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Paranjoy Guha Thakurta

The Black Story

Date published: October 24, 2012Publication: Kindle Link to original article

“For some, coal means diamonds and gold. For others, the coal signifies bread. They go underground not to take out coal but to sustain their life. They put their lives at risk. They are ready to face death at any moment. But they don’t earn much. The bulk of the profits generated by mining coal is appropriated by the mafia. This is the main reason for poverty here.”

This was a perceptive statement made by Amit Raja, a talented journalist who has authored a book titled Aag mein Jharia (Jharia on Fire). I met him five years ago when I was working on a documentary film series entitled Hot As Hell: A Profile of Dhanbad which sought to highlight how underground fires – literally and metaphorically – have been raging for a century in and around the township of Jharia in the district of Dhanbad (often described as “India’s coal capital”) in Jharkhand.

Tens of thousands of residents of Jharia are living on top of a veritable inferno. There are powerful mafia organisations that rule over this region and exploit the underprivileged – by mining illegally, supervising organised pilferage, running extortion rackets and bagging lucrative contracts. At least one former mafia don of the area Suraj Deo Singh (who was a member of the legislative assembly of the undivided state of Bihar) was known to be rather close to former Prime Minister of India Chandra Shekhar.

In 2007, one could scarcely have predicted that corruption relating to allotment of coal blocks would rock the government the way it has in recent weeks. Coalgate has nothing to do with your teeth, sensitive or otherwise. It has everything to do with a black mineral without which India would not have been able to generate nearly two-thirds of the electricity it consumes. Despite the advances the country has made in producing power from water, wind, sunlight or nuclear fission, India will remain heavily dependent on coal-based thermal electricity to meets its energy requirements for at least the coming two decades; possibly longer. Without coal, we would also have had no steel and no cement.

There have been innumerable scandals associated with coal mining over the years. But why has this one blown up in the face of the government? The answer is simple. As Jharkhand Mukti Morcha leader and former Union Coal Minister Shibu Soren moved in and out of jail and unsuccessfully aspired for the job of the Chief Minister of Jharkhand in Ranchi, administrative charge over the Union Ministry of Coal automatically devolved on Prime Minister Manmohan Singh. The story begins here.

Dr Singh was personally in favour of public auctioning of captive coal blocks and stated as such within a few months of his becoming Prime Minister in May 2004. Although the rules of the game had been changed much earlier, to be precise, in 1993, during the P.V. Narasimha Rao government, and private players were allowed to enter a domain that had been dominated by the public sector Coal India Limited for two decades since the early-1970s, the allocation of captive coal blocks had not become a major scandal.

The point to note is that despite the wishes of the Prime Minister, coal blocks for the captive use for the production of power, steel and cement were allocated by a screening committee in an opaque and arbitrary manner instead of being auctioned in a transparent manner. The scandal hit the headlines after a report of the Comptroller and Auditor General of India was tabled in Parliament on 27 August.

The Congress sought to divert attention by pointing out that auctions of coal blocks had been opposed by Bharatiya Janata Party governments in Rajasthan, Chattisgarh, Jharkhand and Madhya Pradesh, the Biju Janata Dal government in Orissa and the Left Front government in West Bengal. Though coal is a central subject, the representatives of states wanted to have a say in the allocation of coal blocks ostensibly to ensure that the promoters of companies which got rights to mine coal also set up projects in the state where coal blocks were located and not in other states.

What is significant is that there was considerable dilly-dallying in instituting a system of public auctioning of coal blocks by the government itself when the Coal Ministry was controlled by two former Congress Ministers of State for Coal, Dasari Narayana Rao and Santosh Bagrodia, even as the Prime Minister remained a silent spectator. An effective regulatory authority was deliberately not put in place. Promoters of companies, many of whom were not even eligible to obtain mining rights in the first place, squatted on coal blocks in anticipation of windfall profits as coal prices rose, and also by selling their equity stakes to other companies at huge premiums.

When one looks at the list of persons linked to the scandal, it becomes crystal clear that this is crony capitalism at its worst. Such persons include important Congress MPs and MLAs (such as Nagpur MP Vijay Darda, his brother, Maharashtra Education Minister Rajendra Darda, Congress MP Naveen Jindal and his brother-in-law) and individuals close to at least four present and former Union Ministers belonging to the UPA. They include Subodh Kant Sahay, Minister for Food Processing, Sri Prakash Jaiswal, Minister of State for Coal and his predecessor Santosh Bagrodia, besides S. Jagathrakshakan of the DMK, who is Minister of State for Information & Broadcasting. For the Congress, it is some consolation that a BJP MP Ajay Sancheti, who is close to party boss Nitin Gadkari, has also been linked to the scandal.

Coalgate traverses a predictable path. Natural resources that belong to the people of the country have been sold for a song. When Finance Minister P. Chidambaram suggested there was no loss to the exchequer, since coal lying under Mother Earth was yet to be extracted, he was at best uttering a half-truth. As custodian of resources that are supposed to be owned by the country’s citizens, the government had given up its mining rights in favour of private firms (including some that only had expertise in manufacturing gutka and compact discs).

What is worse is that although this coal has been virtually gifted to these companies, ordinary citizens did not gain from a lowering of electricity, steel or cement prices. It was in every respect a lose-lose situation for all but a privileged few, for whom the objectives of government policy were deliberately inverted and subverted.

Anurag Kashyap’s film Gangs Of Wasseypur may be a gratuitous celluloid offering of violence and abuse in the towns of Dhanbad. But the story of Coalgate is far more gory than any fictionalized account can ever hope to be.

Date posted: September 17, 2014Last modified: September 17, 2014Posted byParanjoy Guha Thakurta
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