How palm oil from Malaysia fired the Patel agitation in Gujarat

Dhirubhai is in dire straits. He can no longer recover his investments on the groundnuts he grows on three acres of land along the Junagadh-Verawal road in Gujarat.

In a good year, he grows 100 kilos of groundnuts – or peanuts – for every Rs 4,000 he invests. The minimum support price – or the price at which the government buys the crop – is Rs 4,400. But the middle-aged farmer said government officials buy only from “vyapari aur mota rajkarmi” (traders and big farmers). Smaller farmers like him sell to private oil mills at very low rates. Last year, he got just Rs 3,500 for every 100 kilos of groundnuts – lower than both his investment and the minimum support price.

Blame it on rising edible oil imports — especially palm oil. And therein hangs a story. Do read.


Is a monopoly taking shape in India’s port sector?

The mood in the Odisha port town of Paradip is turning grey.
Ever since the Adani group bought the neighbouring port of Dhamra last May, people and companies dependent on the port are worried Paradip is being weakened to favour Dhamra. “I handle 70% of the cargo at Paradip. I have 1,000 employees,” said a senior official in Orissa Stevedores, a company which assists with the loading and unloading of cargo from ships. “We will have to shut down if anything happens to Paradip.”
The fears are located not merely in the proximity Gautam Adani, the Chairman of the Adani Group of companies, is alleged to have to Prime Minister Narendra Modi. A clutch of developments in recent months have contributed to them.

why odisha’s empty engineering colleges hurt students and not their owners

As colleges go, Krutika Institute of Technical Education is certainly educative.
Located on the outskirts of Bhubaneswar, this private engineering college works out of a half-built red and cream building with iron rebars bristling from its top. The lobby stands unfinished with its girders exposed. Similarly unfinished, the water fountain in front is no more than a square pit filled with rainwater, with wild grass like the local white-topped kasatandi growing around it.
The college library is housed in a large hall that is mostly empty. Bookshelves stand at the far end, occupying a rectangular patch the size of a living room.
KITE, as the institute is known in Bhubaneswar, is a college whose plans have gone awry.
According to its faculty, the college was set up about five years ago in the hope of attracting 300 engineering students a year. However, it has been affected by an abrupt collapse in the demand for Odisha’s engineering courses. This year, 31,000 of the 46,000 BTech seats offered by government and private colleges in the state have stayed vacant. At KITE, just 30 students have joined the 2015 class, a faculty member revealed on the condition of anonymity.

Coalgate. Part Two.

one more reform measure of the NDA promises a lot but, ultimately, looks like it will change nothing.

#coalgate. as for the attempts to avoid deallocation of operational blocks…

my previous story on the supreme court hearings into the captive coal block allocation was a bit of a curtain-raiser. it said when hearings resume on monday, the biggest question before the judges will be re: what to do with the blocks where mining has already started.

as things turned out, a set of industry associations and the government proposed a compromise formula to the apex court. among other things, they proposed that the SC levy a penalty of Rs 295 per tonne on coal mined — in the past and from now on. they also recommended that power producers with captive coal blocks be allowed to henceforth sell power only through longterm power purchase agreements (PPA) and not in the merchant market. in the story out today, i argue that this is a flawed idea.

and the supreme court comes in with an excellent verdict

yesterday, the SC ruled that all coal block allocations, from 1993 onwards, were illegal. and i, little rajshekhar, wrote this edit.

The Supreme Court’s ‘Coalgate’ verdict needs to be welcomed. It gives India a rare second chance to fix terrible decisions made by our politicians.

The coal allocations scandal is not an outrage merely because undeserving companies got coal blocks. It is an outrage because it concentrated the ownership of India’s coal reserves among a handful of businesses. In the process, it warped competitive advantage in the power-generation market where thermal projects relying on coal linkages and imported coal found themselves unable to compete with companies with captive blocks.

It also accelerated the country’s dependence on imported coal. Which, in turn, created fresh scams around coal imports. Coalgate also accelerated the loss of India’s already battered central forests and imperilled the rivers that originate from there. We now have a chance to set some of these things right.

But, for that, two things need to happen...

on how india’s attempts to fix the coalgate mess are faring

in the days after the cbi’s 14th FIR, delhi’s political circles crackled with ignorant speculation.

the FIR was the congress’ way of warning industry against supporting narendra modi, the BJP’s prime minister aspirant; the FIR had been filed to discredit pc parakh, the former coal secretary; a rival business group was trying to scupper industrialist kumarmangalam birla’s chances of getting a banking license…

in the process, a key question escaped scrutiny once again: how are India’s attempts to fix the mess created by coalgate progressing?

coalgate, remember, is not about small, undeserving companies getting coal blocks. nor is it about the government blowing a chance to rake in cash by auctioning them. it is about a resource grab where a handful of companies cornered 44 billion tons of coal, leaving coal india (CIL) with just 49 billion tons to meet coal demand from the rest of the industrial sector.

as such, its fallouts are serious. by concentrating ownership of coal reserves, coalgate has distorted the thermal powerplant market. power plants which have to import 35% of their coal — due to a weakened CIL’s inability to meet everyone’s coal requirements — cannot compete with power plants with captive blocks. projects have been abandoned. consolidation and bank write-offs look likely.

it has also pushed the country towards an oligarchic future and compromised india’s energy security. it has also accelerated the loss of india’s central forests and imperilled the rivers that originate there. CIL, with a range of coal blocks to mine in, could defer mining in pristine forests. a company with a single block doesn’t have this luxury.

over the past year, multiple institutions, from the supreme court to the CBI to the coal ministry, have been examining different aspects of coal and coalgate. between them, the country has a rare second chance to get its act on coal together, to set in place a new architecture which provides cheap, plentiful coal equitably till the country can move to cleaner fuels.

the question is whether the corrective steps underway are taking us in such a direction.

which is what this story out today is on.