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LATEST NEWS UPDATES | Go beyond CAG: Shout less about notional losses, do more on genuine coal sector reform

Go beyond CAG: Shout less about notional losses, do more on genuine coal sector reform

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published Published on Aug 21, 2012   modified Modified on Aug 21, 2012
-The Times of India

Expectedly, CAG's reports on coal, power and Delhi airport have raised a storm. Yes, one takeaway is the need for transparency in resource disbursal and use, be it minerals or land. But if CAG - whose job is to keep accounts - habitually hypothesises about presumptive revenue loss owing ostensibly to absence of this or that policy in the past, where will it end? Its coal audit claims private firms could make a killing of Rs 1.86 lakh crore from coal blocks allocated non-transparently. That, it says, means a dent in public coffers. As with telecom, here's another case of breast-beating over a 'loss' to the exchequer that's notional rather than real.

The government's retort is correct on point of fact: no policy existed during the period under review for competitive bidding. This isn't to say bidding for coal blocks hasn't been delayed. The route was proposed in 2004. Rules were notified only in 2012. Meantime, a committee system has allocated coal acreages preferentially, following inter-ministerial vetting of end-user needs. Its screening process has been opaque. But since it predated the UPA, politicising the matter won't help. It'll only deflect focus from the key issue of coal sector reform. Here, coal minister Sriprakash Jaiswal rightly says private participation in developing coal blocks was always essential given state-owned Coal India couldn't meet demand alone. Only, he doesn't take the argument far enough.

First, why demonise private firms for being allowed into sectors where the public sector's proved deficient? Nor does fetishising revenue maximisation always serve consumer interest, as we've seen in telecom. Second, no ruling dispensation has done what's really required: get government out of the business of running coal mines by dismantling nationalised coal mining. Faced with burgeoning demand for coal-fuelled power, authorities merely permitted captive mining, inviting accusations of graft. Meantime, a country with massive coal reserves has remained hobbled by poor output and quality, arbitrary pricing and chronic shortages. All these blights, hitting power utilities hard, have hurt the economy as a whole.

We can't afford an underperforming public sector monopolising critical sectors. The coal industry must be opened up to market forces, and an independent regulator set up. Captive mining should make way for specialised mining firms whose business it is to produce and sell coal. Private enterprise will raise productivity, facilitate competitive pricing and trim reliance on costly imports. Instead of trading punches, the government and opposition should start cooperating to deliver such reforms. Indian industry needs transparent level playing fields, not discretionary favours. To that end, let's shout less and deliver more.

The Times of India, 20 August, 2012, http://articles.timesofindia.indiatimes.com/2012-08-20/edit-page/33273741_1_coal-blocks-coal-mines-coal-acreages


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