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Policy changes that would have worked...
It is sad that media failed to highlight the core issue in the whistleblowing book on Coalgate Crusader or Conspirator?

Former Coal Secretary P C Parakh who wrote the book says that it was intended to help future civil servants serve the country better by not bending to the personal interests of their political bosses. Sadly, given the total lack of moral values in India and the increasing criminalisation of politics and of parliament, such lessons on honesty and integrity will have little impact.

Most know that politicians use public sector companies for their personal benefits while claiming to promote national interests. However, it is not often that we find a whistle blower like Parakh giving the details of such shocking behaviour of our elected representatives along with documentary proof.

Parakh offers extensive examples of how public sector companies in the  coal sector are inefficient  and can never be efficient in the future because of political interference. The same should apply for public sector companies in most other sectors.

 

Mamta’s munificence…

He writes about how Mamata Banerjee, soon after becoming Coal Minister, was keen to get employment for 50 odd TMC. workers. Her secretary brought to her notice the need to appoint a new CMD whose position had been vacant for over a year. She showed scant interest in such important subjects. Coal India already had a huge surplus of employees and there was a ban to recruit new hands. Still TMC workers were hired!

She pushed Coal India to spend on land to build a super specialty hospital in Kolkata where Coal India has very few employees. She also forced Coal India to make large donations to several NGOs of her choice. She did not hesitate to terminate the eminent directors serving on the board of NLC to appoint some nondescript TMC loyalists as directors. Of course once she lost her coal ministry many of these decisions were reversed. But they caused irreparable losses to Coal India.

As coal secretary, Parakh had been suggesting three important policy changes to improve the productivity of the coal sector. One, opening the coal sector for commercial mining; two, allocation of coal blocks through competitive bidding; and three, marketing coal through e-auction to non-core consumers. He had mixed success because of the vehement opposition either by his own ministers or by the parliament. Though the PM was in general agreement with all the three suggestions, he could not convince his cabinet or his party to push for reforms. This was partly the reason for Coalgate.

There is huge black-marketing in coal dominated by the Dhanbad mafia. When Parakh succeeded against the wishes of his political bosses in implementing the e-auction policy to sell coal (during the short time when the PM was in charge of coal ministry), some affected MPs started to press false charges against him. At one stage he even tendered his resignation.

 

Avoidable imports…

Had the three recommendations been implemented, India’s coal sector would have been in much better shape. But our political leaders would have lost opportunities to collect rent from the honey pot of coal sector.

Coal meets about 53 per cent of India’s primary energy requirements. Despite India having the fourth largest coal reserves, her coal imports are increasing. This is because of the inability of Coal India to keep pace with India’s increasing energy demand. But our politicians, do not like to privatise the coal sector.

One need not be a genius to figure out when there is huge demand for coal, it is only competitive bidding, that will result in honest allocation of coal blocks without corruption, as has been shown by the 2G scam. CAG has shown that as a result of failure to reform the coal sector, there has been a financial loss of Rs.1.86 lakh crore. The former coal secretary has given enough ammunition to support this estimate. India should reward Parakh with a hero’s status.

And the new government should first and foremost privatise coal.

 

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