Culture of Indian Democracy and Closure of Coal Gate

Two seemingly unconnected events reported today in Financial Express actually dovetail so neatly as to look like two sides of the same coin.
The five aphorisms told at a lecture on “Culture of Indian Democracy” [reported in FE] by Lord Bikhu Parekh, political theorist and member of U.K.’s House of Lords would sting us hard, but there is no denying how true they ring.

1] “It is not easy to bring black money back. Even if it comes, it will not eliminate poverty, as claimed by many. It will actually increase the inflation. But, don’t worry, black money will not come back in near future, as several politicians are also having money in such bank accounts”…2]India has done fairly good in establishing the institution of elections, we are yet to democratises the old colonial system, where politicians and police were put above you. This is the main cause of problems in India for last 67 years. People still fear the police, civil servants fear politicians”…3]India ranks 67th in Global Hunger Index. Even Pakistan is doing better with 59th rank. Against 5 pc in China, 44 pc children in India are malnourished”…4]Poverty is not accepted as social responsibility by citizens. That is why, a poor man standing on street doesn’t get attention”…5]Here, I saw that security guard can’t dare to frisk a senior politician at airport, as he fears for his job. I saw traffic being blocked for hours to allow a politician to pass by first. This is unthinkable in western countries. We need to radically democratise the structure of state”.

Supreme Court just days ago had declared that all the coal mining blocks leases granted by successive governments (Congress/Janata Dal led third front/NDA-1/UPA-1 and 2) since 1993 are illegal because the procedures adopted were opaque and caused loss to the exchequer. It asked GOI as to why all these leases not be cancelled forthwith. The Coal Scam or Coal Gate as it came to be called sprung out of the Comptroller and Auditor General’s (CAG) report, which held that loss to the nation, actual or potential, and windfall gains to the private parties amounted to over hundred thousand billion rupees. CAG also deduced that the per tonne loss to exchequer comes to Rs. 295/-. Out of the 218 allotments of coal-blocks held illegal, 40 have gone into production and another 6 are about to commence production. GOI, therefore, made a “pragmatic” request to the court, if it would consider the operations in these 46 blocks proceed without hindrance as their tie-ups for coal supplies to thermal power plants were also in force  with two caveats:

1] “that the court could ask the companies operating the 40 functional blocks to compensate the government for the CAG-estimated loss to the exchequer of R295 per tonne.” and 2] “They could also be told to enter into fresh power purchase agreements with utilities so that the power produced from these blocks are sold at sub-market prices, factoring in the benefit captive coal“.

Attorney General Mukul Rohatgi made this proposal on behalf of GOI. CAG’s report stands fully vindicated by the stand taken by Union government before the Apex court. At the time when CAG report had become public in 2012, the stalwart ministers of UPA-II had trashed it. Some other interesting facts from FE report are:

The price of e-auction coal (which the power plants with captive coal will have to resort to in case of deallocation), is three times that of captive coal while imported coal at current prices could be five times more expensive.  Out of the 218 captive blocks that the SC deemed illegal, 105 belong to private companies. Of these, industry sources say 42 blocks are operational and they already produce around 53 million tonnes (mt) of coal, less than 10% of the country’s total output of the fuel. As per an estimate, captive blocks allocated so far were expected to produce 100 mt of coal by 2017.  Among the coal blocks currently under production are those belonging to private firms like Jindal Steel and Power (Gare Palma IV/1), its subsidiary Jindal Power (Gare Palma IV/2 & 3), Hindalco Industries (Talabira-I), CESC (Sarshatali), Monnet Ispat and Energy (Gare Palma IV/5), and Sarda Energy (Gare Palma IV/7). 

Would this judgement deter the loot of natural resources that takes place in this country through the nexus between venal politicians and crony capitalists? Unlikely, as those who failed to perform their duty honestly and as per the oath of their office would go unpunished. 
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