Coalgate: Will PM's statement force CBI U-turn on Birla?

The Central Bureau of Investigation (CBI) is all set to show that it is what it is - a caged parrot.

The statement issued by the Prime Minister’s Office on Friday strongly defending the decision to allocate the Talabira-II coal block to Hindalco is likely to force the investigative agency to close its case against Kumar Mangalam Birla, says a report in the Times of India today.

[caption id=“attachment_118378” align=“alignleft” width=“380”]  The PMO has said the allocation to Hindalco was based on merit. PTI[/caption]

The CBI had filed an FIR against AV Birla group company Hindalco, its chief Kumar Mangalam Birla and former coal secretary PC Parakh, among others, alleging criminal conspiracy in allocating the coal block already given to two public sector units.

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The investigative agency has, in its FIR, alleged that Parakh had reversed the steering committee’s earlier decision to allocate the block to PSUs after a meeting with Birla.

The FIR kicked up a storm as it was seen as an attempt to protect Prime Minister Manmohan Singh who held the coal portfolio when the allocation took place.

It is in response to this that the Prime Minister’s Office came out with a statement on Friday. “The Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and is based on the merits of the case placed before him,” the statement said.

It also said the decision to allocate the block to Mahanadi Coalfields-Neyveli Lignite-Hindalco joint venture was taken on the strong recommendation the PMO and the coal ministry received in this regard from the Odisha government, where the controversial blocks are located.

According to today’s ToI report, with the PMO’s defence of the allocation, the CBI’s FIR is likely to turn out to be a dud. The PMO’s statement was in effect a “public rejection” of its FIR.

“…We are open to the idea of closing the investigation,” the report quotes a senior official with the CBI as saying.

Clearly, the CBI’s FIR is all sound and fury aimed at implicating the entire system and saving the prime minister, as noted by Firstpost's R Jagannathan in an earlier post.

So if the CBI indeed decides to close the case, it can rest assured that its objective has been met.

However, the adverse impact of the CBI’s action is already being felt. The top executive is holding back from taking decisions on fear that they may get into trouble any time in the future. Nobody wants to take a risk, says a report in The Economic Times.

With even an honest officer like Parakh getting implicated, the officials are afraid that nobody will be spared in case something goes wrong.

Unfortunately, this is happening at a time when the economy is sagging and fast decisions are the key to the revival of the investment cycle. The CBI’s FIR may have just thrown a spanner in the works of Finance Minister P Chidambaram, who is trying his level best to revive the economy.