Dr. Prasanna Mishra |
| Blog | Posted By: hindtodaynews on:8/17/2012 9:03:01 AM |
Finally,
the Report of our Comptoller & Auditor General on allocation of Coal Blocks
since 2004 has been placed in the Parliament today. Loss has been computed at a
respectable figure—big enough to raise eye- brows even of the just born
child—Rs 186000 crore !! Let me make some quick comments without waiting for a
copy of the Report. Incidentally, I was a Coal Secretary to Government of
India; just before the period under scrutiny by our C&AG.
Law
provided for allocation of Coal Resources to producers of a few end products
including Power, Steel & Cement. The Blocks which are to be made available
to these producers are placed in the public domain. Interested Parties make
applications for grant of Blocks. The proposals are scrutinised in the
concerned Ministries and they make available their views to the Coal Ministry.
Concerned State Governments also make
available their views on the applications to the Coal Ministry. After this is
done, the proposals are placed before an Inter-Ministerial Committee presided
over by the Coal Secretary. The applicants are given the opportunity to justify
their cases. Taking these inputs to consideration, the Committee makes its
recommendations and final decision is taken by the Minister. This arrangement
had stood the test of time.
Energy security is a serious issue for our economy. A country like ours cannot
be dependent on a monopolistic arrangement where an important & critical
raw material like Coal could have a lone producer; ie Coal India. There are
serious operational issues which can create serious mismatch between demand and
supply. Induction of new producers of Coal is very much in national interest. I
see no rationale why the prevailing policy would be found fault with.
Confusion seems to have started by in house bureaucratic hair-splitting which
led some people to make theoretical forays into the realm of an utopia. They
could have searched for what could be the most ideal arrangement for allocation
of Coal Blocks for captive use. After much deliberations a decision could have
been taken to go in for auction. But this decision is easier taken than
implemented. One has to make adequate arrangements to make such a decision
operational. It takes time to do so. In the meantime, a Government cannot sit
idle and put a stop to allocation of Coal Blocks. Government is duty bound to
ensure a satisfactory economic growth. I therefore feel the Government have
done the right thing by not keeping on hold the process of allotment of the
Coal Blocks.
Regarding the loss, so far, I have no access to the Report of the C&AG. Let
me only touch upon a basic issue. A
producer of Coal who is also a power producer will most likely observe greater
economy and cut down the cost of production. Therefore he would get Coal cheap
to produce Power. That is what is needed too. It will be wrong to say that he
should have bought the Coal at, say Rs 100 per ton from Coal India ; but since now
he is using Coal costing him only Rs 60 per ton which he should not have he is
causing loss to the Government. Will it be right to say that Government lost Rs
40 per ton? And if he uses ten million tons per year then the loss mounts to
400 million rupees-- a big enough sum, worthy of being respectfully called a
scam.
Let me now touch upon
the validity of the assumption that auction is always preferable mode to assign
a natural asset like Coal. Suppose we conduct an auction. Who wins it? The
richest among the eligible bidders. Is it an acceptable proposition, from the
point of view of equity? What did Government lose by alloting the Blocks
through the existing arrangement? The bid amount seems to have been lost. But
is the loss more than ehat our economy
could have suffered if we had stopped allocation of Blocks through a
transparent procedure?
The existing arrangement also provided for review. If an allottee faulted and
did not utilise the Coal Block in time, Government does have the authority to
withdraw the allocation.
I would always take a view that a functional & performing Bureaucrat at a
key position works with a sense of great objectivity. When the existing
arrangement did provide for transparency, I would be inclined to say that
Government was not at fault. Its decision to allocate Coal Blocks as per the
existing system was wholly justified in the context of the national requirement
of higher output of Coal. Cases of individual malfeasance and malafide, if any,
can and should, always be looked into.
Time for looking at
our ailing economy with greater seriousness and professionalism. Crying loud
about the ghost called scam is an indicator of our growing love for
sensationalism. Let us avoid it for the sake of our Motherland.
( Author was a Coal
Secretary to Government of India)