A government concerned about deficits, a depreciated rupee and muted investor sentiment was quick to voice its concern about the counter-productiveness of such apparent witch-hunting. Information & broadcasting minister Manish Tiwari, among the first ministers to speak on the issue on Wednesday, told ET: "Alleged criminal culpability of leaders of corporate India should be juxtaposed with implications it has on investment growth and overall business climate given the corrosive nature of our public discourse."
Industry minister Anand Sharma told ET: "We have to make a distinction between bonafide and malafide decisions; a bureaucrat or a minister cannot be hauled up without examining the complexity of policy-making. We cannot label every one with the same tag of corruption."
The question then, of course, is that if not India Inc then who should carry the can? And it's then that a can of worm unravels that inevitably poses uncomfortable questions to a government that's been plagued with corruption charges, many of which lead all the way to the prime minister's office (see PMO and Coalgate).
On Saturday, the PMO put out a statement saying that the final decision on the allocation of the Talabira coal block (the one awarded to a JV of Hindalco and two PSU joint venture partners), which differed from the earlier recommendation of the Screening Committee, was taken following a representation received in the PMO "from one of the parties, which was referred to the ministry of coal". "The prime minister is satisfied that the final decision taken in this regard was entirely appropriate..."
PMO AND COALGATEAs minister in charge of coal for around five years in UPA's two regimes, the PM came under attack once the coal scam surfaced.
What PM could have done
According to the CAG, competitive bidding could have been introduced in 2006 by amending the existing administrative instructions.
The PM's counter (In Parliament)
A meeting was convened in the PMO on July 25, 2005, which was attended by representatives of coal and lignite bearing states in which representatives of state governments were opposed to the proposed switchover to competitive bidding. Legislative changes that would be required for the proposed change would require considerable time.
Therefore, it was decided to continue with the allocation of coal blocks through the screening committee procedure. It was only in August 2006 that the Department of Legal Affairs opined that competitive bidding could be introduced through administrative instructions. However, the Department also opined that legislative amendments would be required.
The tough questions
Were there pulls and pushes from all quarters to help private companies get coal blocks?
Did the Congress party put pressure through the PMO to hand over coal blocks to A, B or C?
When state governments, including those ruled by the BJP, urged the Centre not to go for bidding, did they represent a particular corporate entity?
Why some of these questions may have no answers:
Parakh may have had some of the answers but by making him an accused, Parakh as a potential witness has been neutralised as the version of an accused has no standing in court.
TRYING TO CLEAN ITS SLATE
The UPA for its part has been making all efforts to shrug off scandals that have erupted in its second stint in government. The two biggest ones were courtesy former Comptroller and Auditor General of India (CAG) Vinod Rai, whose reports on 2G spectrum and coal blocks allocation squarely blamed the government for losses of billions of dollars for misallocation of spectrum and for windfall gains to those allocated coal blocks in an arbitrary manner. But the more it attempts to deflect the attention of such scandals, the more does it backfire in spectacular fashion.
The former coal secretary Parakh ensured the rebound was magnified when he told reporters that if he is accused for recommending Hindalco in 2005, shouldn't the PM who was the final approver as coal minister then, also be in the same boat?
That was the cue for the Opposition and even a couple of coalition partners to rush in for the kill. Their ire was directed at the two weakest points of the UPA: a prime minister who hasn't been able to do enough to curtail the corruption that has dogged his government, thereby making him appear an accomplice; and a government that seems to be clueless about the rampage on which the national investigative agency has embarked upon.
"The week-long developments show how the government is not in control of anything. That cluelessness stems from the top," says a coalition partner who is a member of parliament and who did not want to be named. The CBI for its part has taken its cue from the Supreme Court, which recently directed the agency to stop being a "caged parrot" and to stop listening to its "master's voice".
CBI ON A SHAKY GROUND?
The CBI would have used the court's directive to free itself from apparent interference into its investigations into Coalgate. To be sure, CBI director Ranjit Sinha thundered to the press that he had "evidence" on Parakh - that it was Parakh who overturned a screening committee's decision and allotted coal blocks to Hindalco. "This is a Supreme Court-monitored investigation and we are going by the rulebook." CBI officials on condition of anonymity have said the documentary evidence against Parakh includes notings on files by officials of the coal ministry who had objected to Parakh's decision.
Sinha, however, didn't appear to have much support from the government, although most spokespersons and ministers ET Magazine spoke to did make it a point to note that they were "all for transparency and action against corruption". But they did drive home the point that the CBI may be on shaky ground. Corporate affairs minister Sachin Pilot said caution should be taken that such actions are based on hard facts and do not create an atmosphere of fear and uncertainty.
To be sure, legal experts who read the FIR wonder privately why the CBI was trigger-happy in naming Birla and Parakh, and not the "competent authority" in the FIR. After all it was this authority that first agreed to the screening committee's recommendation to reject Hindalco, and subsequently approved the coal secretary's decision to allot Hindalco a coal block(thereby ignoring the screening committee's recommendation).
"We had named Jindal and we had to follow the same rule in this case. We will name all owners in future FIRs too," a senior CBI official told ET Magazine, although he did admit that the agency desisted from naming the PMO and referred to it as the competent authority at this stage to avoid controversy. "It was not necessary to name the competent authority at the FIR stage," he added.
Legal experts point out that with Parakh saying that it was the PM (as coal minister) who took the final decision, it's clear who the competent authority is. And if the CBI is to be believed that it is still early days to name that authority, it may do so when the investigation proceeds beyond the FIR stage.
In any case, naming the competent authority matters little, now that the PMO has come out in the open and declared that it approved the allocation of the coal block.
Conspiracy theorists point out that the reason to bring in an industrialist from "below the radar" into the probe is to scuttle it, and ensure that everybody - politicians, bureaucrats, industrialists - go scot-free.
Making Parakh an accused also helps this endeavour as it neutralises him as a potential witness. Perhaps it would be pragmatic this time around to heed senior Congress leader Digvijay Singh when he says the "witch hunting" should stop at a time when the country is forced to import coal to feed its thermal power stations.