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LATEST NEWS UPDATES | 'Crony capitalism' to be out of plan docu? -Dipak Kumar Dash

'Crony capitalism' to be out of plan docu? -Dipak Kumar Dash

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published Published on Sep 24, 2012   modified Modified on Sep 24, 2012
-The Times of India

The Planning Commission may drop reference to crony capitalism in the plan document after protests from some ministers who are of the view that any mention would be a tacit acknowledgment of the existence of the practice.

Besides, it has suggested "transparent auction" of natural resources as the solution, something that the government is not willing to accept as the one-size-fits-all approach for all sectors.

Apart from crony capitalism, there are also comments on "unacceptably high" levels of graft that may not go down well with the political class. The plan panel has said that the long-drawn enquiry process should be fast-tracked as public servants often escape. It suggested that simpler rules, e-tendering and increased use of e-governance tools will leave little room for corrupt practices.

Although plan papers typically focus on economic growth and setting targets for various sectors, the 12th plan document has devoted considerable focus on concerns that have plagued the economy and investors in recent months.

But more than corruption, it is crony capitalism that has grabbed ministers' attention. "The most important area where a rethinking of policy is necessary, and is actually underway, relates to the allocation of scarce resources to private companies for commercial exploitation... Any such allocation for profit making commercial activity involves some implicit 'rent' if the price at which the transfer takes place is not market-determined, and this feeds the suspicion that 'crony capitalism' is at work," the plan panel said while listing land, mining rights and telecom spectrum as possible areas of concern. It went on to say that discretionary allocation continued for coal blocks and 2G spectrum - two natural resources that the CAG has flagged in its reports - after economic reforms put an end to industrial and import licences.

The document, which was discussed by the full Planning Commission meeting last weekend, recommended transparent auctions for allocation of resources to the private sector to deal with the "weak point". But that is not where the discomfort ends. It also talked about the delays and pointed to non-implementation of a 2004 decision to allocate captive coal blocks through auctions due to several reasons, including legislative changes.

"Since the document says that transparent auction is now being followed and this will be the criteria for future allocations, there is no significance of keeping this in the document," said a minister.

The Times of India, 24 September, 2012, http://timesofindia.indiatimes.com/india/Crony-capitalism-to-be-out-of-plan-docu/articleshow/16520915.cms


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