The Comptroller and Auditor General’s three recent reports have put the government in the dock. In all the three cases — the allocation of coal blocks, Reliance Power and Indira Gandhi International Airport — the government has, according to the CAG, selectively conferred huge benefits on private sector companies, leading to the unfair exclusion of others.
Unfortunately, the BJP’s obstructionism and the ruling party’s unabashedly aggressive rhetoric has somewhat diverted attention from the real issues. The first is the manner in which the government should respond to reports of constitutional functionaries, whose primary mandate is to strengthen the system of checks and balances in democratic governance. The second relates to the substance of the government’s defence, as evidenced in the statements that the Prime Minister laid out in the two Houses of Parliament. On both the counts, the Prime Minister’s summary dismissal of CAG’s observation does not stand up to the requirements of propriety and reason.
The institution of CAG came into existence in 1860 just after the British Government assumed power from the East India Company. The Government of India Acts of 1919 and 1935 enhanced its role and in 1950 it was given an independent and elevated status in the Constitution. The CAG is a facet of the entire principle of accountability, which is the cornerstone of the Indian Constitution. It ensures adherence to established procedures and holds the government accountable to Parliament. It acts as eyes and ears of Parliament, which does not have a machinery of its own, and reports Parliament and not the government.
A government can disagree with the CAG’s report, but the role played by the CAG is valuable in itself. In fact, if there are findings in the CAG’s report, the process is not over; it goes to Parliament, to the Public Accounts Committee (PAC), where it is considered. Without letting the three latest reports go through this meticulous process, the Prime Minister has rubbished it. Surely, the observations of the accountability watch-dog deserve more respect and serious application for mind.
Since the Prime Minister has departed from the established procedure and his party is openly targeting the CAG, a zero-loss theory has been put forward to challenge CAG’s estimates of losses in coal block allocations. The fact is that the CAG has scaled down the estimate from Rs 4.79 lakh crore in the draft report to Rs 1.86 lakh crore. The final report excludes underground mines, adopts much lower estimates of ‘extractable reserves’, uses the average sale price and cost of production of all grades of coal in Coal India’s open cast mines and adds a reasonable financial cost component to arrive at its final estimate of the windfall gains. It is unfair to dub CAG’s estimates of loss as ‘flawed and without basis’ as the Prime Minister has done.
The real question is why the government did not take a timely decision on competitive bidding. All that was required was the framing of the required rules under the Coal Mines (Nationalisation) Act, 1973, read with the Mines and Minerals (Development and Regulation) Act, 1957, and the Mineral Concession Rules, 1960. This could have been done in 2006 itself but seems to have been deliberately delayed, which “rendered the existing process beneficial to a large number of private companies”.
The answer is simple. Be it coal or 2G spectrum, a part of this systematic loot of natural resources goes to the political parties and politicians who control the state and Central governments. The government’s loss of revenue is only one aspect of this state-sponsored crony capitalism. The loss suffered by the poor people in this no-zero-sum, who should be equal if not more important stakeholders in the distribution of the country’s natural resources, is incalculable.
upendrasarojsharma@yahoo.com