Wednesday, September 12, 2012


Gulzar Natarajan  in Spectrumgate vs Coalgate:
"The competitive pressures created subsequent to the allotment process, by design or otherwise, contained incentive compatibilities that forced the companies to share their excessive gains. 

However, in case of the mining blocks, despite its fundamental similarity with telecom spectrum, the winners have sought to corner all their disproportionate gains. They have, as the Jindals have done, sought to take advantage of the market structure (the freedom  Comptroller and Auditor Generalto sell the power so produced on a merchant power route). Or, as most others have done, they have sought to keep the allotted blocks undeveloped, assured by the belief that they were sitting on potential gold mines. In fact, it is a damning indictment of the whole policy framework that barring a few, most of the mines have been allowed to keep them undeveloped despite being allotted at extremely concessional rates. 

In other words, unlike the telecom spectrum, where market competition and a policy framework kept the spectrum owners honest and thereby forced them to share the benefits arising from low capital costs, the coal block owners were not constrained by any policy framework. "
M.Rajshekhar has several posts on the scam and in this studies the case of EMTA. Meanwhile, the government and the prime minister are attacking the office of the CAG (Comptroller and Audit General):
"The ruling Congress has been defending its action and the prime minster has taken the unprecedented step of making a statement in the House and has observed that the report is flawed and disputable. Charges have been made that the CAG has overstepped his mandate."

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