by PRAFUL BIDWAI
Kumar Mangalam Birla, an industrialist whose net worth is $7.6 billion PHOTO/Forbes
Last week, India’s Central Bureau of Investigation did something unusual in the coal-block allotment scam – if only because the Supreme Court goaded it. It filed a First Information Report against top industrialist Kumar Mangalam Birla and former coal secretary PC Parakh for illegally allotting two coal blocks in Odisha in 2005 to Hindalco Industries to generate electricity. The blocks had been reserved for public-sector undertakings (PSUs) Neyveli Lignite Corp and Mahanadi Coalfields.
Tycoons and industry chambers came down like a ton of bricks on the CBI, defending Birla in the blind, and accusing the government of damaging investor morale amidst the economic slowdown, and attempting to scare “business out of the country”.
Parakh gave the controversy a new twist by claiming the allotment was fully justified, and that he had himself dropped his opposition to it once he “found merit” in it. He also said that if the CBI suspects a conspiracy, it should logically make Prime Minister Manmohan Singh a party too because he approved the decision as the then minister for coal.
As it turns out, Parakh’s account isn’t correct. Nor is his credibility very high: after retirement in 2005, he joined three private energy firms as a director, two of which are under investigation. As chairman of the official screening committee, Parakh opposed Hindalco’s proposal in January 2005 because the company had been allotted another block but failed to generate power for 11 years.
The committee’s decision was overturned by Manmohan Singh, no less. His office justifies the allotment as “entirely appropriate” and in the “spirit of federalism” (helping Odisha). It claims the concerned PSUs’ interests were duly “factored in”.
This is the first time that an Indian prime minister has confessed to, and taken credit for, allocating precious natural resources to private capital on an arbitrary basis. His defence of sleazy crony capitalism couldn’t have been more brazen. If this sounds harsh, consider the following.
Finite fast-depleting natural resources like coal, which India now imports from faraway Australia and Indonesia at an exorbitant cost, should not be given over to private companies in the first place. India nationalised coal way back in 1973 precisely because private companies were mining coal in a ruinously irresponsible and haphazard manner, violating all considerations of environmentally sound management, while causing extensive pollution and underground fires.
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