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What are the facts and what is at stake? The facts are that the CAG loss of Rs 1.86 lakh crore from the non-auction of coal mines is suspect. Even by the CAG’s own admission, the loss may have been less. The second fact is that while simultaneously tabling three reports in Parliament — coal, power and airports — the CAG, for reasons open to speculation, decided to use a 10 per cent discount rate to obtain the estimate of the government’s loss (or equivalently, the scam estimate) from power and airports, but a zero per cent discount rate for coal. Given that the time period of gains from all three sectors is 25 years or more, this decision is, at a minimum, inexplicable and suspect. A 10 per cent discount rate would reduce the CAG estimate of the scam by over 60 per cent — a large decline from the lofty figure of Rs 1.86 lakh crore. Is that why the CAG used a zero discount rate — because Rs 74,000 crore does not sound as ignoble as Rs 1.86 lakh crore? Are sound bites worth a gross, deliberate miscalculation?
If the CAG had chosen a zero discount rate for all three reports, then there would be some doubt about what they were trying to achieve. And the benefit of the doubt by most, and especially PLU+s, is always given to champions against the government, the champions of truth, justice and the Indian way. So the CAG would have an excuse for not undertaking the most elemental of calculations — we didn’t know, we don’t have the expertise, or that it is a minor technical objection, so why aren’t you looking at the big picture.
And the big picture is the fight against corruption, fight against a big brother government and fight against crony capitalism. In my view, all of these fights are extremely worthy fights, and battles I fully subscribe to. The way this government has handled issues related to the internet, the way state governments have handled cartoons and criticisms, all of this suggests that big brother behaviour a la our neighbours in China needs to be fought. I have some problems with the fight against crony capitalism; the fight is too narrow. The CAG’s narrowness was revealed by the fact that strangely, and contrary to the draft report, the final report did not include any losses to the larger, much larger, public coal sector. This is a new definition of corruption and cronyism. If the public sector does it, it is okay. Why? Is the public sector less susceptible to cronyism, even though it is easier for the public sector to be in bed with corrupt politicians? Is the public sector less corrupt, and if so, what is the evidence, especially since most of the evidence (for example, Air India, Ashoka hotel) points in the opposite direction? And who makes the rules for crony capitalism to flourish? The public sector government — so shouldn’t we be talking about crony socialism rather than reflexively shouting crony capitalism? Unless we mean crony socialism when we say crony capitalism, in which case we should use the correct term.
Now to the big picture fight against corruption. According to the PLU+s, if it were not for the vastly exaggerated claims (read calculations which the CAG knows are dishonest), then the fight against corruption would not succeed. Interestingly, the BJP has made the same outlandish claim. To reiterate, the BJP and PLU+s both believe that the CAG can be excused for lies because there is a bigger “lie” to be nailed — and that the CAG lie is necessary for the worthy fight against corruption and crony socialism.
Let us delve a bit deeper into the morality of this view. Assume for a moment that I believe that Manmohan Singh has been terrible for India and that his removal can only bring progress to the rich and joy to the poor of India. Does that mean that I can spread blatant lies about the PM? I hope you say, “of course not”. Ends don’t justify the means. And after all, the reason we have a democracy is because we don’t want to be dictatorial; I may not be right in my views and maybe Manmohan Singh’s removal wouldn’t be so good for the country. I may believe his removal is good, but I cannot be sure, not even reasonably sure. Which makes it doubly abhorrent that I spread lies believing that I know the truth.
The BJP, by stopping Parliament from functioning, stooped lower to conquer than most democrats. That the PLU+s would excuse, nay support, such behaviour makes one question the nature of their liberalness. The PLU+s should also be aware of the fact that by supporting the CAG’s egregious lies, they are acting no differently than the Tea Party/ birther movement in the US. Identical to excusers of the CAG’s exaggerated claims, the birthers believe that US President Barack Obama was not good for the US. They had a legal basis for ousting him if they could prove that Obama was not born in the US (the US constitution requires that to be president, the citizen must have been born on US soil). As widely believed by the non-birthers, and as it turned out, Obama was born on US soil and the birther movement had no case. The question remains — were the birthers morally justified in spreading a lie in order to achieve, from their narrow vantage point, a greater truth?
A similar case of truth adjustment pertains to those, including my friends, who believe that if it is “good”, it must be true.
The writer is chairman of Oxus Investments, an emerging market advisory firm. Visit thirdpartyofindia.wordpress.com for an open forum on India’s politics




The author is right in stating that the CAG has simply sensationalised the entire allocation of coal blocks. Firstly, it should have enquired purely into process lapses and not policy decisions. Secondly, it computed 'notional losses' over a 25 year period, inflating the losses by 250% (from 76K cr to 186K cr). Third, it starts the computation from 2004, for a policy which is in existence since 1970s. As pointed out by Dr. Bhalla, in his earlier analysis, even the 'notional loss', assuming extraction of coal as per allocation is less than 1K cr; and as the FM pointed out, the coal is not even extracted - hence, no loss is yet incurred. I would suggest the CAG now investigate issuance of insurance licences in 2000-2001 (horrifying to critics - free of cost !) where players like Reliance and Max have got premiums from their JV partners on their stake - guess the govt then ? NDA ! Would CAG also now compute losses on petroleum pricing and agri support prices !
Appears that Mr. Bhalla has become a stooge to current powers-that-be and has been entrusted to "correct" public opinion about the "awesome" work done by present Govt. The CAG report - for all your blusters Mr. Bhalla - has no mention what-so-ever of a loss. It only talks about gains of private parties which other estimates suggest could be as much as 3 times higher. Mr. Bhalla has a habit of sensationalizing things throwing numbers as of some extensive mathematical modeling has gone into it. The fact is very very simple in this case - People got mines for free due to crony capitalism AND they made - are making - obscene profit. Btw - Mr. Bhalla please read the report first.
Bhalla saab - Aap sirf ye batao ki article ne apko kitna profit kiya hai :-) :-) PS: It's not hard to see the intention from such articles - we are not fools, you know!
Get well soon - if you are trying to ' see the intention' rather than facts !
Appears that Mr. Bhalla has become a stooge to current powers-that-be and has been entrusted to "correct" public opinion about the "awesome" work done by present Govt. The CAG report - for all your blusters Mr. Bhalla - has no mention what-so-ever of a loss. It only talks about gains of private parties which other estimates suggest could be as much as 3 times higher. Mr. Bhalla has a habit of sensationalizing things throwing numbers as of some extensive mathematical modeling has gone into it. The fact is very very simple in this case - People got mines for free due to crony capitalism AND they made - are making - obscene profit. Btw - Mr. Bhalla please read the report first.
Appears that Mr. Bhalla has become a stooge to current powers-that-be and has been entrusted to "correct" public opinion about the "awesome" work done by present Govt. The CAG report - for all your blusters Mr. Bhalla - has no mention what-so-ever of a loss. It only talks about gains of private parties which other estimates suggest could be as much as 3 times higher. Please read the report first.
Anyone who does not agree to a point of view is a stooge, 'vieing for Padma ? 'The fact is very simple indeed' !
Mr Bhalla , We discussed this write-up in our group of 12 friends/colleagues. We all want to say one thing in CHORUS ...... Mr Bhalla , what is your point !!! Please don't mislead the readers. We all expect at least this from your stature.
Dear Surjit Here is a take on what you hear and why you hear from PLU s: It's connected to times of Mahabharat! UPA government did wrong in 2G, CWG and many other cases and stood firm on it's majority in Lok Sabha and continued to defend wrong doers. What CAG did this time is it gave larger exposure - it may be wrong and CAG himself admits that these are deemed losses and may vary depending on various factors. For the same reason CAG didn't include CIL as CIL is Govt. arm. Yes CAG could have given number in terms of loss if CIL had all the blocks and didn't efficiently mine them and thereby causing deemed loss, but that's a different matter. What do you do when faced with such people as in UPA who are hell bent to committing wrongs? You do what Krishna did in Mahabharat: "naro vaa kunjaro vaa". So this half-truth by CAG is merely that and this is the "noro va kunjaro va" moment of UPA. You can't win a fight when you opponent is not fair and hence what CAG or BJP did is justified.
This is called 'intellectual bankruptcy'. For one, the CAG delved more on profiteering by private players than on loss to the Government. In effect it is a loss to the Indians who did not get any power or other infrastructure facilities by the mindless allocation of coal blocks. By the Government's own admission, this is true as most coal blocks allocated to 'all their own men' remained inoperative, thus giving them undue price advantage. The main purpose of helping Power and Infrastructure remained a pipe dream. As in case of Jindal, where coal was extracted, power manufactured with low cost coal was sold at steep prices. In one case, SCCL, Kothagudem was overlooked to grant coal blocks in favor of a Congress MP's relation. About PM, less said the better. He is like a Slip Fielder in cricket, who drops 99 out of 100 catches, but is still kept in the same position by the Captain for reasons other than his proficiency. His 'deemed honest but tragic(sic.) face' brings no cheer.