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Why does the IAS Association defend HC Gupta but not Ashok Khemka?

Our second piece on this ghastly caterwauling over ex-coal secy HC Gupta.

The fervent defence of former Coal Secretary HC Gupta seems to be taking India into dangerous waters.

India’s Prevention Of Corruption Act, 1988 should be amended, wrote Partha Sen Sharma, a serving Indian Administrative Service officer in The Times Of India on Tuesday, to “make it mandatory to prove pecuniary benefit to a civil servant before he can be implicated in criminal liability”.

Sharma is not the first person to articulate this demand. In the last two weeks, ever since the former coal secretary HC Gupta, currently under trial for his role in the captive coal block allocation scam, told the special CBI court that he wanted to withdraw his personal bond due to financial difficulties, a clutch of serving and retired IAS officials have said that a quid pro quo – a favour or advantage granted in return for something – needs to be established before a bureaucrat can be put up on trial.

Take former cabinet secretary BK Chaturvedi. In a column titled “Civil Servants Bear The Brunt Of Corrupt Governance”, a sentiment that India’s poorer millions would probably have sharp words about, Chaturvedi wrote: “Unless there is clear proof of mala fide decisions made by the officers and clear benefit received by them, criminality cannot be assigned.”

These are problematic suggestions. If accepted, they will result in a dramatic reduction of the bureaucracy’s accountability to the rest of the country.

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What the people defending former coal secretary HC Gupta are not telling you

Last week, former Coal Secretary HC Gupta surprised everyone in the Central Bureau of Investigation Court. He intended to “face trial from inside the jail” and withdraw the personal bond he had submitted in order to obtain bail, he told Special Judge Bharat Parashar. Gupta is an accused in several coal block allocation cases relating to corruption. On being asked why, Gupta said he was in financial difficulties, struggling to even engage a lawyer.

The news triggered a minor furore – especially amongst the bureaucracy. The IAS Association announced it would meet Prime Minister Narendra Modi and Law Minister Ravi Shankar Prasad to communicate, as the Indian Express said, the duress officers will be “under if “honest decisions” are construed as mala fide.” “There can be errors of judgement in the course of work,” said secretary of the Association, Sanjay Bhoosreddy. “But that does not mean there is any criminal intent or quid pro quo.” Subsequently, news reports and op-eds – like this and this and this – also warned that the court’s decision to charge Gupta might paralyse the bureaucracy.

On the whole, it seems that both the IAS Association and the people defending Gupta need refresher courses in both accountability and the captive coal block allocation scam.

while in ET, my friends john samuel raja, avinash singh and i had taken a close look at the coal scam. it was educative then. and it is educative now. at that time, we got to see some of the processes damaging india up close. right now, it is a window seat to a different process — on the contest between those wanting to deliver justice and those trying to thwart it.

Questions the CBI should answer before closing its probe in the Jindal coal block case

Even under the Bharatiya Janata Party-led National Democratic Alliance, the Central Bureau of Investigation’s inquiries into the captive coalblock allocation scam continue to be half-hearted. In the latest instance, as the Indian Express reported on April 2, India’s apex investigating agency has closed its probe into how former Congress Member of Parliament Naveen Jindal’s Jindal Steel and Power Limited landed the Ramchandi Promotional coalblock in Odisha.

This was one of two blocks allotted by the previous United Progressive Alliance government – not for captive use – but to convert the coal in these blocks to oil using a technology that had never been used before in India. The other block was North of Arkhapal Srirampur in the same state. It went to Strategic Energy Technology Systems Limited – a joint venture between India’s Tata Group and South Africa’s Sasol, an energy and chemicals company.

Controversy surrounded these allocations from the start.

And so, it is surprising to see the CBI’s explanation for wanting to close the probe. This, of course, is an old pattern. Back in 2014 too, the CBI was closing coal cases with gusto. See this. And this.

Will India’s recent coal block auctions actually burden banks and skew the fuel market?

The first part of Scroll’s analysis of the coal block auctions took a close look at the auctions for the steel, cement and aluminium sectors. It found an extremely wide divergence in the winning bids. Some blocks went for twice the notified price of coal, or the price at which the bulk of India’s coal is sold, while others fetched a quarter of it. A similar divergence is also visible in the auctions of coal blocks for the power sector. Here, the concern is over the viability of the some of the bids. In a report published on March 16, which analysed the second round of auctions for the power sector, stock brokerage firm HDFC Securities said, “We believe there is a high probability of end use plants becoming unviable, even after factoring in merchant sales.”

the second part of our two-part story on the ongoing coalblock auctions. See previous post.

Are the coal block auctions as successful as the Modi government claims?

At a gathering in Paris last month, drawing attention to the coal block auctions that have taken place under his government, Prime Minister Narendra Modi boasted, “Twenty coal blocks out of 204 have been auctioned so far and we got more than Rs. 2 lakh crore from them.” The factual error in the statement – 31 blocks, not 20, have been auctioned in two rounds – might be the least of the problems with the government’s triumphal sentiment.

To start with, as a report in Business Standard explains, the Rs 200,000 crore is not a one-time payment flowing into government coffers, but revenues that are likely to accrue over the lifetime of the mines. These revenues include royalties that states would have earned regardless of whether the mines had been allotted or auctioned.

While auctions are an improvement over the discretionary allotments of the past, and the government has shown swiftness in moving ahead with them, what isn’t well understood is that the design of the auctions has a significant impact on their transparency and outcomes. Competitive auctions are meant to provide a market-based mechanism to discover the value of a resource. But poor design could impede price discovery.

As the government prepares for a third round of auctions, Scroll in a two-part series, takes a closer look at the first two rounds. Our analysis raises worrying questions about both the design of the auctions and their outcomes.

Why the CBI cannot claim much glory for filing a chargesheet against Naveen Jindal

The Central Bureau of Investigation on Wednesday filed a chargesheet against industrialist Naveen Jindal and 14 others in the Amarkonda Murgadangal coal block allocation matter. The matter will come up for hearing in the CBI court on Thursday. Apart from Jindal, among those named in the chargesheet are former Minister of State (Coal) Dasari Narayana Rao, former Jharkhand Chief Minister Madhu Koda and former coal secretary HC Gupta. The chargesheet centres on a transaction in 2008 where a company owned by former directors of the Naveen Jindal Group, and then by Jindal himself, gave an unsecured loan of Rs 2.25 crore to a nondescript trading company called ND Exim. This company then used the Rs 2.25 crore to buy shares of a company owned by Rao on extremely generous terms.

In this story, I argue that the CBI should not get any credit for this chargesheet. that its work, as i have written earlier, has been more coverup than investigation.

And then, the NDA decided to allot coalblocks to state PSUs for commercial coal mining…

out today, this quick and dirty story about the issues that need to be considered before allotting coal blocks to state companies for commercial mining. the last time this was tried, things were a complete snafu. see these two stories — one, and two.