CORRUPT INDIA: Coal Scam -The Perfect Loot For Politicians, Bureaucrats And Power Brokers

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Though the government claimed that the allocation process was based on strict evaluation parameters, the evidence from the CAG report fed the growing suspicion that the process was corrupt. One company, which had no record of having operated in mining space, was allotted a mine block. More evidently the recent sex scandal, stimulated by a mistress from a brothel, who felt cheated as N D Tiwari did not deliver on his promise of mining license, destroyed Tiwari’s political career; moreover kindling the corruption occurred while the coal blocks were allotted. Through such instances it is getting clear that India’s national resources are being divided improperly among politicians, bureaucrats, business groups and power brokers.

NEW DELHI – After the whole debates on the ‘coalgate’ scam, an inter-ministerial group (IMG) is meeting on September 3 to consider the case for the cancellation of coal mine block allocations made to private parties over years. The case emerged when the report by the Comptroller and Auditor General (CAG) got released recently, which indicated that the government allotted coal blocks to private companies without prior auction and caused a loss of 1.86 lakh crore to the national exchequer.

The cancellation of the allocations would answer the demands from the Opposition, especially from the BJP. It would also turn to prove that at least some of the allocations made by the government were illegal and that the ‘zero loss’ theories from the government is apparently untrue. Though it is claimed that the allocation process was based on strict evaluation parameters, the evidence from the CAG report fed the growing suspicion that the process was corrupt.

For instance, one company, which had no record of having operated in mining space, was allotted a mine block. More evidently the recent sex scandal, stimulated by a mistress from a brothel, who felt cheated as N D Tiwari did not deliver on his promise of mining license, destroyed Tiwari’s political career; moreover kindling the corruption occurred while the coal blocks were allotted. Through such instances it is getting clear that India’s national resources are being divided improperly among politicians, bureaucrats, business groups and power brokers.

More devastatingly, many of the allottees have not made any progress in mining the coal in their allotted coal blocks. The note prepared for the inter-ministerial group meeting shows that among the 90 coal blocks allotted to private parties since 1993, 60 blocks, which account for an estimated 6.7 billion tonnes of coal reserves (valued at 2 lakh crore) can be cancelled because they have not made any progress.

It is also observed that even if the cancellation is done, it cannot stop the unjust profiteering by some of the original allottees; because, these allottees can profit by selling a stake in their company, thereby defeating the purpose of the lock-in provision. The report revealed that more than 10 companies that had been allotted coal bocks for free had sold a stake—either in part or in whole—in their companies without undertaking any coal extraction work; i.e., they got the mine for free apparently for captive production but they sold their companies thereby getting huge profits.

T N Ninan, the Editor of Business Standard, observes that the gossips, about having a fixed rate for getting coal mines allotted, have long existed in the Delhi circle. What is left to know, he adds that, is whether every allottee paid up, or whether there were any exceptions, and how much of the money went to political parties and how much to individuals.

The whole scandal, thus, explains how everyone, from politicians to bureaucrats, from business barons to power brokers, is exploiting country’s resources. All these were nothing more than the efforts to make an impression of policymaking in a high pace; while profit making is done through the back door.