The Coal Block Allocation events, their implications and the road ahead

The recent exposure of the supposed coal gate scam by the CAG has left many people speechless and has further questioned the ever decreasing trust of the citizens on the political system since independence. There are a lot of questions in the minds of the our fellow brothers and sisters, some of which are as under
– The CAG estimates the loss to be around 1.86 lac crore which is disagreed by those in the government: Did we really suffer a loss in monetary terms of this magnitude?
– Was an attempt made by the bureaucracy of the country to move towards a process of competitive bidding or not?
– Should only one party be held responsible or was the opposition also involved?
– What are the opinions and counter opinions to this whole saga?
– What can we infer?
As we ponder about these questions, it will be great to know what the CAG report has to say!
The CAG report (released on Aug 17, 2012) on Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production had the following points to share with the country
– The rate of increase in production of coal by Coal India Limited remained below the target envisioned in the 11th five year plan by the Planning Commission; the main reasons for this were inadequate drilling capacities, backlog in overburden material, mismatch between excavation and transportation capacities
– The de-reservation of 48 blocks of coal and allocating them to captive consumers was done by the Ministry of Coal to increase production but the move did not yield the desired results (till now) as production has not yet started in these blocks
– It was observed in some cases that the captive blocks allocated led to reduction in total mineable reserves for some projects and reduction in project life for some projects of CIL which is divergent from the guidelines for captive coal block allocation which stated that,
“the blocks offered to private sector should be at reasonable distance from existing mines and projects of CIL in order to avoid operational problems”.
– The Screening Committee recommended the allocation of a coal block by way of minutes of the meeting of Screening Committee. The minutes did not give any evidence of a comparative method that would have been used to allot the coal blocks and did not indicate the methodology used to evaluate each of the applicants. Thus the method followed was not transparent.
– Although the concept of competitive bidding for coal blocks was first introduced on June 28, 2004, the exact procedure to be followed for competitive bidding is yet to be finalized.
(the next part of this blog covers what exactly happened in these seven and half years)
– The Honorable Supreme Court in the judgment on 2G spectrum had directed to introduce transparency / competition in allocation of scarce resources. So, the attempts of the Ministry of Coal to introduce transparency/competition in the allocation of coal blocks was in line with that
– The CAG report believes that as a result of the delay in introducing competitive bidding process there has been a loss of INR 1.86 lac crore to the GoI
– Captive coal mining is a mechanism envisaged to encourage private sector participation in coal mining however the production of coal from captive mining has not been encouraging instead of the intended 73.00 mn tonnes from such blocks during 2010-11 only 34.64 mn tonnes of coal could be produced
– To ensure timely production from coal blocks the Ministry of Coal introduced the concept of bank guarantee in March 2005. Upto June 2011, 24 blocks were de-allocated for lack of initiative by the allottees in developing them
It was recommended (in Jan and Feb 2011) that for 15 allottees deduction in Bank Guarantee should be there for lack of initiative in developing the coal blocks, however the MoC could not encash these BGs as the modalities of the encashment were still to be worked out. The amount of lapsed BG worked out to be INR 318.81 crore against the 15 blocks which needed to be renewed.

The CAG recommended that
– There should be an empowered group along the lines of Foreign Investment Promotion Board as a single window mechanism with representatives of Central and State Government ministries to grant the necessary clearances such as mining lease, mining plan, forest clearance, environment management plan and land acquisition for accelerating the procedures for commencement of production.
– The Ministry of Coal should evolve a system of giving incentives to encourage production performance from captive coal blocks & disincentives to discourage non performance and should work out the modalities of competitive bidding soon
– The targets for Coal India Limited should be fixed in line with the targets fixed by the Planning Commission

Now let us have a look at why did it take us so long to move from an opaque process for coal block allocation to competitive bidding.
– The concept of competitive bidding first came into picture on June 28, 2004 and around a fortnight later the then Coal Secretary put up a note in front of the Minister of State in this regard
– Then Coal Minister asked for the preparation of a draft cabinet note for the Cabinet (for consideration and decision)
– The PMO on Sep 11, sent a note detailing the disadvantages of competitive bidding which was rejected by the Coal Secretary
– The Coal Secretary’s view was rejected by the Minister of State on October 4 (saying that competitive bidding will delay the allocation process further and that the steering committee can ensure a transparent allocation process)
– It was decided within a few days that all applicants by June 28, 2004 should be allocated based on the current policy
– In early March 2005 the coal secretary again reminded through the draft cabinet note that if the revised procedure for allocation was not put in place, pressures would again mount on the government for discontinuing the present procedure
– On July 25, the PMO called a meeting where it was decided that the Ministry of Coal would amend the Cabinet note yet again incorporating the concerns of State governments
(State Governments irrespective of political parties had concerns with the competitive bidding process and were not very supportive to get it implemented soon)
– Since the amendments would have taken time it was decided to continue with the existing procedure of allocating blocks for captive mining through the screening procedure
– In January 2006, the Coal Ministry asked permission for continuing with the existing mechanism since it would have taken time to make amendments to the Coal Mines Act
– In March a meeting was held in the PMO wherein it was decided that instead of just coal, all minerals covered in the MMDR (Mines and Minerals, Development and Regulation) Act 1957 should have competitive bidding process applied on them and requisite amendments should be made in the MMDR Act for the same
– Coal Secretary approved the draft note to the Ministry of Mines with a request to obtain the Department of Legal Affairs’ comments on March 20, 2006
– The Coal Minister agreed to MoS’s opinion that the decision taken to make ammendments to the MMDR act needs to be revisited as it involved withdrawing current powers of State governments and could become controversial, citing federal polity. All this happened within a span of 7 days.
– In mid-September, the Coal Ministry conveyed to the PMO and the Cabinet Secretariat that the Law Ministry has advised to initiate suitable measures for amending the MMDR Act — for facilitating competitive bidding. This led to a complete halt in any progress that was being made till October 2008
– The MMDR (Amendment) Bill was introduced in Parliament by the Mines Ministry in October and was referred to the Standing Committee on Coal and Steel on October 31, 2008. The Standing Committee submitted its report with certain recommendations after three and half months after which there was not movement for six months.
– On Feb 18, 2010 during the budget session the Mines Minister moved a motion for passage of the MMDR (Amendment) Bill
– Till September 9 there was no movement when the MMDR Act was notified in the gazette after having being passed in both Houses of Parliament during the monsoon session
– On September 22, 2010, the Coal Secretary chaired a meeting of the representatives of the Ministries of Power, Mines, Petroleum and Natural Gas, Steel, the Department of Industrial Policy and Promotions and Planning Commission to finalize the modalities for competitive bidding.
– Draft bid documents were discussed at the meeting of the committee on January 31, 2011 and six months later, on July 25, a meeting was convened by the Coal Minister with various stakeholders to discuss the issue of competitive bidding. Six months later, the amendment of the MMDR Act, rules for auctions by competitive bidding of coals mines was notified.

Here is an image which illustrates the current status of the coal blocks

What do the ruling coalition and opposition parties have to say about the whole saga?

– The Ministry of Coal has denied that there has been a loss of the amount mentioned by the CAG report to the national exchequer.
It has mentioned in its replies that the process of coal allocation that was being followed was in place since 1993 and the delays in implementing the allocation of coal blocks using the process of competitive bidding was due to several reasons some of which are
* Strong opposition from the coal rich state governments in arriving at a consensus for following the process of competitive bidding
* The Ministry of Power’s viewpoint that this could lead to enhanced cost of producing electricity which might affect the end customer
* The Department of Legal affairs arrived at the conclusion that the process can be achieved by administrative instructions and amendment to the Mines and Minerals (Development & Regulation) Act.
If administrative instructions would have been followed instead of going through the legislative procedure it would have been undemocratic and contrary to the spirit of the functioning of the federal polity.
It has also stated that the allottees were selected on these parameters
* Techno economic feasibility of the end use of project
* Status of preparedness in setting up the end use project
* Past track record in execution of project
* Financial and technical capabilities of the applicants
* Recommendations of the State Governments and the Administrative ministry involved

– The opposition has been extremely forceful in its opinion that the ruling party has received huge kickbacks in this whole exercise and has said that GoI questioning CAG’s methodologies and the points in the CAG report is unconstitutional behavior on the part of the Government and is an attack on both a constitutional authority and the constitution. It has halted the parliament to proceed and has demanded the resignation of the Prime Minister before any discussions can happen in the Parliament.
Some of the state governments which are ruled by opposition parties though have agreed that they recommended firms but said the final decision on the process to be followed was in the hands of the government.

There are both opinions and counter opinions to this whole saga.
Some are of the opinion that since CIL was not able to ensure complete utilization of the coal it made sense for the Government to allow private use of coal and since the process of allocation through competitive bidding was taking time
It made sense for the Government to follow the procedure that was being followed and allot the coal to private applicants.
There is also an opinion that unlike the 2G scam, the coal has not been resold to third parties. And since coal is primarily used to produce power whose price is regulated by the state, therefore the chance of making windfall profits is constrained.
And if coal prices are to be decided by market should not power prices also be de regulated (with immediate effect) which is the backbone of economic development and upliftment.
Counter Opinion:
As is already stated above due to a lack of transparent process in the allocation and the severe delay in implementing the same, many are of the opinion that there has been a huge loss to the citizens and malicious acts on the part of people in power cannot be ruled out.

What can we infer?
We can infer that there has been a lack of transparent process in the allocation of coal blocks and lack of speedy formulation and implementation of a transparent methodology for allocation of coal blocks, but to say that the country has suffered a loss of 1.86 lac crore is yet to be substantiated. 1. 86 lac crore can be the difference in the price at which the blocks have been allocated and the market price of the coal blocks but then it needs to be thought out, should coal blocks be allocated purely at market prices by bringing in a sudden change in the allocation policy?
Or should there be a gradual deviation from the current procedure to a more transparent policy in the future.
1.86 lac crore may not be the loss but there is no denying the fact that the way the current allocation has been done has kept the citizens in the dark and we need to move away from it sooner rather than later.
A more transparent process might have led to greater realization of the actual value of the coal blocks for the Government of India .
Let us hope that we soon have a more robust coal block allocation policy in place which keeps the trust of the citizens of India and at the same time ensures societal upliftment as well. “We also hope that only those allottees who have not lived upto their promises on coal production and do not meet the norms laid out, their allocations should be cancelled so that the loss is minimized (the allocation should not be cancelled for all because it will decrease the industry’s confidence while investing which is very essential for a sound economic growth of the country). We also hope that those blocks on which production has been delayed due to bureaucratic procedures begin production soon and other blocks too begin optimum production soon so that the main objective of allocating these blocks is achieved.”

We would like to hear what you have to say about the whole sequence of events!! Please leave your comments here or mail us at [email protected]

Change Beckons: Are we up for it!?

In the age where television and social media dominate human activity, thought and rationale; any effort to mobilise the crowd is best rewarded by capitalising on the popularity of these domains. When complemented with the magic of glamorous bollywood-stars who are worshipped no less than deities in the land of Amitabh and Khan’s; it leads to a perfect formula for awakening the crowd. Campaigns like the Pulse Polio by Amitabh Bachchan have established beyond doubt the kind of impact that such simple initiatives can have on the hero-worshippers. They work where simple advertisements just won’t do. The supremacy of such efforts was reinstated with the recent release of Satyameva Jayate! With the stunning personality of Aamir Khan, the enslaving television set and a country with abysmal social nuances to get rid of; Satyameva Jayate is proving to be a sublime formula to initiate change! From politicians to the general public, the show has touched hearts in every corner of the country.

Immediately after the first show that threw fresh light on the age-old issue of female foeticide, was aired; Rajasthan Chief Minister expressed concern over the issue and has assured that he will personally take up the issue of setting up a fast-track court in the infanticide cases in the state with the Chief Justice who in principle has given a go ahead. Soon after the second episode drew attention to the shameful practices of child labour and sex abuse, various child help-lines of different states were flooded with phone-calls.
Evidently, the show has struck a deep emotional chord with the viewers. Such is the impact of the demi-Gods of fame on the psyche of the masses, if only they have the courage to challenge the mundane.

Satyameva Jayate is serving as the much needed change in the realm of reality television. And it is quite relieving to see that it is living up to the hype that it had created. One can now expect informed citizens to replace the vanity of self-centred individuals; a concerned society to replace the general indifference.

Netapedia applauds Aamir Khan and his team for this thoughtful and noble initiative that is successfully mobilising the strength of world’s most populous country towards social revolution.

In the end, let us however take a brief discourse and reflect on the pitiful situation that we have landed ourselves into. We had to wait for 64 long years post-independence to realise the severity of the female foeticide issue, before Aamir worked his magic and brought it into lime-light. The constant indifference towards societal concerns and lack of information about political issues has cost more than eight million female foetuses only in the past decade. More than a million children fall victims to the malpractices of child labour and sexual abuse. And there are a whole lot of other equally severe, shameful and urgent issues that will have to wait before Satyameva Jayate chooses to bring them to foreground. All this only because we chose to be tolerant; we chose to be indifferent; we chose to be uninformed! It is time to rise against such atrocities and fight back. Satyameva Jayate is only one such battle. Let us equip ourselves with the weapon of political awareness and information and launch our own little tussle against every injustice curbing the freedom that every man is entitled to.

Having started a journey against the impotency fuelled by lack of political awareness, Netapedia appeals its readers to undo the harm done by political indifference and move collectively as a strong nation of 1.2 billion people towards a utopian society.

After a decade long struggle, has justice still failed to alleviate suffering for 2002 Gujarat victims!?

On the morning of 27th February, 2002; when a mob of more than 2000 Muslims attacked the Sabarmati Express at the Godhra Railway station, the fates of several Hindu pilgrims and their families were to change forever. Around 58 Hindus, most of whom were women and children, were burnt to death. Those who tried to escape were killed in a barbaric manner. The smoke rapidly spread the whiff of violence all across the State. This inhuman act of cold-blooded murder was to strike the most violent episode in the in the history of communal riots in India.

The Godhra train incident prompted retaliatory attacks by Hindus. Fuelling the fire of communal disharmony, Hindus attacked Muslims and burned Muslim-occupied houses. Such incidents initiated an unending circle of horrid massacres. Post-Godhra, severe riots broke off all across the state of Gujarat. The human brutality continued for over a period of 4 months. More than 1200 innocent lives were sacrificed in this shameful episode. Thousands of children were orphaned, women were widowed. People lost their families, their property and they lost faith in the sanctity of fellow human-beings. Government and the police forces failed to bring law and order for a long time; the state was plunged into a deep dark abyss of fear and insecurity. Several riot-hit survivors were lured into taking up terrorist activities under the tag of “jihad”. While others waiting for justice to be administered, have now lived the terror for 10 long years.

Ode village massacre was only one such post-Godhra riot. In Ode village, a crowd had attacked the homes of more than twenty Muslim families and set fire to them. 23 Muslims had lost their lives; families were ruined. Having lived through the horrific consequences for a decade, the affected families have been finally rewarded with justice as 23 of those accused have now been convicted as of 12th April, 2012 by the special court set up by the Supreme Court of India in 2009. A Special Investigation Team (SIT) was appointed to investigate into nine post-Godhra riot cases, including the above. 18 have been sentenced to rigorous imprisonment for life while 5 others to seven years in jail. The verdict in the Ode village massacre came in as second in the list of nine riot cases, only next to the Sardarpura ruling that went down in the history of the Indian judiciary for having convicted the largest number of people for mob violence. The court refused capital punishment, as was pleaded by the SIT, on the grounds that the case did not fall under the rarest of the rare category. It also maintained that the convicts did not have a past criminal record and that the situation was tense on the day of the carnage.

While most Muslim-survivors of the 2002 Gujarat riots tasted victory in the verdict that convicted 23 Hindus of murder, attempt to murder and strings of other serious and not-so-serious charges; there are still others who believe that justice has deluded them as the guilty have escaped capital punishment. Several Muslims hold that the rigorous procedures and punishments for the Godhra case against the accused Muslims were not identical for the Hindus convicted in the post-Godhra cases. Accordlingly, the Ode verdict seems to have re-inforced the muffled allegations of the Indian judiciary being influenced by communal differences into firm convictions, in the minds of these Muslims. Baffled Hindus, especially the families of the accused, on the other hand have challenged the righteousness of the investigative processes adopted by the SIT and also the verdict. With a rush of such mixed sentiments throughout the country, it is hardly possible not to flow alongwith the rumours.

Nevertheless, the verdict has set a strong example that will hamper people indulging into such unwarranted savage in the future. No community can survive with everyone everyone taking justice in his own hands. Accordingly, staunch followers of the eye for an eye belief will be punished irrespective of their caste or religion. The verdict has re-affirmed the lost conviction that everyone is entitled to justice and that in this secular nation, justice will always be done. Justice delayed does not imply justice denied. It is time we Indians step out of the mess of communal disharmony and strive together for the progress of the nation as a whole without indulging into such narrow-minded debates and inhuman acts of violence.

We, the Netapedia team, take this opportunity to appreciate the tenacity of the victims to have patiently followed lawful procedures seeking justice for over a decade and also the resilience of the people of the state to have achieved such high levels of growth and development, unitedly, over the last decade. Let us draw our inspiration from these law-abiding citizens of the country and restore our faith in the Indian judiciary.

P.S.: With all the controversies surrounding the Ode verdict, Netapedia invites blogs and comments with an intention to provide a vent to the opinions of experts and novices in the field.

Take on Assembly Elections 2012

In the recently concluded assembly elections, five states of the country witnessed the crazy dance of democracy as political parties used everything ranging from the charm of the Gandhi family hierarchy to satirical cartoon characters to establish their vote-bank and satiate their thirst for power. The elections bought a mix of happy and disappointing surprises for one and all.
However, before we get into a detailed analysis of the results, let us take a short de-tour into the basics of the state assembly elections, for the benefit of politically naive individuals.

State assembly elections determine the political party or coalition that will form government at the state level. The elections are held at the state level every 5 years and require loads of prior planning. Just to give a rough estimate, an approximate of Rs. 2000 crore was spent by the election commission and the central and state government agencies alone, on the Lok Sabha polls in 2009. State assembly elections are no less demanding.

For the purpose of assembly elections, each state is divided into several assembly constituencies. These are different and independent of the parliamentary constituency. The assembly constituencies elect the Members of Legislative Assembly (MLAs) at the state level. The number of assembly constituencies in a state is decided by the number of existing seats in the State Legislative Assembly. While this is so, the division is based on several factors such as geography of the areas, population, etc. Accordingly, electorates vote in their respective constituencies and winning candidates (MLAs) represent their constituency at the State Legislative Assembly (or the Vidhan Sabha). The Chief Minister is then elected by legislators of the political party or coalition commanding an assembly majority.

So far, so good. Now let us move on to a deeper analysis of the facts and figures for the assembly elections in the states of Manipur, Punjab, Uttarakhand, Uttar Pradesh and Goa.

The first reward for the Election Commission who umpired the gigantic exercise came in with the percentage of polling in most states registering above the existing maximum. While Punjab saw an increase of 3.57% in the number of voters casting their ballot from the previous highest of 75%, in Uttarakhand 67.22% of the state population had exercised their franchise, another highest for the state. While Uttar Pradesh, Punjab, Goa and Uttarakhand witnessed unprecedented polling percentages breaking all historical trends, Manipur failed to do so and saw around 80% voters as against 84.7% in the 2007 assembly elections. Yet, in view of the emergent violence, this percentage seemed good enough.

Owing to several complaints about proxy voting and consequent confirmation of such ill practices, the Election Commission was forced to consider re-polling. Accordingly, re-polling was ordered at 67 polling booths in 5 cities across the state and was peacefully concluded almost a month after the assembly elections. Congress proved the analysts wrong with a simple majority win in Manipur who predicted otherwise. With a clear win in 42 constituencies in the 60-member assembly, the ruling party now remains undefeated for the third consecutive time.

In what turned out to be a close contest between the ruling alliance and the Congress party, SAD-BJP alliance safeguarded its government against incumbency disadvantage in Punjab winning in 68 out of total 117 Assembly seats while Congress managed to win 46 seats. While several Congressmen dreamed of dislodging the BJP rule in the state with the well-established anti-incumbency habits and polling analysts largely predicted the same outcome, SAD-BJP alliance has now broken the jinx.

In a neck-to-neck battle in Uttarakhand, Congress won 32 seats of the total 70 seats, where as the BJP followed closely with 31 seats.

All efforts of The Congress to establish some hold on the nation’s most politically significant state have been undermined as the Samajwadi Party led by the Yadav father-and-son duo broke through seemingly impenetrable barriers and gained a simple majority to form government all on its own. Bahujan Samaj Party (BSP) has been voted out bagging a win in just 80 constituencies while SP sweeped over 224 seats emerging as a single largest party in the Uttar Pradesh. Akhilesh Singh Yadav is all set to be coronated the youngest chief minister of Uttar Pradesh. The shameful defeat of Congress in Uttar Pradesh, the long considered ‘crucible of Indian politics’ might have far-reaching effects on their hold at the Center. In face of the disastrous defeat after the highest polling percentage of 60% in the most populous state, several have opined that the national government could cripple.

In what may be a big setback for the ruling Congress party, the main opposition Bharatiya Janata Party (BJP) is all set to form its government in Goa having bagged 21 while Congress lags far behind with only 9 seats. Goa, this year, recorded the highest polling percentage of 82.8% as against the previous highest percentage of 70.51 in 2007. While Congress attributed this phenomenal increase in the polling percentage to its good governance and positive campaign; it has instead proved to a good omen for BJP and an indication of the dissatisfaction and complete rejection of the ruling Congress government by the public. Looks like the Congressional confidence has been miserably shattered.

In view of three resounding defeats for Congress, and re-assuring victories for the Opposition, several analysts have expressed concern that governance at the center is bound to get more difficult. Many believe that the mythical Gandhi family charisma will no longer work for Congress. While experts differ on the impact that the election results will have on the budget session and other aspects of the economy, Netapedia invites your analyses of the elections, winning strategies that emerged dominant, flaws and fallacies of political parties or future impact of the results either in terms of comments or blog entries.

Hi All

It is exactly 16 weeks since we launched our website and the journey both pre-launch and post-launch has been great with lots to learn and filled with challenges.
The response that we have had so far from users is overwhelming. We are humbled and really appreciate the efforts that the users have taken in giving us their feedback for making this a great site, of which we have incorporated very few till now and will incorporate the others gradually.

Today we are launching our blog to better interact with our users. On this blog we will be having regular entries on the country’s events/policies with an expert blog once every month on any topic of the expert’s choice.

We set out with a vision of “To be an informative, educative and interactive online platform on Indian politics, noteworthy national events and to increase awareness about important national issues by ensuring participation from our fellow citizens” and we still have a long way to go before we fully realize our vision.

Till now over 20,000 unique visitors have visited our site and we are thankful to our users for pubcizing our site. We will soon be launching a comparison feature on our website and add more features in the coming months.

At this point we would like to express our sincere thanks to Edul Patel, Aarav Singhal, Himesh Joshi, Ankur Tulsian, Srinidhi Govindarajan, Vivek Jha, Allen Richard Kerketta, Raju Naik, Suresh Varghese, Ilyas Saudagar, Aniket Bokade, Kamlesh Agrawal, Shrikant Shelke, Piyush Chauhan, Y. Akshay and Sharth Mandan who helped us before our launch to get the site launched on time. In December we were joined by two awesome people Harshavardhan and Umang Mathur who helped us in making the timeline and comparisons feature (which will be launched very soon).

We really look forward to your continued guidance and support.
We would love to hear from you (please drop us a email at [email protected]) and would like your help in spreading our site.
We are planning to make this a user developed interactive blog (please drop us a mail at [email protected] if you would be willing to contribute) and are confident that you will help us in making this a wonderful blog on Indian politics.

Team Netapedia