts to prosecute the perpetrators of the coal gate scam, and we all know this is only a day dreaming. The whole govt is neck deep in the scams.
Posted By: B.P. Mehta | New Delhi | November 11th 2012 | 11:11
You are right in bringing out the magnitude of corruption in India, in any field, by politicians, bureaucrats, judiciary and even the common man. All are corrupt in India due to free for all atmosphere prevailing in this country. There are no checks. Even if some honest officers / judges try to do something in the interest of all, they are shunted out of their place. We have taken our freedom as granted and can do anything and pee anywhere we like. Actually people of Asia except Japan, need stricter laws to control and not freedom. Britishers were right and their rule was very much a RAM RAJYA. What have we gained by a free India? Hunger and corruption and deceit?
Posted By: k.Thiyagarajan | Melseeshamangam | November 11th 2012 | 11:11
Good article!
Posted By: I.Nelson Dominic | Chennai | November 11th 2012 | 09:11
But the real fact that bewilders me is that how do these parties keep coming to power even after so many exposes of their evil deeds in the name of public purpose...even though both the principal parties in the Parliament have a lot of dirt on them regarding corruption, murder, dacoity, rape etc. They still hold their seats tight. I am very much puzzled.
Posted By: kishor kaskar | Alibag - Raigad Mharastra | November 11th 2012 | 04:11
The politicians are the big curse to our nation. The electric companies should upload the electric bill of every politicans on internet & publicise it.
Posted By: Sandip Sureka | Dhaka, Bangladesh | November 11th 2012 | 00:11
A very important issue has been addressed here. But this is not the first time the issue of social costs of coal mining and related scams. What I was really expecting is a solution. Unfortunately I did not find any solution or even any directions. No one will disagree with the fact that without energy security India will not be able to go far along the development path. So what India need is more equitable and efficient energy sector. Hope the writer will come up with some solutions to in his subsequent articles.
Posted By: Guru | Mumbai | November 10th 2012 | 17:11
Here it is assumed that the scam has taken place and 180,000 lakh crores have been loss to the exchequer. The actual fact is this is the opportunity cost as calculated. This calculation has got many errors and the basis of how this figure is questionable. People tend to over react and pass on judgements even before it is proved in the court of law.
Posted By: DCS Raju | Hyderabad | November 10th 2012 | 17:11
Scams starting from Nagarwala through Bofors, 2G, and Coalgate all happen while Congress is in Power. Unfortunately, they have been in power most of the time after Independence. Why people elect such govt. Even after seeing the performance of govt headed by Vajpayee ji, is not under stood. Costs of corruption on society is enromous, and the only way is to eliminate scope for such Scams and implement laws strictly, logically and without exception. There should not be anything like free power, travel and all those for people in power. We can pay perks on CTC (CTGovt) basis to those in power and do away with all the freebies.
Posted By: Vinay | NOIIDA | November 3rd 2012 | 12:11
Good topic, but can be more effective by putting in more figures. Specially for making understand the cost take an example - in rural area/urban homes inverter is used due to erratic power supply - Average cost of branded Inverter battery is 10,000/- lasts for max 3 years. So 10,000/36 (3*12) months ~280/- so most of us are paying an additional Rs.280/- per month. Leaving alone the cost of Inverter, it's maintenance, limited charge, impact of appliances, etc.
Posted By: Vijendra Kumar | Jabalpur, Madhya Pradesh, India | October 31st 2012 | 11:10
I wish somebody posts a article on the Criminal Culpability aspects of various players involved in the CoalGate Scam. The TV Channels have muddied the water so much that it is well neigh impossible to have any idea as to who all are responsible in this mega scam.
Posted By: siddharth jain | Raipur | October 30th 2012 | 08:10
The most considerable issue is that our natural resources are used for personal benefits.
Posted By: jasleen | Kanpur | October 29th 2012 | 23:10
Indeed sir, I completely agree but just giving a thought over these scams or knowing about them won't just do. A spirit and a spark is needed.
Posted By: latika singh | Mumbai | October 29th 2012 | 18:10
Millions of poor people are suffering due to this. These politician should be punished severely. The politicians don't understand the situation of the Indian people.
Posted By: subramaniam | Malaysia | October 29th 2012 | 16:10
When are the people going to rise to hold the elected representatives answerable?
Posted By: Mohini Kamwani | India, Vashi, Navi Mumbai | October 29th 2012 | 11:10
So, the world thinks on the basis of our history. That Indians tolerated injustice for 100-150 years. First British rule/looting and now corrupt Indian politicians' scam. Are we waiting for one million Gandhis to come & liberate India from Corruption? Because one Gandhi will not be able to stop these millions of corrupt ministers/party heads/bureaucrats/Govt officers/police/some judges. Trust me even Mahatma Gandhi would say, "If I was alive today, they would have tried to bribe me also with Bapu currency notes carrying my photoā€¯!
Posted By: Amit Panchal | VASAI west | November 4th 2012 | 01:11
Facts is intolerable sometimes like this!
Posted By: Arun samal | Pune | October 29th 2012 | 08:10
These politician should be punished severely so that they understand the situation of millions of poor people who are suffering because them.
Posted By: j p pachauri | Agra | October 28th 2012 | 17:10
A thought provoking article.
Posted By: asesh lahiri | Kolkata | October 27th 2012 | 20:10
The article has focused on very important issues which are impending sustained growth and affecting livelihood of the poorest strata of the society among others.
Posted By: Asesh Lahiri | Kolkata | October 27th 2012 | 20:10
A thought provoking article, it indicates how rich is getting richer and poor is geting poorer. The process of utilization of natural resources still continues as happened in the colonial past with any regard to the livelihood of poor tribals dependent on forests. There is still lack of appreciation of the need of forest dependent tribals. In short all these actions are resposible for not having inclusive growth and large number of people are below poverty line. It is true we need energy so we need coal, simultaniously it should be seen at what cost in terms of displacement of tribals and their livelihood should be judged so that every citizen of the country get benefited and not at the cost of others.
Posted By: kavita | Godhra | October 27th 2012 | 19:10
Work is excellent but the awarness is proportional to corruption leading to scams.
Posted By: Kavita | Kolkata | October 26th 2012 | 20:10
Well researched and thought provoking
Posted By: rajesh sharma | Goa | October 26th 2012 | 17:10
India must learn something from the laws of some foreign countries that believes in instantly punishing the guilty without a second thought. India must learn something from the laws of some foreign countries that believes in instantly punishing the guilty without a second thought.
Posted By: Dewan Mukesh Manglani | Karachi sindh | November 11th 2012 | 13:11
Posted By: neha | New Delhi | October 26th 2012 | 17:10
We need honest people in the ministry at the moment.People in India are sick of continuously listening about so many scams.
Posted By: jamshed | Saudi arab | October 29th 2012 | 05:10
We need every people in my country to fight against corruption.
Posted By: Amit | Gurgaon | October 26th 2012 | 17:10
I wish Arvind Kejriwal would do what he wants to make our country better.
Posted By: Tatan | Gujrat | October 26th 2012 | 17:10
Such scams can do nothing but only bring shame to the nation and its people.
Posted By: pankaj bhagnani | Mysore | November 16th 2012 | 04:11
Posted By: Atanu | Mumbai | October 26th 2012 | 17:10
All these corrupt people and minister should be straight away put behind the bar for all such scams.
Posted By: pratik kumar | Gurgaon | October 26th 2012 | 17:10
It's high time that serious actions are taken against all people involved in these scams.
Posted By: karan | Delhi | October 27th 2012 | 13:10
It's time we should think about the nation and people instead of voting corrunt and good for nothing politicians.
Posted By: rishikesh ranjan | Bs city, bokaro jharkahnd | October 26th 2012 | 12:10
I think that the the above scam is very sad for our country. We should introduce a good system for the governance of our country.
Posted By: P Gandhi rajan | Chennai 91 | October 26th 2012 | 17:10
It is rightly pointed out that there rarely passes a day without surfacing a corruption. Good people with social service mentality should contest and elected to power in the election. To lead to the situation, punishment for indulging in corruption should be made vigorous and such people should be treated outlaws.
Posted By: rajan p kaliyath | Kochi | November 10th 2012 | 19:11
We book people who steal a loaf of bread, who sell their body for a day's meal to nourish their body, who attempts suicide due to harsh life situation, poverty and hunger but the big looters always go unpunished, alas that is now our fate, can we not change this?
Posted By: E.Parameswara Rao. | Phoenix,Arizona,USA (On visit) | November 12th 2012 | 23:11
I am reminded of a poem written in the book Panchatantra. I am putting it here it's English version: The wind is a friend to forest fire and causes it to flame higher; The same wind blows a candle out. Who cares. What poor folk are about? Here the wind is Indian Government, the corrupt are like forest fire and the candle represents poor people.
Posted By: pankaj bhadoria | Mysore..india | November 16th 2012 | 04:11
Wow! What a answer Vishnu!
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