If you can’t bear the heat, get out of the kitchen

Some months ago, when the first draft of the CAG’s report on allocation of coal blocks came into the public domain, coal minister Sriprakash Jaiswal dismissed the findings as “notional and imaginary”.

As is his wont, prime minister Manmohan Singh ducked the bouncers for some time but eventually spoke up. He too was dismissive of the CAG’s findings as “uninformed allegations”. However, now that the CAG report has been tabled in Parliament, the “uninformed allegations” have become informed opinion of a constitutional authority and the government is running for cover.

The CAG’s findings constitute the most damning indictment of a government. The auditor says the government’s allotment policy was arbitrary and non-transparent and it resulted in undue gains amounting to Rs1.86 lakh crore to private parties. But what is the response of the prime minister to this?

Despite his publicly declared reticence, the prime minister has come up with a rather detailed response to the CAG report and tried to obfuscate the facts. The CAG has faulted the government for not taking the competitive bidding route. The sequence of events is as follows: The secretary (coal) recommended competitive bidding in June, 2004 and even warned that if this was not done, private parties would make “windfall gains”. Further, the law ministry opined in 2006 that the government should introduce competitive bidding. But the government continued the ad-hoc process until 2012. After conducting itself in a manner detrimental to public interest, the government now accuses the CAG of selectively reading the documents, implying thereby that this constitutional authority has an axe to grind. The prime minister claims that the CAG’s conclusions are “disputable”. This is unacceptable. Even more laughable is his implied claim that he ought to be complimented for trying (from 2004 to 2012) to bring in a legislative amendment to enable competitive bidding. Instead of doing so, the CAG has subjected him to “adverse audit scrutiny”, he moans.

Given the nature of the scam, the CAG has done an extensive investigation. Here are excerpts from a paragraph that take us directly to the core issue at hand – lack of transparency and fairness in allocation of coal blocks. The CAG says as per the minutes of the meetings of the screening committee, the committee considered the claims of all the applicants for a coal block and finally chose one allottee. “However, there was nothing on record in the said minutes or in other documents on any comparative evaluation of the applicants for a coal block which was relied upon by the screening committee. Minutes of the screening committee did not indicate how each one of the applicants for a particular coal block was evaluated. Thus, a transparent method for allocation of coal blocks was not followed by the screening committee”. This is indeed shocking, because a comparative analysis of the merits and demerits of every candidate is done and made part of the record even in the appointment of peons in government. But, the government has nothing on record to show why it chose a particular party for a coal block in preference to other applicants. There is only deafening silence from the government on this conclusion of the CAG. Needless to say that both the prime minister and the finance minister have no explanation to offer for such arbitrariness and gross misuse of governmental authority while allocating a precious natural resource.

We get another peek into this cosy, arbitrary world of coal block allotments when the CAG tells us how the government dealt with the bank guarantees of those allottees who failed to begin production in time. The ministry “could not” encash the bank guarantees “as the modalities for such encashment were still to be worked out”. As of November, 2011, lapsed bank guarantees amounted to Rs 312 crore. Is it not strange that some private parties are first favoured with coal blocks in the most non-transparent system of allocations. Thereafter, when they default, the government seems to baulk at the idea of encashing their bank guarantees. Why?

The government’s response is full of contradictions. The finance minister says all the allotted coal is still under mother earth. The prime minister says allotments had to be made without resorting to competitive biddings in order to hasten coal production to feed power, steel and other infrastructure projects. If this had not been done, it would have adversely affected India’s GDP growth. If the allottees are yet to mine the coal fields, many years after allotment, where does that leave the prime minister’s claim?

Since he is often criticised for his reticence, the prime minister fell back on Urdu poetry to defend his silence earlier this week. He said “Hazaron jawabon se achchi hai khamoshi meri…” (My silence is better than a thousand answers…). We need to tell Mr Singh that this couplet is inappropriate in the Indian context. The prime minister of the largest democracy in the world cannot and does not have the luxury of not responding to questions. This is a couplet that is fit for some one like Kim Jong-un, the Stalinist dictator of North Korea! As they say, if you cannot take the heat, you must get out of the kitchen.

The writer is a senior fellow, Vivekananda International Foundation