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The Stench of Coalgate

What has been damaging for UPA-II is that many beneficiaries of Coalgate have been linked to influential Congress MPs and MLAs

Coal is black. It is dirty, and not just in a literal sense. Yet, without coal, the country’s economy would come to a grinding halt. Over more than a century since this mineral has been mined in different parts of India, there have been hundreds of scandals relating to coal. So what’s new about what the media calls Coalgate – not to be confused with a particular popular brand of toothpaste.

Anurag Kashyap’s recent two-part film, Gangs Of Wasseypur, a gratuitous cinematic offering of gore and violence around Dhanbad in Jharkhand, may be a highly exaggerated depiction of reality. Yes, at least one former mafia don of the area (who was a member of the legislative assembly of Bihar) was known to be rather close to a former Prime Minister of India. But the metaphorical fires sparked off by more modern gangsters of the country’s burning coalfields threaten to singe the current Prime Minister Manmohan Singh.

There is considerable evidence to indicate that although Manmohan Singh wanted public auctioning of captive coal blocks soon after he became the Prime Minister in 2004 – eleven years after 1993 when the PV Narasimha Rao government in which Dr Singh was the Finance Minister changed the rules of the game – the policy was not operationalised till eight years later.

The reason why captive coal blocks continued to be allocated by a screening committee of bureaucrats operating in an opaque and often arbitrary manner was not only on account of the opposition to auctions from BJP-ruled governments in various states, but the Biju Janata Dal government in Orissa and the Left Front government in West Bengal as well. Although coal is a Union subject, the representatives of states wanted to have a say in the allocation of coal blocks not just to favour their cronies but ostensibly to ensure that the promoters of companies which got rights to mine coal set up projects in the same state.

More importantly, opposition to auction of coal blocks came from within the UPA government and thereafter, attempts were made to delay the implementation of the new policy. Questions need to be asked of two former Ministers of State for Coal, Dasari Narayan Rao and Santosh Bagrodia, as to who were responsible for dragging their feet before implementing a policy of actions that the PM himself wanted. Not only was there no regulatory mechanism worth the name, promoters of companies deliberately squatted on coal blocks after obtaining mining rights for a pittance in anticipation of windfall gains – not only because coal prices would rise but also by selling their stakes for huge profits to other firms.

What has been particularly damaging for the UPA-II government is that many beneficiaries of Coalgate have been linked to influential Congress MPs and MLAs (such as Nagpur MP Vijay Darda and his brother, Maharashtra’s Education Minister Rejendra Darda) and at least two Union Ministers, Subodh Kant Sahay and Sri Prakash Jaiswal, the current Minister of State for Coal (at the time of going into print). For the Congress, it’s perhaps small consolation that BJP MP Ajay Sancheti, who is close to BJP chief Nitin Gadkari, may also get hurt.

This is indeed crony capitalism at its most brazen and venal. Will the government weather the crisis in the near-term? Probably yes, even if more scams are unearthed. The more substantive point to note is that the legacy of criminal mismanagement of the nation’s natural resources will be borne by the future generations. Be it electromagnetic spectrum or coal, these are finite resources that belong to all the people of India. The government is supposed to act as a custodian of these resources. But when those in positions of power and authority fail to apportion these resources in a prudent, fair and transparent manner, the entire country pays a stiff price for the corruption of a few – in the form of higher prices and lower production of power, steel and cement.

The story of Coalgate is more gory and violent than any fictionalised version the screen can ever hope to depict. Move aside Anurag Kashyap. Make way for our Prime Minister who saw, heard and spoke no evil.