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Opinion » Editorial

Blow for public integrity

The Supreme Court verdict holding coal block allocations made since 1993 illegal confirms a long-known, butlittle-acknowledged malaise pervading the administration: cronyism often overshadowing merit, and systemsand processes being undermined by power and influence. The sweeping nature of the finding that allocationof coal blocks through the government dispensation route as well as through a non-statutory ‘screeningcommittee’ suffered from arbitrariness is a fierce indictment of successive governments, rendering it difficultto apportion blame on any particular party or regime. Rather, as the judgment points out, the approach wasad hoc and casual. There was no fair and transparent procedure, and this resulted in unfair distribution ofnational wealth. The judgment, in essence, sticks to the constitutional norms the Supreme Court has beenapplying since the time it cancelled 122 telecom licences in 2012 based on the finding that illegal allocation of2G spectrum had been made. Of course, a Constitution Bench has now calibrated the law that once tended tomake competitive auction the sole basis for the exploitation of natural resources, and given some policyleeway to the government to adopt alternative methods, subject to constitutional principles being adhered to.The court will deliberate on the consequences of its findings in further hearings, but it has already sent out aclear message that it will no more countenance arbitrary and illegal allocation of natural resources.

Political parties may seek to blame one another, and industry may count its losses and lament the verdict’simpact on the cost and availability of power and the cost of importing or transporting coal. Some may fretover the viability of existing projects and the fate of investments already made. They may calculate the impacton financial firms with exposure to this sector. All these factors will now be weighed by the Court when it sitsagain to decide whether to cancel the allocations or find a just alternative. It has clarified that its verdict willnot touch ongoing probes by the Central Bureau of Investigation and the Enforcement Directorate intoillegalities committed in the allocation of coal blocks. The judgment also exempts 12 coal blocks linked toUltra-mega Power Projects that were allotted on the basis of competitive bidding. Those who consider thepublic interest paramount and are concerned about good governance and the integrity of institutions willdoubtless welcome this judgment. The tasks that remain are, first, to disgorge the windfall gains made by theplayers in the scam; second, to save the mining and power sectors from the consequences of the illegalallocations; and third, to bring to book those guilty of criminal conduct.

Keywords: coal block allocations, Supreme Court verdict, coal scam, coalgate scam, telecomlicences, Constitution Bench