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Coalgate figures may not be accurate, hints Chief Justice of India SH Kapadia -Dhananjay Mahapatra
-The Times of India

Chief Justice of India (CJI) S H Kapadia on Saturday joined the debate on the CAG's estimate of "windfall gains" for private players in the coal block allocation scam, suggesting such assessments may not be accurate.

"People should be educated on economics as well to understand that these irregularities should be understood from the point of loss, which was a matter of fact, and not from profit angle, which was a matter of opinion", said the CJI, a remark which was lapped up by a government reeling under the charge that its failure to prevent coalgate helped private players fatten themselves by Rs 1.86 lakh crore.

"Valuation adopts very different criteria. If we understand these concepts properly, then we will know where the shoe pinches," the CJI added.

The government led by Prime Minister Manmohan Singh has questioned the comptroller and auditor general's estimate. The auditor has said that the government's failure to implement its own decision to auction coal blocks helped business houses walk away with the precious resources.

As soon as the CJI finished speaking, the remark was circulated by the government's PR mandarins.

The remark came a day after CAG Vinod Rai robustly defended his calculation before Parliament's Public Accounts Committee. Rai said that he would have failed in his duty he had not put a figure to the financial gains that, in auditor's estimate, accrued to private players.

Justice Kapadia also welcomed Prime Minister Manmohan Singh's decisions for economic reforms but said the efforts to pull the economy out of woods would be meaningless if the well-connected continued to grab an unfair share of economic benefits. In what he called his "swan song" before he retires, the CJI said, "Our leaders must know that without rule of law, well connected people can grab an unfair share of the economic benefits which will affect inclusive growth."

Delivering his address before the PM, the CJI said rule of law never impeded economic growth and it must go hand in hand with the decisions taken by the government to attract foreign direct investment to lift the damp sentiment in the market and the manufacturing sector. He said one of the single most important factors for economic growth was the respect of the government for the rule of law, which enforced minimum standards of fairness and helped in improving the governance of the country.

He said an 8% GDP growth rate generated 12 million new jobs per year, but when the growth rate falls to 5.5% the employment generation dips to 8.25 million. "India has a 30 million youth population needing 10 million new jobs every year. If the growth rate falls than unemployment will increase. That's where the investment comes to bridge the gap," he said. "But be it domestic or foreign direct investment, I have always given importance to investment if it generates employment."

But he also cautioned the PM about the flip side of the reforms. "It should not be that 300 million prosper and 700 million suffer. That is why the need of the hour is the inclusive growth and economic democracy," the CJI said.

Justice Kapadia said he was in awe of the vision of Constitution framers as they had prescribed that natural resources be allocated to serve greater common good. This, in the present context, could mean economic democracy, which in the past meant inclusive growth. "In my view without this economic democracy political democracy would be imperiled," he warned.

He said the FDI was welcome but Indian labour laws should not get Americanized, which happened in Australia leading to a huge problem. "In India Americanization of labour laws would not happen as our laws are drive by the Constitution which has equity as the core principle," he added.