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Wednesday, Oct 27, 2021
Outlook.com

Tunnel Vision, Darkly

The irregularity of allocation and the inability to exploit the mines don't seem like chance outcomes or mere procedural delays.

Tunnel Vision, Darkly
Tunnel Vision, Darkly
outlookindia.com
-0001-11-30T00:00:00+05:53

The reversal in policy terms of the Coal Nationalisation Act of 1973 and the allocation of coal to private players is at the heart of the current impasse in Parliament. It will, however, not be analysed at that level if the issue is turned into a poll plank as the country’s two main national parties take their slugfest to the campaign trail. In Parliament—as indeed in the ‘official’ press conferences that purport to make up for the absence of parliamentary deliberation—the squabbling has revolved around two things: the CAG’s observation that coal deposits were distributed in an irregular, arbitrary manner, and the Rs 1.85 lakh crore estimated value of these ‘undue benefits’. I argue for shifting the terms of this debate. Even at the risk of tilting the argument somewhat in favour of the government’s defence, I concede that the policy of allocation rather than bidding has some basis in reason—as also in law. Regardless of this, there can be no denying that its opaque and wilful implementation, lack of superintendence, and ‘zero’ outcome have diminished the image of India’s tallest reform leader. Such shortfalls also lead one to question why the prime minister should be left out of the net of accountability—even when policy intents go horribly off-track.

The policy choice favouring non-competitive allocation is not completely faulty, and for good reasons. For one, we would not have had a pure, end-to-end, market-based competitive process in any case. There is government intervention in fixing the price of power—the ‘end use’ to which the mined coal would be put. Also, there exists a high local variability that would have rendered the ‘average pricing’ method adopted by the CAG unworkable in practice. The most significant of these are the local...

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