Manmohan vs Team Anna: why PM’s 'innocence' rings hollow

Prime Minister Manmohan Singh has responded with a tone of injured innocence to Team Anna’s direct charge accusing him of having “abused his position to give huge pecuniary benefits to private parties” in the allotment of coal blocks between 2004 and 2009. Singh has offered to withdraw from public life if the allegations made against him are proved. “It is unfortunate,” he said, “that irresponsible allegations relating to irregularities in allocation of coal blocks are being made without confirming facts.” At the most fundamental level, it is easy to empathise with Singh’s sense of aggrievement. He is a man who prides himself on his personal integrity, and even his staunchest critics have testified to his personal probity. Mega scandals may swirl around him, but thus far, none of the corruption charges have adhered themselves to the “teflon Prime Minister” – even though, as happened in the 2G telecom scam, his wilful failure to intervene at critical stages of the policymaking process allowed the scam to be perpetrated. [caption id=“attachment_299388” align=“alignright” width=“380” caption=“Injured innocence is a poor shield against the specific charge directed at Manmohan Singh. Reuters”]  [/caption] Yet, in the case relating to the allotment of coal blocks, Singh’s sense of anguish – and his staking his personal integrity on the line - is an inadequate response to the nature of the charges against him. The case is fairly complex, and it didn’t help that an initial draft report from the Comptroller and Auditor-General (CAG) perhaps vastly overstated the “loss to the exchequer” arising from such allotment of coal blocks to private parties. The CAG’s draft report, which was leaked to The Times of India in March, flagged the loss to the exchequer at a monstrous Rs 10.67 lakh crore – or six times as much as the Rs 1.76 lakh crore loss from the 2G spectrum allocation. Firstpost had, however, pointed out ( here ) that the Rs 10.76 lakh crore figure was an optical illusion. “The mere fact that private players may have benefited from the allocation of coal blocks does not amount to a scam if the government decided to do so with its eyes open – and in a fairly transparent manner,” we had noted then. Even the CAG had, barely a day after that draft report was leaked, noted that on the basis of clarifications issued by the Coal Ministry, it had reason to “change its thinking” on the extent of the loss to the exchequer. “In fact, it is not even our case that the unintended benefit to the allocatee is an equivalent loss to the exchequer,” the CAG noted in a letter to the government. ( More on that here.) Firstpost had also noted ( here ) - in the context of the Supreme Court’s observation on the merits of auction of national resources – that a judgement on whether to opt for an auction process ought to be made in the context of the policy objectives that were sought to be met. There are times when resources are deliberately offered cheap – or even free – to parties because the objective then was to expand the market. The only critical consideration is whether it was done in a fair and transparent manner. So, to reiterate, the mere fact that coal blocks were allotted to private players at dirt-cheap rates does not in itself amount to a “scam”. It all depends on the policy objectives that were sought to be met – and the transparency of operations. To that extent, the Prime Minister is on a strong wicket. The critical question – beyond estimations of the “loss to the exchequer” – is whether the allocation of coal blocks was done in a fair and transparent manner and, if not, who benefited from the process, and who facilitated it. As another Firstpost article had noted ( here ), citing a BusinessLine report, the coal block allotment process during 2004-09 was handled by a screening committee presided over by the coal secretary, but “all was far from well in this highly subjective selection process.” What was worse was that the coal block allocation may have been riddled with the same flawed processes as in the 2G spectrum allocation - where (as with Swan Telecom and Unitech) foreign stakeholders were roped in for huge premia in the name of stake dilution even before the licence holders had begun to invest and roll out mobile services. As the BusinessLine report had noted, in the coal block allotments to, “a host of fly-by-night operators used the process to make easy money. Once allotted a coal asset, they sold their ‘project plan’ at a premium. An upcoming private power project in a western Indian location has followed this route. The price of the asset was pocketed by the original beneficiary and the country will now pay a higher price for electricity than envisaged.” In other words, the fact that a “scam” was perpetrated in the coal allotment is not in dispute – even if the Rs 10.76 lakh crore tag originally affixed to it by the CAG was an overstatement. But why has it come to haunt Manmohan Singh? Partly because during the period between 2006 and 2009, when the allocations were made at a furious pace in comparison to earlier times, Manmohan Singh personally headed the Coal Ministry – and the Prime Minister’s Office played a particularly active role in the shaping of the policy on coal block allotment at that time. (For more details, see the ‘charge-sheet’ filed by Team Anna here, and the draft CAG report here.) And even beyond the controversial coal allocations of those times, even as late as in March this year, the PM or the Prime Minister were in the thick of actions that would directly benefit private power producers at the cost of Coal India, which is 90 percent owned by the government of India. (More on that here .) Team Anna’s ‘charge sheet’ alleges that “Dr Singh abused his position to give huge pecuniary benefits to private parties, which is an offence under Section 13 of the Prevention of Corruption Act.” Under Section 13 (d) (iii) of the Prevention of Corruption Act, “a public servant is said to commit the offence of criminal misconduct if he, while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.” In other words, under this provision, it isn’t necessary for a public servant – in this case, Manmohan Singh – to have personally benefited for his action to be construed as “criminal misconduct”: all that is required is for “any person” to obtain “any valuable thing or pecuniary advantage without any public interest.” In this case, private parties did reap “undue benefits” – and public interest was ill served - from policy decisions that were taken during the time when Manmohan Singh headed the Coal Ministry and the PMO was actively involved in the coal allocation mechanism process. Prima facie, all the provisions of the specific section of the Prevention of Corruption Act appear to be well met in this case - which is why Team Anna has sought a thorough independent investigation into the matter to establish the extent of Manmohan Singh’s involvement in the actual decision-making. For Manmohan Singh, therefore, to claim that his personal honour has been slighted by the allegation is an irrelevance. It is not his personal integrity that is being questioned – but whether his actions as a public servant had the result of benefiting private parties at the cost of public interest. And in that sense, despite all the clarifications that the Coal Ministry has offered ( here and here), he and his office have much to answer for in the coal allocation process. The honest way to address Team Anna’s very specific charge is to appoint an independent investigation into the allegation. Injured innocence sure makes for good political theatre, but it is a poor shield against – and a diversion from – the serious and very measured charge that has been levelled against him.