Team Kejriwal and Left

Team kejriwal after their decision to go political, even at the cost of split with their face of anti-corruption crusade Anna Hazare has certainly traveled some distance politically, away from their initial position of targeting UPA alone. They are now not demanding just 'JanLokpal Bill' but 'Vyavasthah Parivarthan' and are openly targeting both Congress and BJP with their abilities to 'expose' corruption scams almost on daily basis with backing of electronic media. They have even raise their level of demand to transfer 'Krishana Godavari' basin away from Reliance to some public sector company like ONGC after their latest 'exposure' on Reliance. They are time and again saying that 'Crony Capitalism' (are they willing to live with 'reformed' capitalism!!!) is resulting in a scenario where precious natural resources are being 'privatized' to benefit particular corporates and demanded transparency in the process. As a solution to the presumed evil of crony capitalism with its roots in corporate-political nexus Kejriwal is pointing out that it won't make much difference whether Congress or BJP rules and what is needed is 'Vyvastha Parivartan'. Most of these things have been pointed out by Left forces in India too for long though not with the advantage of media glare as Team Kejriwal enjoys for obvious reasons. It would be interesting to see what 'Vyvastha Parivartan' of Kejriwal entails since to trace and define the issue as crony capitalism would mean that their movement against corruption is restricted to demanding certain reforms within the limits of present neo-liberal policy framework like competitive bidding of natural resources, transparency and accountability in government functioning through institutions like Lokpal and doesn't seeks to widen its ambit to address the logic of market fundamentalism which is depriving 70 -80 percent of population of its basic needs through perpetuating glaring inequalities. When capitalism is not getting any substantial ideological challenge, most of these developments on the face of it do sound positive for most of us on Left of political spectrum and with added advantage of corporate electronic media may make some sense for 'few' on Left to go along with their call to people of the country to raise their banner of 'revolt' presumably for 'Vyavasthah parivarthan'. Since we on Left have always been raising similar sought of demands, especially after liberalization of early 1990's, for building ‘People Democratic Revolution' on road to Socialism should study these developments carefully with eye on present state of crisis of global capitalism.

 At the same time we shouldn't forget that it was the agrarian revolution on which we have put our basis of revolution through goal of radical land reforms (since about 60 percent of population of country is still dependent on agriculture) along with working class assertion for which this 'movement' has nothing to say for the time being even in their 'draft vision statement'. This is significant as it is to be understood that when Kejriwal talks about pushing the decision making power below to 'people' through institutions of gram panchayat in his book 'Swaraj' for making government and bureaucracy accountable to curb corruption, he misses the pertinent point that this can't be achieved just through some administrative and legal reforms. What would be needed is to break the socio-economic hegemony of ruling elite (landed aristocracy in left terminology) by usurping in radical land reforms. This can only ensure true 'swaraj'  at grass root levels by making Panchayati Raj institutions (PRIs) more democratic and responsive to needs of rural masses as opposed to rural elites which are presently behaving as lackeys of ruling classes of the country at local levels by controlling PRIs. For the working class too (not to confused with few privileged working at high pays in metropolis in private sector but to be understood as more than 85 percent workers toiling at below subsistence wages in unorganized sector), who creates the wealth that is being usurped away through loot by massive corruption scams on which Team kejriwal basis its movement, the draft vision document has sadly not much to offer. The document only says, 'it should be responsibility of State to provide full employment at appropriate wages' (sounds like Directive Principle of our beloved constitution which is being implemented from last 60 years!!) and 'there should be appropriate safety net for workers in unorganized sector' (Five year Plan!!). The document fails to be nearer even to the minimum demand that has been made by progressive movements of workers, youths and students in the country that 'Right to Employment' be made fundamental right and contract workers in unorganized sector be made permanent to ensure security of employment which is needed to enforce the right of collective bargaining won by working class through their historical struggle to determine wages. 

 Despite our demand of reversal of policies of liberalization and privatization after 1990's, we should be clear that there was not even an attempt to build socialism in India from 1950-90 despite rhetoric with larger share of 'State' public sector undertaking, as its basis, due to prevailing bourgeois-feudalistic class nature of State (which is the very basis of theory and practice of M-L). With the social basis of their movement largely in upper middle and middle classes which tends to dominate opinion making in society but are presently under sway of bourgeois framework, it is very much a possibility that to appease masses their demand and actions may take rhetoric nearer to left forces for a short span of time but are in reality bourgeois reformist in nature. For bourgeois to survive as a ruling class in long run it may be willing even to offer some concessions to such reformist movement (which are based largely on moralistic appeal along with demand for some administrative and legal reforms rather than concrete class analysis) in order to blacken out their adverse impact on majority toiling masses.  These developments under sway of exploitative system based on perpetuating  inequality  is to some extent similar to 'radical' call of Indira Gandhi of 'garibi hatoh' to appease masses in her battle to usurp leadership within the internal struggle of bourgeois class. This was done even at cost of nationalization of few industries like coal and banking at that time not to benefit masses at large but to maintain exploitative bourgeois system (some on 'left' did get fall in trap even at that time by failing to identify the true nature and class orientation of her movement) at hour of its then crisis. Later JP movement of 70's in absence of concrete class orientation and sound ideological basis to back its call of 'total revolution' met a fate of reformist movement despite much larger mass appeal. Similarly even in present crisis of capitalist-imperialist system of USA there was nationalization or support from public sector during last Obama regime to protect bourgeois system in pretext of saving jobs but can anyone truly on Left even think of it as revolutionary step!. Thus targetting of Ambanis by kejriwal movement and their demand of transferring Krishna Godavari basin to public sector undertaking need to be taken with pinch of salt.    

In every crisis of capitalism there are such forces which may sound revolutionary on momentary basis but Communists should be careful to analyze these forces for their real intention by relying on evolving M-L theory and practice to decide their approach to them. This is specially so when state of decadent corrupt prevailing bourgeois system in the country is at such abysmally low level historically that even call for some reforms in the system may sound 'revolutionary' in its appeal. Such reformist movements generally tend to only perpetuate the hegemony of bourgeois system over the masses by strengthening it internally through some reforms within the system. Some on left may argue that communists should interact with such reformist forces to deepen the content of the movement but the historical experience of tailing behind bourgeois reformist parties has not been very pleasant since it tend to obliterate the essential difference in the eyes of the masses between reformist and revolutionary political formations. As per M-L theory and practice too any alliance with such reformist forces can only be based on independent political orientation along with ensuring organizational independence from position of strength. With these conditions not essentially present, Left on its part should utilize the present deep crisis of the system by channelizing all its energy to build an independent revolutionary mass movement of workers, rural poor, youths and students to further its appeal politically and organizationally without getting trapped into any illusions being created by 'Team Kejriwal' reformist movement.  

Coal Scam: Saga of persistent loot of natural resources within neo-liberal policy framework

UPA government is walking a tight rope as it plunged in yet another massive Coalgate Scam which is allegedly the biggest in the history of the country. Parliament proceedings has been halted for nine continuous days now on the demand of resignation of Prime Minister as he was holding the portfolio of Minister of Coal at time of many of the tainted allocations of captive blocks to favoured private parties. It is feared that whole monsoon session will be white washed without the people of country getting to see a reasoned debate on the scam in the Lok Sabha to fix the responsibility. Ironically it is principle opposition party BJP which is stalling parliamentary proceedings though it is not over the board in the same scam as its Chief Minister of Rajasthan and Chattisgarh are on record in opposing competitive bidding for allocating captive coal mines and more importantly erstwhile NDA govt headed by BJP in 2000 even attempted to open coal mining for commercial purposes by private companies through amending Coal (Nationalisation) Act, 1973. Though, the amendment has not been carried to date in wake of opposition from Left parties and trade unions and was used by the UPA govt as a pretext to continue with the policy of allocation of captive blocks in non-transparent manner!! (More on it later) It can only be left to imagination of what would be the extent of scam in the backdrop of magnitude, which the country witnessed only for captive allocation of coal blocks, if amendment seeking commercial exploitation of coal by private companies would have carried the day. 

Undue benefits through primitive accumulation

CAG in its recently tabled report in Parliament on, ‘Performance Audit on allocation of Coal blocks and augmentation of Coal Production’ has revealed that non-transparent procedures adopted in allocations of captive coal blocks due to lack of competitive bidding has resulted in undue benefit to the tune of staggering Rs 1.86 lakh Crore to the private corporations. How these gains were made possible? It was very much similar to 2G scam where corporate-political nexus worked in a way that made possible the looting of natural resources of the country to allow private parties to reap the benefit in form of windfall gains by transferring precious natural resources to them at dirty cheap prices. Some may argue that it was case of crony capitalism but more than this, it was sophisticated form of ‘Primitive accumulation’ in which all checks of the even bourgeois parliamentary democracy was given a go by to effect direct transfer of natural scarce resources, supposed to be owned collectively by the people of the country through the instrumentality of state, to private corporate interests for hefty gains.

Delaying action on decision to avoid competitive bidding

The scam was perpetuated in a way that government even went on delaying action on its own decision of June 28, 2004 to move ahead with competitive bidding for allocating captive coal blocks in numerous ways. With rumours doing the round in 2004 that change in policy for allocation of captive coal blocks would be effected soon there was mad rush to corner the mines among the corporate within existing beneficial policy framework. Another major reason for rush was substantial rise in price of coal in international market (because of spurt in demand from China) during the period from $ 25-30 per tonne in 2004 to S 180 in July, 2008 opening up the possibility of windfall gains further. At present, it has been settled around the range of $ 100-105 per tonne. Within period of 2004-09 as per CAG report as much as 142 coal blocks was allotted out of which 75 went to private parties. The rush can be understood from the fact that there were only 39 blocks in total that stood allocated as on June, 2004 in all past years.

Rational for competitive bidding

The existing policy which was sought to be changed, which never materialized, was the prevailing method to allocate mines through ‘Inter-Ministerial Screening Committee’ set up through administrative order by then Congress govt headed by Narshima rao in 1992. It is amply clear from the series of documents relied upon by CAG in its report that the PMO repeatedly rejected the explicit recommendation of Secretary (Coal) to shift to the system of competitive bidding as the prevailing system lacked ‘transparency and objectivity’ and results in different kinds of pulls and pressures experienced by the Screening Committee during the selection process.  He also in a way indicated the reason for such pull and pressure when he observed in 2004 note itself on the issue that there was a “substantial difference between the price of coal supplied by Coal India Limited and the cost of coal produced through captive mining,” resulting in a “windfall gain to the party who was allocated a captive block.”  These piece of advice was never followed and Secretary (Coal) stand was later vindicated when CAG report itself observed that there was no transparency in the procedures followed by screening committee as the minutes of the committee failed to record the detailed reasons and rationale for allocation of captive coal blocks to particular private applicant. The Secretary (Coal) stand that allocation under present method would only result in windfall gains to ‘private beneficiaries’ in all likelihood was also proved to be correct as CAG report noted, “Delay in introduction of process of competitive bidding has rendered the existing process beneficial to a large number of private companies as had been observed by then Secretary (Coal) in June, 2004 itself”. As we have already seen the deliberate delay by the govt to effect change in existing policy, in one pretext or the other, for full seven years as resulted in undue gains to private companies of whopping Rs 1.86 lakh Crore.

Pretext for delay

Most relied upon argument to delay the change in policy was that Coal Mines (Nationalisation) Act, 1973 and Mines and Minerals (Development and Regulation) Act, 1957 need to be amended before the shift to competitive bidding could be done. It was so even when Ministry for Law and Justice clearly spelt out in 2006 that there was “no legal impediment” in making the shift without amending the laws as the existing mechanism too has come in existence through administrative order. Prime Minister in his recent statement in parliament on coal scam is now arguing that, “In any case, in a democracy, it is difficult to accept the notion that a decision of the Government to seek legislative amendment to implement a change in policy should come for adverse audit scrutiny.” And reading the argument one remain stuck whether in a democracy the delay in amending the law can be utilized to transfer control of natural resources through existing policy, the limitations of which a senior rank officer is continuously pointing out, and especially when the rate of allocation is rising at an alarming rate from 3-4 blocks per year earlier to 53 coal blocks in 2006, 52 in 2007, 24 in 2008 and 19 in 2009 sufficient to raise eyebrow of any reasonable man with clean intention that something is fishy. 

Flawed argument behind allotting captive blocks

It is to be understood that whenever there is transfer of  resources an element of loss in long run would always accrue to govt due to shift of command and control of ‘stock’ of  natural reserves to private companies. It’s true that allocation through competitive bidding can make the process more fair and transparent but it too can never recover the whole loss inherent in the process of transfer from public control to private control. The point would be further clear when one reads observation in CAG report that, “A part of this financial gain (windfall profit accruing to private companies) could have been tapped by the government by taking timely decision on competitive bidding of allocation of coal blocks.” Thus only a ‘part’ can be recouped by the process of competitive bidding. This is for the simple reason that private companies would only exploit natural reserves in a way that can satisfy their ‘profit’ motive. The govt. only facilitated this profiteering when it allowed Reliance Power’s ultra mega projects (UMPPs) at Sasan and Tilaiya (dealt separately in another CAG report as they were allocated through tariff based competitive route) to divert surplus coal from its two captive mines post-facto violating bid guidelines by changing rules of game which resulted in “undue benefits” of Rs 15,489 Crore. Similar benefits accrued to Tata-Sasol combine and Jindal Steel and Power for ‘Ccoal to L liquid’ project in Orissa of Rs 33,060 Crore and Rs 21,226 Crore respectively. 

The possibility of allocating coal mines for captive purpose for specified end use was opened up in 1993 through amendment to Coal Mines (Nationalisation) Act, 1993. The rationale given for same was that public sector company, Coal India Limited is not in a position to augment supply of coal to keep with the growing demand. It can be anybody guess that why instead of augmenting the capacity of CIL by streamlining its operations, govt. seek to transfer the stock and control of precious natural resources through captive route in pretext of ensuring supplies of coal to them. It could have also been done through dedicated ‘supply contract’ by such industries with CIL. Even specified mines could have possibly been dedicated for the purpose where extraction could continue to be done by CIL as earlier. This would have served the purpose and it wouldn’t have resulted in cornering of mines by private companies in such dubious ways as brought out by CAG report on captive coal block allocation. The argument that it would augment production in leaps too didn’t hold ground when one looks at the fact that out of 86 captive coal blocks with targeted coal production of 73 million tonnes, which were scheduled to start production in XI plan period (up to 2010-11), only 28 coal blocks (including 15 in private sector) started production as of March, 31 2011. They produced only 34 million tonne coal during 2010-11, 52.55 percent short of the target. Private sector captive coal mines allotted in the concerned period accounts for less than 5 percent of total coal production but has been able to corner more than 15 percent of proven reserve of 1,13,407 million tonne in the country. 

If one analyses these facts the haste shown in allocating coal blocks for the presumed reason of augmenting production of coal doesn’t hold water but it has certainly succeeded in effecting more than proportionate permanent transfer of natural reserves for future profiteering by corporate beneficiaries!

Another rational that is often offered by govt. circles is that in case coal blocks would have been up for competitive bidding for revenue maximization it would have increase the prices of end products like steel, power, cement etc. and thus wouldn’t be in the interest of consumers. In a market based system for determining prices this argument belies economic logic as the prevailing prices of end products are governed by demand and supply situation and not essentially input costs. There is no basis available to govt to claim that the private companies who benefited out of allocation of coal blocks have passed on the benefit to the consumers and the claim can only be said to be based on hypothetical premises. Moreover many private power companies are operating as ‘Independent Power Producers’ selling power in short term market at exorbitant prices of Rs 10-12 per unit. The Competition Commission of India has in June, 2012 slapped a fine of Rs 6,307 crore on 11 leading cement companies such as ACC, Ambuja Cements, Ultratech and Jaypee Cements for price cartelisation. Such facts go contrary to the government’s logic that the supply of cheap coal to sectors like cement and steel has benefited the end consumer.

Privatization of natural resources antithetical to national interest

The whole rational for not allowing privatization of ownership of natural resources either through competitive bidding or captive route is based on the premise that former method may succeed in recouping some loss to the national exchequer (as CAG report points out) but it too fails to retain ownership of public at large through the agency of government over the natural resources of the country. Even the CAG report fall short of pointing this out and anti-corruption crusader ‘Team Anna’ though demanding cancellation of licences and arguing for competitive bidding to transfer natural resources is also not questioning the very rational of transferring natural resources from public to private control inherent in any method of privatization.   The government’s retaining control over coal reserves would have enabled it to determine how and at what rate it should be exploited according to the requirement in any given period. Handing over captive coal blocks for private benefit implies that they would produce at the time when their ‘profit motive’ is best satisfied depending on the exigencies of the market which is increasingly governed as per global situation under contemporary times. This would be so even when the country is facing coal shortage.  Thus what is to be challenged by any genuine anti-corruption movement is the very rational of privatization of ownership of natural resources as the emerging massive scams have their underlying roots inherent in this process.  

PM unconvincing arguments and ‘Zero loss’

Prime Minister in his statement to the parliament argued that the quantum of loss is disputable. Prime Minister and senior cabinet ministers earlier too have attacked constitutional office of CAG basing them largely on the argument that quantum of presumptive loss to national exchequer is disputable or else the CAG is crossing his mandate by opining on policy issue. The double speak of leaders of BJP, who are now pretending to be great defender of constitutional authority of CAG, for scoring some political brownie points over Congress, were equally culpable for undermining the authority of CAG when the body exposed financial irregularities during NDA regime. About the CAG report on the Centaur Hotel divestment in February 2004,Arun Shourie, then minister for disinvestment, had said, “...the methodology of computing national losses is idiotic, sorry peculiar”. In 2001, when the CAG report on coffin purchases came out, Jaitley had said,“The CAG is an institution appointed to find faults.” And then defence minister George Fernandes had added that “CAG has acted unethically”  It is true that someone can argue on the methodology adapted to measure loss to national exchequer but this doesn’t mean there was no loss or undue gains to private parties as PM himself treaded carefully not to use discredited ‘Zero Loss’ theory. But still to target CAG report on this ground is basically indirectly questioning the very rational of the audit itself. This is because the very nature of any audit is such that it involves comparison with hypothetical desired situation to actual events resulting in a situation where conclusions are necessarily based on some reasonable presumption and available facts. Minister of Finance P. Chidambaram though shamelessly argued earlier of ‘zero loss’ on account of the fact that coal has not been mined till date. It would suffice to remind him about 2G scam when supreme court intervened to cancel 122 spectrum licences which is now being put on auction by the govt at the ‘reserved price’ which is more than what has been utilized at that time by the CAG to calculate presumptive loss on account of allocation of 2G licences. One can only hope that govt doesn’t wait for the apex court to again intervene in the matter of captive coal block allocation on lines of 2G judgement and respond to the popular demand of the people of the country to cancel licence of captive coal blocks allotted in non-transparent manner with immediate effect so that loss to the nation can be restricted to ‘zero loss’ through recouping already sustained losses from private beneficiaries. Thus cancellation of licences only seems to be the way out to upheld ‘Zero loss’ theory and reasoning behind it as captive coal mines with private companies would only result in coal being mined in some future time causing loss to the nation even as per Chidambaram argument, if extended logically to its conclusion!!