Boom time for scams in India, and still counting

Coalgate has the government in a huddle.

By Rajiv Theodore

NEW DELHI: It is boom time for scams in India.  The going has never been so good for dubious deals that have been steadily eroding people’s confidence in the system. The numbers have been adding up with an alarming regularity only matched by its ever growing population. Pity there is no census on scams and if anybody has been chronicling these dubious events it could soon end up become part of an interesting subject in schools one day.

The latest to rattle the government has been the Railway Board scam where the Rail Minister’s nephew has been caught the other day for offering lucrative positions in the Board for cash. And to refresh memory there were the Chopper Deal Scam, Tatra trucks scam, the Coalgate, Antrix Devas Deal, The 2G Scam, Satyam, CWG (Commonwealth Games), Adarsh Housing Society, Vanishing Companies Scam, Hawala scam and so forth. And these are only some of the big bad deals that have surfaced, apart from scores of smaller scams that have plagued the nation.

Out of them the Coalgate scam is threatening to explode on the face of the ruling United Progressive (UPA) alliance led by prime minister Manmohan Singh. It led to an estimated loss of Rs. 185,591 crore loss to the Indian government which has been accused of distributing 155 coal acres to companies in an arbitrary manner instead of auctioning it out to the highest bidder.

Probes by the countries’ Auditor General have shown that  mining activity has happened in only 28 out of the 86 captive coal blocks which was to take up production during the five-year-plan period ended 2011-12. And they produced not even half of what was targeted from these blocks.

Coalgate is a more serious scam compared with the so-called first-come-first-serve allocation of 2G spectrum where the telecom companies who got the licenses to start mobile services without bidding through an auction process had launched services or sold the spectrum. The consumer had made hay as  prices dropped because of the entry of new players.

Coalgate did very little by way of augmenting the country’s coal output or ensuring uninterrupted fuel supplies to power plants. Also, permitting private commercial mining would have required amending the Coal Mines (Nationalization) Act – a politically sensitive and time-consuming affair; the captive coal block allocation process was projected as a practical alternative.

The report by the Comptroller and Auditor General (CAG) had said that the inability to push through the amendment was a subterfuge for ushering in the ‘policy’ of awarding coal blocks for captive use without any transparent method of selection. It had become very clear that certain vested interests were keen in blocking the legislation ending the public sector’s monopoly in full-fledged commercial coal mining.

Now a new recent twist into the Coalgate tale has the government scramming for cover, yet again. The Central Bureau of Investigation (CBI),  presumably the independent body that uncovers all the dirty deals in the country and which was also tracking Coalgate has acknowledged that on  the demand of Law Minister Ashwani Kumar, it has shared the status report of its investigations on the Coalgate scam with bureaucrats in the PMO and Coal Ministry. This shocking news shows how deeply the agency stands compromised.

The fact that the CBI chief was quick to assure the court that the bureau’s future status reports “shall not be shared with any [member of the] political executive” is ample proof that the CBI knew its original action was a serious transgression of procedure. But for the fact that the story got leaked, the CBI would probably have continued “consulting” the political executive.

While sharing the status report with the Law Minister prior to filing it in the Supreme Court is bad enough, the fact that the CBI was happy to have its findings shown to bureaucrats from the very ministries that are under investigation borders on interference with the criminal justice system.

Coming under severe flak from opposition parties, the government has been accused of  using CBI to further its objectives which they say ranges from using the bureau to garner support to manufacture a majority in Parliament to protecting those guilty of looting the country’s resources via the path  of ‘crony capitalism’.

The government is in a huddle today as the shadows of Coalgate has crept to the doors of the Prime Minister’s Office, mainly because Kumar was handpicked by Singh for being the law minister.

The Supreme Court will take up the case on May 8. The CBI is set to file a fresh affidavit in the case on May 6. The minister’s fate is likely to be known on May 8, as the Union Government and Congress, to which Kumar belongs, would keenly be watching what the apex court has to say on his controversial actions. Congress has given indications that it would not support the minister if the Supreme Court came down on Kumar whose only guilt was the “diligent proof reading” of CBI’s status report through the prism of his loyalty to Singh.

To contact the author, e-mail: editor@americanbazaaronline.com

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