Karan Thapar: Hello and welcome to Devil's Advocate. How does the government answer the criticism of its response to the CAG's coal allocation report? That's the key issue I shall explore today with Human Resources and Development Minister Kapil Sibal. Mr Sibal, let's start with Mr P Chidambaram's statement that since coal hasn't been mined, there is no loss. I put it to you that it is wrong on two counts.
First, the second the allocations happened, the government lost the right to mine coal that was transferred to the allottees. And second, even on Mr Chidambaram's own terms, the second the mining starts the loss will also begin. So, he is wrong both ways.
Kapil Sibal: Well, I tell you this is a completely wrong way of looking at the issue. See, the loss has been calculated by the CAG on the basis that Coal India, which recovers mineral, incurs a certain cost, it sells that coal to traders. It sells that coal to the power sector or the cement or iron and steel. And it earns a certain profit. And therefore, that profit is the loss to the government because the coal should have, the private entrepreneur, should have paid that amount - the difference between the cost of CIL and the selling.
Karan Thapar: Quite right.
Kapil Sibal: That's the logic of the CAG. Now the logic breaks down because this coal can never be sold because there is a prohibition on sale. And coal can be used as captive consumption for either generating electricity or manufacturing steel or cement. And the loss or gain will be seen at the end of the use.
Karan Thapar: Let me put it like this. Let's not get into what the amount of the loss is or the presumptive loss - that is disputable. I am simply talking about whether there is a loss or not. And I put this to you - there is a clear difference between allotting coal for free which is what happened as opposed to selling it on the basis of auction. And that difference is the loss. Whatever the quantification is, it is different, but a loss took place because the auction didn't happen is crystal clear.
Kapil Sibal: If that logic were right, then it is true of giving away any public asset at a lower price or an institutional price or for free. Whether it is land for a hospital, land for a school, air waves for the telecom sector. If that is the case, the government should be in the business of auctioning everything so that people in this country should pay and so that inflation should be 15 per cent and nobody can afford to live. So, I think this a wrong way to looking at it.
Karan Thapar: Can I explain why in fact the logic of giving away doesn't apply to coal? Because of process was initiated in June 2004, which came to culmination in February 2012 which resulted in a decision that the government would auction coal. And all that CAG is saying is that if you had been auctioning coal from 2004 when you initiated that process, you would have been earning money rather than gifting blocks for free. And that is the money that you did not earn is the presumptive loss. It is crystal clear. Let us not quarrel about the quantity, but that the loss was incurred is crystal clear.
Kapil Sibal: It is completely wrong. I will give you an example. There is a process on in the government today that when land should be given for schools, it should be auctioned. That process is on today. It has been on for the last two years. Yet land has been auctioned. That process is still on. We have not been decided. Now will you say that all auctions in between are a great loss to the government. Because the government should have decided...
Karan Thapar: But the land is being auctioned...
Kapil Sibal: No, no. It is not auctioned. Land is being given at institutional prices.. So..
Karan Thapar: For a moment you said it is being auctioned...
Kapil Sibal: No. It is being given at institutional prices.
Karan Thapar: You meant the opposite?
Kapil Sibal: I meant the opposite. So what is the situation? There is a process on. The government is yet to decide. The land is being given at institutional rates and tomorrow you and CAG will say you have caused loss because you should have actually auctioned it. So therefore this is a..
Karan Thapar: Can I put this to you? I am pausing you for a moment because I want to take you back to Mr Chidambaram's statement which was the starting point. He has a very crystal clear thing to say and I am going to quote him from his clarification so that I have got it right. "If coal is not mined, if coal remains buried in Mother earth, where is the loss?" The corollary is that the second the coal is mined, the loss will start.
Kapil Sibal: Again you are going back. I have a raised a fundamental issue before you. And the fundamental issue is when the coal cannot be sold and is used for captive consumption, the loss or gain will occur when electricity is generated and at a certain tariff. It has not occurred earlier. So therefore there is no loss.
Karan Thapar: I hear that.
Kapil Sibal: So therefore there is no loss.
Karan Thapar: Just a moment. Just a moment. I hear that. The CAG is not talking about the fact that the coal can't be sold by the person who gets the permission but he is saying you should have sold it to the allotee in the first place.
Kapil Sibal: He is completely wrong. He is completely wrong because there was no policy of sale at that time.
Karan Thapar: Alright. That...
Kapil Sibal: There is no question of sale.. And you could not sell...
Karan Thapar: That is the critical issue. Let's move away from Mr Chidambaram's contentious statement about the loss and let's come to the CAG report where one critical issue which affects all the rest of the report is what I want to start by discussing. A process was initiated in June 2004 to sell coal for captive mining purposes by auction. It didn't come into operation till February 2012 and here will be now implemented. That is eight years and the Prime Minister's explanation in his statement for why this process took eight years is a, that the coal ministry gave contradictory advice and b, the states objected. I put it to you that neither of the Prime Minister's explanations hold water.
Kapil Sibal: It is not eight years, it is twelve years. Because the process of actually bringing in competitive biddings started in the year 2000. No, no. Don't interrupt. Please don't interrupt. It started in the year 2000. And for four years the BJP did nothing about it. Then it is the UPA I which initiated a proposal that let's look at competitive bidding and not.. Policy decisions take time. They are not questions that Karan Thapar asks in a jiffy. We don't take any time. Whether the questions are right or wrong.
Karan Thapar: Let's take that on the side...
Kapil Sibal: Policy making takes time.. In 2004, when the process was initiated, consultations took place. They took place within the government of India, it took place between the state chief ministers, letters were written by chief ministers, meetings took place, the state chief ministers opposed it - all the BJP chief ministers opposed it.. Then ultimately in 2006, a reference was made by the law ministry saying that actually you can go ahead..
Karan Thapar: Permit me. Permit me little interruption, because you are saying the process takes time. Actually that's the argument. It didn't need as long as it did. Let me explain. Then you answer. The first point is this - the Law Ministry was in the hands of Mr Hansraj Bhardwaj, one of the most loyal Congressmen. All the Prime Minister had to do was to say to him was Mr Bhardwaj expedite the process. Instead, from the first moment when the Law Ministry was asked for his advice in June 2004, for the first reply Mr Bhardwaj took over two years. That could have been expedited.
Kapil Sibal: That's not true. Please understand a process as to what policy has to be put in place takes time. Always takes time. I mean any policy. DST, Direct Tax Code, GST, policies on land acquisition. I mean how many years has it taken?
Karan Thapar: Just a moment...
Kapil Sibal: Any policy decision takes time, why in federal polity, especially in a Parliament where there is one party does not have majority, you cannot move till a time such everybody is on board.
Karan Thapar: I have heard you repeatedly say it takes time, but I am saying to you in this instance it took time because of weakness on part of the government.
Kapil Sibal: But..
Karan Thapar: Let me finish, then you answer. The reason I believe there was a weakness is that coal is a major mineral. It comes under Central government control. If the states objected as the Prime Minister says they did, you could have over-ruled them. But you didn't.
Kapil Sibal: You are mistaken, you can't over-rule them..
Karan Thapar: Let me just finish and then you answer. On both counts, you could have expedited a Law Ministry under a Congressman, you didn't. You could have over-ruled the states because it's a Central matter, you didn't. Therefore, there was no need to...
Kapil Sibal: Karan, we don't have a majority in the Rajya Sabha. What are you talking about? No bill will pass. What are you talking about? If the BJP chief ministers are not on board, no legislation will pass and history has demonstrated that. Right from 2004 onwards. Therefore, don't say all this. We have to take everybody on board in a situation where we don't majority. As far as Law Ministry is concerned, within one month, they change their opinion. One opinion was given in 2005 in July, they changed it in July 2006.
Karan Thapar: Now just a moment. Let me tell you I agree there was one in July 2006 and changed in August 2006 in a month's period. But they took 25 months' time to give their first opinion.
Kapil Sibal: You are completely wrong. There had consultations that took place. We have letters of BJP chief ministers which said you cannot do this.
Karan Thapar: Wait a minute. Your ministry wasn't consulting BJP chief ministers. The Law Ministry was giving a response in terms of what was the best possible...
Kapil Sibal: How can the Law Ministry response till such time get all the chief ministers on board? What's the point of putting a legislation if all the ministers are not on board?
Karan Thapar: You know what the net result was? The net result is very simple. The Prime Minister wanted to switch to auction he believed it was in greater national interest to do so. For eight years.. Let me finish then you answer...
Kapil Sibal: It is completely wrong.
Karan Thapar: Let me finish...
Kapil Sibal: It is completely wrong.
Karan Thapar: Let me finish. It is a question. How can it be wrong? For eight years he was unable to do so. People say he was either weak and ineffective or he was complicit in the delay. They say there could be no other explanation.
Kapil Sibal: Was the BJP complicit for four years and not doing anything?
Karan Thapar: Let me come to...
Kapil Sibal: No. Why do you say this?
Karan Thapar: Let me come to you.
Kapil Sibal: No. Why do you say let me come to you. Was the BJP complicit for four years? How is the Prime Minister complicit? They are asking for his resignation.
Karan Thapar: When did the BJP start putting a precedent for the Congress? You don't follow the BJP.
Kapil Sibal: I am not saying a precedent.
Karan Thapar: Then why are you trying to justify...
Kapil Sibal: You said complicity as an allegation. I am responding there. Was then prime minister Mr Atal Bihari Vajpayee complicit because he wanted to favour certain people?
Karan Thapar: How do you account for the fact that something is believed to be in the national interest and which the Prime Minister wants to do, does not happen for eight years?
Kapil Sibal: What is believed to be in national interest is done with consultations in a federal polity when everybody is on board.
Karan Thapar: This is not a sign of weakness on part of the Prime Minister?
Kapil Sibal: Not at all sign of weakness. It is the sign of a dysfunctional Parliament, where the BJP is only interested in coming to power and not interested in passing legislations for the good of the country.
Karan Thapar: Is this not a sign of a dysfunctional government that knows something is in the greater national interest and the Prime Minister keeps delaying it...
Kapil Sibal: Not at all. The Prime Minister has blamed nobody. The Prime Minister explained in his statement which is why he wanted a debate in the house. Why is it that the BJP does not want a debate?
Karan Thapar: Doesn't the Prime Minister's statement amount to deflecting the blame either on Opposition or on the Law Ministry or the federal...
Kapil Sibal: Not at all. Not at all. The Prime Minister said I take full responsibility. These are the circumstances. This is what the BJP chief ministers said. They opposed auctioning, they opposed competitive bidding and then ultimately we were able to pass a bill in Parliament in 2010.
Karan Thapar: You know what the BJP turned around and said that he began by accepting full responsibility then steadily deflected on everyone else.
Kapil Sibal: Who said? Who? Who said?
Karan Thapar: Arun Jaitley said so.
Kapil Sibal: Arun Jailtey may say so but you give me an example.
Karan Thapar: When the Prime Minister says his hands were tied by the Opposition...
Kapil Sibal: He never said that…
Karan Thapar: Well, he effectively said so...
Kapil Sibal: Don't say what his statement never said.
Karan Thapar: I am not saying it...
Kapil Sibal: You are saying it..
Karan Thapar: I am speaking in terms of colloquial English.
Kapil Sibal: Okay.
Karan Thapar: Prime Minister was unable to act and he made it pretty clear that state chief ministers objected. I am saying that he could have overruled them.
Kapil Sibal: He couldn't. Because the legislation wouldn't have passed in Parliament. You know that. It's when the state said that you give us the royalty, you give us the taxation, you give us more money and maybe we'll agree, and that took time.
Karan Thapar: Let's then come, because this is a contentious issue so we'll leave the audience to decide whether they find implications in my question or the answers that you have given. Let's come to the second major concern, what did you do in the eight year period…
Kapil Sibal: Again you are talking about the eight year period.
Karan Thapar: I am only talking about when you were in power, what is it that you did when you were in power between 2004 and 2009 when you were prevaricating over auction you went on a coal allocation binge. In the 19 years preceding 2004, only 35 coal allocation had happened, suddenly in five years 142 happened, and the Prime minister's explanation that it was essential for growth, growth otherwise would have stalled, once again doesn't stand true.
Kapil Sibal: Do you know what was the demand of steel in 1993 and what it was in 2008? It was 40 million tons in 2003 and over 70 million tons in 2008. Do you know what the need for the power is today? Today, if you don't have 40 megaton of power annually in the next five years we will not be able to meet the demand. Because of power, because of steal, because of cement, because all this is infrastructure, there was enormous pressure on coal so that power can be generated, so that steel can be generated.
Karan Thapar: Can I stop you there and tell you why that argument doesn't hold good, your own Coal Minister Sri Prakash Jaiswal has publicly admitted that 56 of the 57 allocations made to private companies have not even till today produced any coal. Which clearly means that even if those allocations hadn't been made it would have no impact on economic growth. Therefore the Prime Minister's claim that economic growth would have been held up isn't true.
Kapil Sibal: Either Karan you are naive or you don't want to appreciate the facts. You know, how much time it takes to win coal from a coal mine from any international standard, about 54 months.
Karan Thapar: Can I correct you, that is only true on underground mining if in forest land area.
Kapil Sibal: No there are two issues, there is underground mining, there is 54 months for that.
Karan Thapar: Only forest land area, otherwise it is 48.
Kapil Sibal: Ok, 36 is three years, now how much time does it take to set up a power plant, four and a half years.
Karan Thapar: Can I stop you once again because I want to tell you why that argument doesn't hold true. The truth is of the 57 coal blocks that we are talking about, 33 were allocated between 2004 and 2006. Once again that is the statement given by your Coal Minister which means they were allocated over six years ago. Now bearing in mind the guidelines of the coal ministry, 36 months plus six months for open cast, 48 months plus six months for underground mining; we have acceded that time by over 50 per cent.
Kapil Sibal: Factually incorrect. I'm telling you, you can confirm it from coal ministry. I have got these facts from the coal ministry.
Karan Thapar: So have I.
Kapil Sibal: You know you haven't.
Karan Thapar: I'm simply quoting Shri Prakash Jaiswal.
Kapil Sibal: Because he must have been talking about earlier allocations
Karan Thapar: Shri Prakash Jaiswal made it very clear, it was in the Economic Times.
Kapil Sibal: I am giving you an official figure.
Karan Thapar: There is a difference between you and Jaiswal.
Kapil Sibal: There is no difference. He was talking about earlier allocations.
Karan Thapar: We don't know what he was talking about.
Kapil Sibal: Then if you don't know, don't say there is a difference.
Karan Thapar: You don't know, I am going by the newspaper.
Kapil Sibal: You are going by newspaper; I'm going by official files.
Karan Thapar: Well in this case it is very strange that Mr Jaiswal said one thing to a newspaper
Kapil Sibal: Well, his statement was with respect to earlier allocations which have not been completed.
Karan Thapar: Once again we have reached to a situation, where it seems one minister verses another minister. It clearly looks like that.
Kapil Sibal: No, I am sorry Karan; it seems that you have not got your facts right.
Karan Thapar: Just a moment, I'm quoting Mr Jaiswal.
Kapil Sibal: But you have not asked the question, whether these were 20 blocks that were allocated in September to advertise 2002 for 2005.
Karan Thapar: No just a moment, they were allocated between 2004 and 2006.
Kapil Sibal: There must be previous applications. How do you know?
Karan Thapar: They still have not come on stream, that is the point. Just a moment, and the fact that they have not come on stream means therefore that they weren't sanction for economic development.
Kapil Sibal: You are completely wrong, earlier allocation which have not come on screen has nothing to do with our government. We are talking about the new allocations, and we are with in the time, and those who have not worked; in fact 25 of them have been canceled.
Karan Thapar: Let's come to the final allegation made in the CAG report, that I have time to touch, that the allocations made my the screening committee were done without transparency, they were done without objectivity. The Prime Minister tried to rebut that in his statement by referring to parameters, but I put it to you, that the critical point that is coming out through news reports is that in many instances allocations were made on the recommendations of individual politicians, sometimes without even screening committee going into them and that is a refutation that suggests that there was corruption.
Kapil Sibal: Look, whether there was corruption, no corruption will be decided by the appropriate agency, I'm given to understand that six or seven cases the CBI is looking at these issues. And if the CBI finds any fault surly the law must takes its course.
Karan Thapar: Let's take a particular example, Prakash Javadekar has gone on record to say that he has documentary proof that in February 2008, within 24 hours an allocation was made on the recommendation of Subodh Kant Sahai. This channel, CNN-IBN, showed proof last night, Thursday, on television that the screening committee that decided that allocation had as a member Subodh Kamt Sahai's brother and the allocation was made to a company on behalf of which the same brother received it. And that clearly looks wrong.
Kapil Sibal: Very interesting, you know, this petition on these facts was filed in the Delhi High Court by Prakash industries Ltd, PIL, and a very eminent leader of the BJP was the lawyer in that petition. And these very facts which Prakash Javadekar is now showing on television, this very letter of Subodh Kant Sahai were all in issue in that petition. And the judgment has been rendered that these facts are false, these facts are false, and the High Court has imposed a penalty of Rs 2.5 lakh on the petitioner.
Karan Thapar: What about the second point that I made that CNN-IBN, showed on Thursday night, on television, documents which say Subodh Kant Sahai's brother was the member of the screening committee which allotted a block to a company which received it with Subodh Kamt Sahai's brother signing for it.
Kapil Sibal: All these matters are decided by the court, why don't you read the judgment?
Karan Thapar: This is clear cut corruption.
Kapil Sibal: Why don't you read that judgment, the judgment has rejected it. I circulated that judgment in the press the other day. So again you are bringing facts which judiciary has decided against the petitioner. And who was the lawyer, I don't want to name him but he was saying all allocations were good.
Karan Thapar: Let me end with the key concern that worries people, they say that in fact the allocations that happened between 2004 and 2012, when the governnment was in fact said to be prevaricating over auction, were done in a hurry to circumvent auction. And conveniently they say auctions were delayed, money was made.
Kapil Sibal: These allegations were the BJP, they are preposterous, to say the least, they are irresponsible. The BJP has been trying very hard somehow to destabilise the government. Congress made no money. No Congress minister made any money. You given me any evidence and we will take action. So don't make allegations like this.
Karan Thapar: Alright I will leave you with the last word, time alone with tell what the outcome of the CAG report is, but for now we have run out of time. A pleasure talking to you.
Kapil Sibal: Thank you.