Rohit Mishra

Thoughts which don’t fit in 140 characters.

How the Government Is Fooling Us on the Question of Auctions

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India has had two major scams in the past few years - the 2G spectrum scam and the coal block allocation scam. The 2G spectrum scam was ball parked in to a  range from $ 5 - 31 billions. The CAG report tabled in the Parliament pegged losses from coal block allocation at $33 billion.

On February 2, 2012, the Supreme Court blew away the charade put up by the Government, when it declared the spectrum allocation as “unconstitutional and arbitrary”. The Supreme Court quashed all the allocated spectrum licenses and  asked the government to conduct fresh auctions.

In the meanwhile, the Comptroller and Auditor General of India (CAG) further blamed the Government for inefficient allocation of coal blocks. After the opposition complained about corruption, a CBI inquiry has been set up. The alleged coal allocation scam even involves the office of Prime Minister Manmohan Singh.

Many have argued why the government did not choose to auction scarce national resources like telecom spectrum and coal blocks in the first place. The Government sent a Presidential reference to the Supreme Court for clarification on its opinion on auctions. In an expected reply, the Supreme Court said

auctions are not the only permissible method for disposal of natural resources, across all sectors and in all circumstances.

The Government is claiming its stand has been vindicated that they were justified in not auctioning these resources in favor of common good. In a joint press conference few minutes back, the ministers for Finance, Telecom and Law stated how their stand was vindicated about not choosing auctions. They quoted various instances in the SC judgement which justified their opinion.

But, it is sad to see the Government put up another gimmick instead of accepting the blatant loot of resources that it allowed. The SC judgement on telecom spectrum made clear the corruption by A. Raja and several telecom executives. Many reports in the media have completely exposed the Government’s claim of common good.

To say that auctions should be one and only route to distribute national resources would be unwise and intrusion of the policy  making powers of the Government. At the same time, the Government cannot wash off its hands from its responsibility to explain to the country what common good they saw in giving away scare resources to fly-by-night operators who in turn have made a huge profit by selling these resources in the open market. In this press conference, none of the ministers quoted this important part of the judgement.

when such a policy decision is not backed by a social or welfare purpose, and precious and scarce natural resources are alienated for commercial pursuits of profit-maximising private entrepreneurs, adoption of means other than those that are competitive and maximise revenue may be arbitrary and face the wrath of Article 14 (right to equality) of the Constitution

A smug Kapil Sibal, the Minister for Communications & IT, didn’t justify his famous “zero loss” in 2G spectrum allocation comment made last year before the SC judgement came.

Ordinary Indians still have faith in the higher judiciary. But, we should also be careful not to allow politicians to score points by interpreting a SC judgement to justify their nefarious motives.

NDTV’s Sreenivasan Jain exposed the corruption in coal allocation both in the Congress and the BJP in his show “Truth vs Hype”. (Part 1 | Part 2) It clearly shows how the then Coal Secretary P C Parikh’s call for transparent auction of coal blocks felt on deaf ears in the PMO, which stalled the policy change to the benefit of the companies which were granted coal blocks.   Part 2 shows the story of Subodh Kant Sahai, Union Tourism Minister from Jharkhand who lobbied for coal mines to be allotted to his brother’s company. Also, a story from Chattisgarh showing how Coal-gate has been a bi-partisan scam with involvement from both the Congress and the BJP.

Considering the deep involvement of both the Congress and the BJP, it is highly unlikely that the Coal Scam will see a similar result as the 2G Scam unless the Supreme Court strictly directs the CBI. But, at the very least, we, the ordinary people of this country shouldn’t fall in to the bait of these politicians who first facilitate these scams, and then justify their actions.