Actual vs Notional: CAG, Coalgate and the credibility joke

It could be purely accidental, but the element of orchestration is hard to miss. First the CAG churns out fantastic figures of ’notional’ loss to the national exchequer on a particular commodity. Its report, even when at the preparatory stage, gets leaked to select media outlets inclined to be ‘anti-establishment’ to an extent that is comical and a ‘debate’ gets rolling. Then the rant media takes over. On television, anchors get into the usual theatrics to express their sense of outrage at the plunder of the nation and elsewhere in the media  bigger issue is reduced into a Congress vs the BJP story. [caption id=“attachment_427332” align=“alignleft” width=“380”]  The CAG is supposed to function in the land of the actual, not notional.[/caption] When the media peg their argument on the degree of credibility – of the CAG and the government in the coal case – of institutions one understands they lacks the intellectual wherewithal or honesty to have a critical understanding of the issue at hand. It is also clear that unearthing the truth is not a priority for the media. In a situation where they have to choose between the apparent honest intention of one and the apparent dishonest conduct of the other, they take the easiest way out. They diminish the unfathomable to a political question. It is rather interesting that we still don’t have many media reports deconstructing the CAG’s report and putting probing questions to the national auditor. We still don’t have relevant queries on the concept of the ’notional’. If everything comes down to notional calculations where does it end? An auditor’s job is not to get into the territory of the hypothetical. The equation under the existing arrangement is simple. The government makes policy. If there’s criminality involved in the execution of policy, like in the 2G case, then other agencies, including the judiciary, move in. The CAG is supposed to function in the land of the actual, not notional. We still don’t have a good explanation for the national auditor’s obsession with auctions. Imagine a situation where all residential units in Mumbai are auctioned out. Who gets to benefit the most? The moneybags, of course. They will acquire all the property. The skewed property market has already driven the middle class out. Auctions will close the option for them to even dream of a house in the island city. Governments have to take into consideration several aspects before taking policy decisions. The process is not as easy as many of our friends in the media would like us to believe. The CAG’s job is to get into accounting only and it has the advantage of hindsight. The government has no such benefit. The states, mostly the BJP-ruled ones, argued that the competitive bidding for coal blocks would lead to substantial increase in the cost of coal. Power generators or other heavy industries dependent on coal will not be in a position to afford the cost. If they manage that, they will pass the additional burden to the end consumers, who will end up in a difficult financial situation. Some contended that auctioning will hit their industrialisation process. What’s so wrong with the argument? The sensational numbers in the CAG report easily overshadow the practical considerations. Most in the media reports have deliberately ignored this aspect of the coal allocation issue. Had the government not paid attention to the state government and gone ahead with auctions, they would have called it violation of the principle of federalism. We have seen the drama over the National Counter Terrorism Centre and the Lokpal Bill. The media must make up their mind. They look foolish when they jump to taking sides without understanding the complex nature of issues they take up. Why don’t they apply the ‘credibility’ criterion in case of the states too? Well, it disturbs the Congress vs BJP construct. The purpose of the article is not to defend the UPA government or the states which opposed auctioning. They deserve to be punished if there is an act of criminality on their part. The intention is to bring to notice our pathological fascination for big numbers and the tendency to reduce every issue into a nasty political farce. The so-called coal gate issue makes it obvious that players in the media find government bashing far more easier than getting into the nitty-gritty of auditing. The trend is dangerous and it does not portend well for the health of institutions in the country.