India’s Coalgate scam –How the Congress mishandles it

August 29, 2012 at 3:34 am | Posted in Uncategorized | Leave a comment
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Waiting for winter

(Hindu editorial August 29, 2012)

When the monsoon session ends, can the winter session be far behind? This seems to be the operating principle of the United Progressive Alliance government as it seeks to weather the storm created by the Bharatiya Janata Party in Parliament over the damning report of the Comptroller and Auditor General on the allocation of coal blocks. Of course, there is no way the UPA could have conceded the Opposition demand for the resignation of Prime Minister Manmohan Singh on this issue. But one of the ways for the government to break the logjam would have been to offer to cancel all the coal block allotments and introduce competitive bidding as originally envisioned in 2004. However, from the defence mounted by the Prime Minister — who held the Coal portfolio during the period of allocation — to the combative stance of Congress president Sonia Gandhi, everything points to the government preparing to keep the fight on the political plane. Instead of addressing the growing public perception of corruption in the wake of the CAG report, the Congress seems bent on discrediting the principal Opposition party. The reasoning is that the BJP, whose Chief Ministers in Rajasthan and Chhattisgarh opposed competitive bidding, does not have the credibility for a sustained offensive on this issue, and will soon run out of breath. Other than seeking to clarify the points made in the CAG report through the Prime Minister’s statement in Parliament, the Congress is not willing to make any concession to the Opposition.

The government strategy to hold the ground until winter sets in is neither politically prudent nor morally defensible. If one were to accept Finance Minister P. Chidambaram’s argument that there was no loss in the allocation of coal blocks as the coal has not been “taken out of mother earth,” then surely the proper course would be to ensure that the companies which benefited from the discretionary allocation of the blocks are not allowed to profit from the coal that still remains unmined. The problem, of course, is that the government’s defence of the allocation is varied, full of holes, and contradictory. Apart from blaming Opposition-ruled States for the non-introduction of competitive bidding, the Prime Minister has disputed the computation of loss by the CAG, and pointed to the possible earnings for the government through taxation of the gains of the private parties. Thus, one defence of the government is that there is no loss because the coal is not mined; another is that the loss is partly offset by taxation of the mined coal. If only the government were ready to own up past mistakes, it would not have seemed so hurried in the defence of its policies, and so clumsy in its attacks on the Opposition.

Political brinkmanship or political ineptitude .. (My view)

The Congress Party has taken its fingers away from the pulse of the ‘Aam Aadmi’. This is what comes out of the way Sonia was seen gesticulating to her party MPs to confront their BJP adversaries who have disrupted the proceedings of the Parliament from the beginning of the monsoon session. Perhaps, she wants a Congress-driven raucous to counter the BJP-led raucous. This is unfortunate.

With so many MPs fawning over her and Rahul, her political astuteness has been blurred. This is why she feels that the Prime Minister’s laboured explanation of the government’s stand on the Coalgate would convince the citizens that the arbitrary allotment of coal blocks was just an unintentional administrative lapse and not a well-thought fraudulent act as portrayed by the CAG. The work done by the CAG is so meticulous and the observations so damning that no amount of spin can undermine the public rage over the UPA-led government’s frittering away of the national resources. Manmohan Singh’s aura of honesty has faded for good.

The Prime Minister’s explanation had two planks. First, the CAG’s assessment was disputable. Second, the companies who made profits from such arbitrary allocation did pay more tax because of the higher profits they made on getting coal at throw-away prices. Not even a college level student of Economics, least of all an eminent economist like Dr. Singh, should advance such a farcical justification. Unknowingly, Dr. Singh has enraged his countrymen more by stating such a reason.

The Congress Party has assumed that they can wait out the belligerent BJP in this session, and will be back to normal business in the coming winter. They feel that BJP’s hands are equally sullied in the Coalgate scandal, and this will result in BJP faltering in its Coalgate campaign over a period of time. It is nothing but wishful thinking. The nation has been so badly buffeted by the succession of corruption scams that the shear depth of public anger will prod the BJP to continue to be belligerent, causing the Congress much discomfiture and loss of face.

The best way forward for the government to establish its good intentions would be to cancel all the coal bloc allocations en masse and go for competitive bidding instead. Such a drastic step can go someway to mollify the citizens of this country. This step also can take the wind out of the BJP’s sails.

Clearly, Congress Party, under the present leadership, is not ready for it.

The Prime Minister and the Finance Mister jointly hold the key to the nation’s treasury. Safeguarding nation’s resources is a duty more sacrosanct than saving the Party’s face. By not agreeing to re-auction the coal still embedded in mother earth (Chidambaram’s phrase), both the functionaries have abdicated their constitutional and moral responsibility. If the 2G licenses could be cancelled and re-auctioned, why not the coal? The people would like to know.



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