Coalgate: PMO defends coal block allotment to Birla's Hindalco

Discussion in 'Politics & Society' started by Ray, Oct 20, 2013.

  1. Ray

    Ray The Chairman Defence Professionals Moderator

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    Coalgate: PMO defends coal block allotment to Birla's Hindalco

    NEW DELHI: Breaking its silence, the Prime Minister's Office today rejected any criminality in the controversial allocation of coal block to Hindalco, saying Prime Minister Manmohan Singh had approved it on the basis of "merits" of the case placed before him.
    The PMO, while making it clear that Singh was the 'competent authority' who cleared the proposal mooted by the Coal Ministry in 2005, underlined that the allocation to a joint venture, including Hindalco, was not done at the cost of PSU Neyveli Lignite Corporation

    t released details of the sequence of events leading to Singh's approval on October 1,2005 and said "the Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and based on the merits of the case placed before him".

    While defending the decision, the PMO referred to Singh's statements earlier that the government has nothing to hide and it will fully cooperate with CBI which is probing the case.

    The allocation of Talabira coal block in Odisha is in the eye of a storm with CBI booking Aditya Birla Group Chairman Kumar Mangalam Birla and former Coal Secretary P C Parakh. Parakh has said if he was accused of conspiracy, then the Prime Minister also should be made an accused as he had approved the revised decision.

    The PMO acknowledged that the final decision on the allocation "differed" from the earlier recommendation of the Screening Committee. "This was done following a representation received in the Prime Minister's Office from one of the parties, which was referred to the Ministry of Coal," the PMO said in a statement.

    The PMO said CBI is free to investigate the case as it may have got hold of some documents post-allocation.
    "It is recognised that this allocation (of Talabira coal block) is subject to an ongoing investigation. No impediment is being placed on CBI to continue the investigation and seek fresh information which may have a bearing on the case," the PMO statement said.

    "The investigation on this and other matters must take their normal course under the law," it added in the statement issued in view of "extensive media coverage" on the matter.

    Giving the sequence of events, the PMO said Singh had received a letter dated May 7, 2005 from Kumar Mangalam Birla requesting allocation of Talabira-II and III coal blocks in Odisha to HindalcoBSE 3.15 % for its 650MW captive power plant in its integrated aluminium project in Sambalpur and for a 100MW captive plant for the expansion of its Hirakud aluminium plant in Odisha.

    The Prime Minister noted on the letter -- 'please get a report from Coal Ministry', it said.

    The PMO forwarded the letter to the Coal Ministry on May 25, 2005 requesting it to look into the matter and send a report.

    Birla submitted another letter to the Prime Minister on June 17, 2005 repeating the request. This letter was linked to the earlier reference and sent to the Coal Ministry with a request to send their report on the matter, it said.

    In August 2005, the Coal Ministry sent its file on the matter to the Prime Minister, mentioning that the Screening Committee had considered three major contenders for allocation of Talabira-II and decided to allocate this block to NLC.

    Coalgate: PMO defends coal block allotment to Birla's Hindalco - The Economic Times

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    The PM and the PMO claims that the allocation was given based on 'merits'.

    Therefore, it is surprising that the CBI which is said to be a 'caged parrot' should bite the hands that give Polly the crackers by claiming underhand dealing through the Coal Secretary, Parakash, to benefit Birla.

    And Prakash adding to the Hercule Poirot mystery by stating that if he is accused of conspiracy, then the Prime Minister also should be made an accused as he had approved the revised decision.

    Actuallyt, as was being said that if there was the petition from Hindlaco, it should have gone back to the Steering Committee to reconsider, but instead of that, it was sent to the PM to clear the allotment.

    There is no doubt it raises suspicion, but then could it be that the PM wanted to 'fast track' the allotment so as to buoy up the adding economy?
     
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  3. Ray

    Ray The Chairman Defence Professionals Moderator

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    In this connection, the undermentioned article is interesting to ponder over

    Rot stems from ill-conceived coal nationalization plan

    Subhash Chakravarti, a legendary chief of bureau of The Times of India, recently recounted an encounter between Prime Minister Jawaharlal Nehru and the West Bengal Congress supremo Atulya Ghosh in the early-1960s.

    "I have heard", Nehru told Ghosh accusingly, "that you are a bit too friendly with Calcutta's Marwari businessmen". Never inclined to kowtow to someone he regarded as a poseur, Ghosh's reply was characteristically blunt: "What you have heard is right. Our party needs money, not merely for Bengal but for UP and Bihar too. Who do you think funds us? Without that money you wouldn't be wearing that rose on your lapel."

    Nehru was taken aback by this insolence and complained to his old friend Dr B C Roy who was chief minister of West Bengal. Dr Roy laughed it off but delighted in repeating the story to others. These probably included S K Patil, the Bombay Congress boss with a reputation for being probusiness and pro-US. Patil used to rue that he was the target of unending radical derision except before elections and when it was time to lobby Washington for food aid.

    The tendency to look upon India's corporate sector as the proverbial 'kept' woman who could only be visited stealthily and in the dead of night (I thank the late Pramod Mahajan for this imagery) has been an undesirable Nehruvian legacy. If Nehru shared the upper-class English socialist disdain for 'trade' and new money, Indira Gandhi was positively vengeful towards Indian business following her battle with the Syndicate, and Rajiv Gandhi was plain confused over how much elbow room should be given to the private sector. However, there was one common dynastic consensus: business must pick up the tab for political expenses. A highly regulated capitalism, it was decreed, must underwrite India's experiments with socialism.

    It was an expedient arrangement that allowed patrician socialists to serve the poor without being preoccupied with where the money was coming from. One Nehru sibling who enjoyed global fame was, for example, particularly forgetful about settling shopping and hotel bills.

    When the private sector proved unable to deliver the full booty - and this began to happen as the license-permit raj began to be excessively suffocating for business - the necessary surplus was creamed off from state funds. A breed of politically loyal but parasitic contractor class was created by Indira Gandhi to offset the influence of old money. Additionally, exceptional discretionary favours were doled out to business houses which were considered 'reliable'. Business, as Dhirbuhai Ambani famously said, became a matter of "managing the environment."

    What we are today witnessing are big cracks in a system whose principal objective was income generation for the ruling dispensation rather than the economic growth of the country. The CBI clearly erred if its reason for wishing to prosecute a former coal secretary and industrialist Kumar Mangalam Birla was the fact that Hindalco ate into a coal allotment initially being made to a public sector unit. To treat the private sector as a poor cousin or, indeed, a predator, makes no sense. However, the real reason for widespread suspicion of influence-peddling and corruption is that the coal block allotments were governed by discretion, the Prime Minister's Office having earlier rejected the more transparent process of auctions. It was this flawed selection system which resulted in a large chunk of India's coal reserves being parcelled out to those who were either linked to the ruling party or were willing to pay a political cess for every ton of coal extracted.

    However, it is reassuring that the CBI's peremptoriness has generated a sense of outrage. In part the issue is all about a senior bureaucrat being punished for following a political order and an industrialist pulling strings to further his very legitimate business interests - there was no other option. But the real rot stemmed from an ill-conceived coal nationalization that has proved an unmitigated disaster and which has cost India dearly.

    It is curious that the Hindalco chairman was named after Mohan Kumaramangalam, the charismatic Communist-turned-Congressman who presided over coal nationalization and other socialist excesses. Today, to take liberties with Karl Marx, the fawning of an earlier generation must be weighing "like a nightmare on the brains of the living."

    Rot stems from ill-conceived coal nationalization plan by Right & Wrong : Swapan Dasgupta's blog-The Times Of India


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    The above article does give an insight in the workings that keeps the powers that be busy and happy.
     

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