Coalgate Crisis Catches Chaos

While I am writing this column, the Parliament is facing a logjam and the Opposition is hell bent on asking for the resignation of the Prime Minister. However, the country is witnessing several ominous ills such as the violence in Assam, the resultant retreat by the people of the northeast from the other parts of the country. But I would reflect on the Comptroller and Auditor General (CAG) report’s laying bare the scam worth over Rs 3 lakh crore. The reason being that while other issues mentioned above have been provided the adequate space in the media, this loot has not been given the space it deserves, despite the fact that the amount involved in the scam burns an enormous hole in the pocket of the common tax-payer’s pocket. Registering a nasty blow to the Congress-led UPA government at the Centre, the CAG exposed the manner in which the biggest-ever loot of India’s scarce natural resources took place in its report tabled in Parliament last week, when it emphasised that opaque bidding process of coal mining cost the nation a whopping Rs 1.86 lakh crore. In another report, the CAG pointed out that the GMR-led Delhi International Airport Limited was virtually gifted the airport and surrounding land having a potential earning capacity of Rs 1.63 lakh crore. In yet another report, it found that the Anil Ambani-run Reliance Power got undue benefit of Rs 29,033 crore as the firm was allowed use of surplus coal from blocks allotted to Sasan power plant for its other projects. The total national loss that the exchequer suffered, as per the three reports, amounted to a massive Rs 3.78 lakh crore. The CAG report on coal brings to the fore the decision-making paralysis the Prime Minister’s Office perennially suffers from, which has led to the UPA being rocked with series of scams. In fact, so much sleaze has seeped out of this government’s closets in the past that it is no wonder that the CAG has become a national hero. Against this backdrop, it is lamentable that several so-called scholar writers have written columns in the newspapers supporting the government and questioning the integrity of the CAG through maze-like calculations, which are beyond the comprehension of the common man. It is clear from the reports that we need a fair and objective system for allocation of scarce natural resources that will also generate optimal value for the exchequer. The auction method, already mandated by the Supreme Court in its 2G judgment for allocation, has also been incorporated into the Mines and Minerals (Development and Regulation) Act. This is a fair method provided the auction process is well designed and transparent. But the process of bringing in transparency and objectivity in the allocation process of coal block, which commenced from June 2004, got delayed at various stages and the same is yet to materialise, and in the mean time 194 net coal blocks were allotted to different government and private parties up to March 2011.

The CAG has played an epochal role in exposing public malice in circumstances where the public authorities fear to take action on his reports. Though dependent on the legislature to take action on his reports, the CAG has exposed such astonishing facts and figures that the authorities were bound to take action on that.The government’s own claims for the reasons behind allocations do not stand to the reasons. The government affirms that it allocated these because Coal India Limited was not producing enough coals. But what is perturbing is the fact that almost none of the private players produced much coal either. So it is rationale to say that the private companies were allocated coal mines arbitrarily in the name of uplift of the people. It’s really surprising that in a country like India, where there is so much competition for even a clerical job, the projects costing crores of rupees are being allocated without any competition or auction. It’s only a type of corruption. We are proud of the CAG, which is really working as a real custodian of public purse. Instead of criticising such laudable work, the government should encourage the probity of the CAG. Today, the CAG’s office has been undertaking more performance audits than before and stress is on not only just on how much money flows out of the exchequer to make a purchase, but towards the economy and effectiveness of that purchase. For example, the 2G Spectrum allotment was scrutinized by the CAG who reported it as a loss to the exchequer, thus bringing to the fore the irregularity in the transaction. By now it should be abundantly clear to everyone that the government’s kitty of scams is almost full, from which it will be a Herculean task to extricate itself. Against this background, it is necessary to understand that the office of CAG audit includes Efficiency-cum-performance audit, which inter-alia stipulates that government money is spent properly for the purpose of which it was voted by the legislature, the purpose of which the expenditure was incurred has been achieved fully, the anticipated benefit of the project has been realised and reached the people for whom the project was approved by the legislature etc. The performance and the efficiency of the government expenditure and the observance of the rules and regulations framed by the government is duly followed by the department and brought to the notice of the government by the conventional audit reports. Even despite such an audit, the government continues to ignore the basic observance of rules and regulations framed by it. A democratic government cannot function effectively without a fearless audit and a vigilant judiciary and the government had better realise this.

Deepak Kumar Rath