Lessons from coal

In a rare judgment, a special court of the Central Bureau of Investigation (CBI) has sentenced three former officials of the Union coal ministry to two years in prison for irregularities in the allocation of a coal block in Madhya Pradesh to a private company in 2006-07. One of the officials served as coal secretary from December 2005 to November 2008 and the other two occupied the posts of joint secretary and director at the time the decision was taken. All three officials belonged to the Indian Administrative Service (IAS), a fact that no doubt is responsible for causing some consternation among top civil servants on how the sentencing could adversely affect the morale of the bureaucracy for having taken the rap for a political decision. Such a conclusion is an overreaction. A closer look at the sequence of events that led to the CBI special court’s order on Monday reveals several flaws in the country’s governance practices. Nor can the bureaucracy completely absolve itself from its failure to strictly and meticulously follow the procedures of decision making or stand up to political pressure by ministers to do something that is incorrect.

It is noteworthy that as early as in October 2012 the CBI had filed a first information report to examine charges of irregularities in the allotment of this coal block in Madhya Pradesh to Kamal Sponge Steel and Power. But since no irregularities could be established, it dropped the case. In October 2014, the CBI once again revived the case after a Supreme Court order terminated all coal block allotments to private companies made between 2004 and 2009. Disturbing questions are likely to be raised on why and under whose influence the CBI had earlier stopped the investigation. This is all the more likely since it has now, albeit under a different government, framed charges against the three IAS officers in the same case. To be sure, the CBI special court has conclusively established in its verdict that the officials concerned had neither followed all the procedures for allotment of the coal block nor apprised the then coal minister (Prime Minister Manmohan Singh) of the inadequacies in the application. Nevertheless, the CBI’s actions in 2012 and in 2014 do, once again, underline the need for making the bureau truly independent and free from influences of the ruling political establishment.

For the bureaucracy, the key lesson from the judgment of the CBI special court is that civil servants cannot afford to be negligent about following procedures to arrive at any decision. The application from the Madhya Pradesh company was incomplete in many respects and failed to provide vital information about its financial health. In spite of that, the top civil servants in the coal ministry had processed the application and recommended the allotment of the coal block. The second lesson would be that if there is any political pressure to make concessions or flout norms, the civil servants concerned should always insist on written directives to that effect. Amending laws on prevention of corruption to account for genuine mistakes in decision making can certainly help, but there can be no substitute for not ensuring adherence to procedures or for standing up to political pressure.



Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel