Since the 2G “scam” broke out, we have been fed ever larger
corruption numbers. Apparently 2G was as big as Rs 1.76 lac crores; Coal even
higher at Rs 1.86 lac crores (if the CAG had had its way, it would have called
it a Rs 10 lac crore scam). Unfortunately for India, its institutions (CAG, SC,
CBI) have all failed to behave responsibly, preferring to toss up ludicrous corruption
numbers. Another important institution – the media – has also behaved irresponsibly,
blindly amplifying such bizarre projections. And finally, our Parliament hardly
ever functions, held to ransom by every major and minor party. Such
irresponsibility on part of all our democratic institutions has led to the
growth rate plummeting and the overall sentiment skydiving.
Look at 2G. Does anyone even know what the basic CAG charge
was? It was that the government chose to give away spectrum cheap (at 2008
prices), instead of conduct auctions. The emphasis unfortunately was on the
price. Not on the “process” – First Come First Served – followed which was
undoubtedly rigged as investigations have now shown. The government was well
within its rights to give spectrum cheap, in the interest of increasing
teledensity. If it chose to forego Rs 1.76 lac crores for the good of the
people, as it does even today with fuel subsidy, no one can fault it. The scam
was in the way Raja manipulated the FCFS system – changing timelines, giving
very little time to applicants to produce large-value Demand Drafts, etc.
Investigations have shown that corruption of the order of Rs 200 crores may
have taken place (the DB Realty – Kalaigner TV loan issue). Everything else was
a chosen government policy, from which only
the public gained. The Rs 1.76 lac crores (assuming it was true, though
subsequent auctions have shown it was all baloney) was distributed amongst the
people, not pocketed by telcos or even ministers and politicians.
Look at Coal. Again, the policy of “administered auctions”
using the “screening committee” to decide, has been in force since 1993. No
government touched this process. More mines were allocated since 2004 because
the UPA was pushing for growth. More power plants, cement units, steel plants
were coming up and the demand for coal was soaring. The government thought of
auctioning coal mines, but the process took many years, thanks to parliamentary
logjam and the general slow speed of governmental functioning. The interim
period – when the government “thought” but did not “act” – is the period of
corruption according to the CAG. Again, it confuses “loss to exchequer” for
corruption (or maybe the BJP spun this to its “mota maal” accusation). Yes, the
government lost revenues, but in return, it extracted cheap
end-consumer-pricing in power (directly through bidding), steel and cement (by
lowering input costs). This helped industry grow faster. Again, in Coalgate,
there has undoubtedly been corruption at the local mine level (nothing proven
yet), but mostly, it is administrative decisions (of the multi-party screening
committee) that are being shown as cases of corruption. But where has the Rs
1.86 lac crores gone???? The answer: to the people in the form of lower prices.
If it had gone into the pockets of the Congress, it would have won the next ten
general elections without an effort! In reality, the party is in serious
trouble because of these scams.
In both 2G and Coal, its not as if the private sector made “windfall”
gains as is being claimed. The number 2 mobile operator Vodafone turned in its
first profit after nearly 15 years of being in the country. Reliance Comm
continues to report unimpressive margins and even other players – including the
leader Bharti – are in a financial mess. Ditto in Coal. Jindal Steel, one of
the companies in the eye of the storm, had a 10.7% PAT margin in FY13 (nothing
unusual). India’s largest steel company, Tata Steel, largely unaffected by the
scam, reported an even higher 13.5% PAT margin. If the scam had benefited
Jindal, shouldn’t it PAT margin have been higher? All this talk of the private
sector getting super profits is so much gibberish, it surprises me why our
media doesn’t bring it out clearly.
The SC is equally to blame, stepping into policy making
several times. And imposing punishment far too much in excess of the crime. For
eg., canceling all 122 licenses allotted by Raja, when only a few were involved
in allegations of corruption. Or canceling all mining in Goa and much of it in
other parts, without setting any timelines for taking the final decision. The
SC revels in the public adulation it gets when it is seen as taking “bold”
decisions.
Unfortunately, it is this “public adulation” that has become
the mojo of all constitutional bodies (CAG, SC). While bureaucrats in the
government are painted as being corrupt, their equivalents in the CAG and SC show
themselves as angels. In the public eye, ex Coal Secretary Parakh is corrupt,
while Vinod Rai is a hero. Ashwini Kumar is corrupt, but Ranjit Sinha is a hero
(isn’t it ironical that the BJP vociferously opposed his nomination as CBI
chief?!). In a way, this public adulation of a few, started off first by Anna
via his fasts, and fuelled by a media, searching for something, anything, to
keep its business growing, is what is responsible for the present mess in
politics, business and administration.
Its hardly fair to blame one political party – the Congress
– for this. The BJP equally failed in so many states (where it lost the most
recent elections). The BJP may be more
competent with communication skills than the Congress, but it cannot
hide its own equal involvement in corruption. It is also responsible for the
parliamentary logjam that we have seen over the last few years. The BJP has to
remember that if it comes to power – and that remains a big if – then it will
have to face the same political/regulatory/administrative environment. Its in
its own interest to work with other parties in bringing balance back, in
stopping from calling every administrative and political decision corrupt, and
in calling any one party the “most corrupt in history”.
The real truth is that our constitutional bodies –
CAG, SC – and important institutions – like the CBI – have hurt the country.
This is no “clean-up”. This is just “self preservation” or rather “saving one’s
as$”. This is a form of “Indian spring”, something that may hurt the present government
most immediately, but which may leave a far longer spell of instability (like
in Egypt) than we are imagining…..
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