The thick dust of the coal block allocation scam refuses to settle down. After enveloping over a dozen mining companies in its black soot, the coalgate twister threatens to blow away Prime Minister Manmohan Singh and the bureaucracy. Last week, all the underlying issues of the coal allocation fiasco came to a flashpoint with the CBI alleging that the Aditya Birla Group was another beneficiary of crony capitalism. With the CBI digging deeper to unravel the corporate-political nexus, all fingers are now pointing at the PM, who was in charge of the coal ministry when the mines in question were allocated to the business houses.
The past and the present of this case remain murky. Over the past decade, India has been a cauldron of obfuscated rules and regulations, which has resulted in the exploitation of resources of all kinds, from 2G spectrum to coal, with little transparency and no auctions. This cross-stitch of situations opened up opportunities for misuse. Politicians exerted power, bureaucrats displayed control and industrialists tried to influence decisions to get resources their way.
The loopholes in the system meant that apart from bona fide companies, which had the necessary expertise in sectors where auctions were held, fly -by- night operators also managed to lay their hands on scarce resources.
Ending the business-politics nexus is the only way out of this quagmire
The nexus between politics, big business and white-collar crime is present in myriad forms across the globe. In India, the corrupt coalition between those who have and those who wield authority — often present in the same person — is strengthened by other sections, which include bureaucrats and media personnel. If the conversations involving Niira Radia bear testimony to the role of a few influential journalists in perpetuating this nexus, what coalgate has revealed is how the cosy relationship between corporate captains and powerful politicians has contributed to much that is wrong with the country at present.
In more ways than one, Kumar Mangalam Birla and Prakash Chandra Parakh epitomised all that is supposed to be good about enlightened entrepreneurs and honest bureaucrats, respectively. Yet, ironically, both have become embroiled in independent India’s biggest scandal. It would be naive to believe that the CBI’s investigations into corrupt practices relating to the allotment of coal blocks, which are being monitored by the Supreme Court, indicate that no one is above the law. Nor should one presume that India’s ‘premier’ investigating agency has become autonomous of pressure groups from among ministers and industrialists.
As businesses get increasingly ruthless, the system bends over backwards to facilitate mega investors. But how realistic are today’s profit expectations
The CBI may (unlikely) or may not have a case against Kumar Mangalam Birla but the latest coalgate FIR is certainly not the most jarring episode in this scandal. Even before the agency carried out an investigation to determine if it had sufficient ground for a chargesheet, Central ministers — from veteran Anand Sharma to newbie Sachin Pilot — have jumped to Birla’s defence. It has been embarrassing, yes, but not unexpected.
All through the UPA-2, Prime Minister Manmohan Singh himself has been warning his Cabinet colleagues in the environment and the tribal affairs ministries against showing the rulebook to big investors. This year, Finance Minister P Chidambaram set up the Cabinet Committee on Investment (CCI) to bypass bottlenecks (laws to the rest of us) coming in the way of mega business.
Indian entrepreneurs don’t have the option of surviving without bribing
A friend has strong views against corruption and he was stuck with a problem. He wanted to buy a plot of land. There was nothing illegal in it, but until he paid grease money, the files wouldn’t move. In that ethics versus efficiency trade-off, he eventually opted for his land and paid. As citizens, all of us confront that trade-off, the relatively poor more than others. Corruption isn’t distributionally neutral and hurts the poor more than others. Since richer-off sections can afford to opt for privatised supply of many goods and services, their interface with the government is rarer.
Like every other piece of machinery, the government machinery too needs oil and grease. Notice, these are often services that are a citizen’s right — ration cards, SC/ST certificates, driving licences, passports, land deeds, water supply, electricity connections, bank accounts, school admissions, health, FIRs. One person’s entitlement doesn’t necessarily deprive another. It’s no different for business and that doesn’t necessarily mean the corporate sector. Micro and small enterprises are victims. Ask the street vendor, the own account enterprise and the self-employed. Ask about police, excise, municipal inspectors, forest officials and labour inspectors. This corruption isn’t always about bending the law to suit one’s needs. Even if laws are not being bent, entry, functioning and exit, three stages of an enterprise, confront grease.