Dragging over coals

A year after the controversy over coal block allocations disrupted Parliament,with the flaws having been identified and the process of corrections begun,the Supreme Court has again looked askance at the allotment policy. In response to a public interest litigation,the court had ordered a CBI report on the allotments. The CBI found that there was no system in place to verify the vital facts and claims of a company,and that no uniform policy or pattern was followed. The court has now said that all allotments would be cancelled if the Centre fails to provide a convincing rationale for its actions.

All coal block allotments,post 1993,followed the same process,which the court has found to be problematic. In 2004,the UPA voiced the desire to move to competitive bidding,but it was held up because of opposition from coal-rich states like Jharkhand,Chhattisgarh and West Bengal. While it is possible to quibble over the logic employed by each screening committee that made allotment decisions,they included representatives from state governments. The phase came to an end in 2008,when the government took up the long-pending Coal Mines Nationalisation Amendment bill,first moved by the BJP,to expand production,and stopped further allotment of mines. While the allocations are open to question,cause and effect in this sector are not as simple as the CAG report made it out to be. The notional losses from the policy and the resulting furore in Parliament did not answer the question of why coal production in India has not increased,even by a single tonne,for the past three years and why none of the mines allotted since 1999 has been mined. The government has moved to a competitive bidding policy due to be announced in April this year. An inter-ministerial probe on post-1993 allotments has also identified and cancelled allocations to 47 non-performing blocks. The ones that remain are held up for reasons like land issues and forest clearances.

While seeking accountability in individual cases is welcome,the structural defects in coal policies are the more germane matter. Unlike in the telecom policy,no goalposts were shifted in coal allotment. A move to scrap all allocations now would only signal another paralysing phase of uncertainty. For instance,the government has just announced a public-private partnership for the coal sector in the budget. Would that,too,be kept in abeyance? The mining sector is shrinking in India,with the latest figures at minus 2.9 per cent. Given that coal mining undergirds so much infrastructure and growth,this unpredictability could be damaging.