PM wants auctions, coal minister bats against them
Prime Minister Manmohan Singh, we know from both the 2G as well as the coal case, has always been in favour of auctions as a fair and transparent means of allocating scarce natural and other resources. Indeed, his inability to get his way has been the reason for both the CAG and the Opposition’s ire—both the 2G and the Coalgate reports have calculated the losses to the exchequer based on what could have been got had there been an auction.
But what’s happening now is truly unique since the PM’s own Cabinet colleagues are busy challenging the arguments made by him, in full public view. In the 2G case, the government’s defence in both the High Court as well as the Supreme Court has been that not auctioning spectrum would keep its cost low and hence result in low tariffs for phones. This argument was always incorrect and was rejected by the courts several times over, by a single-judge Delhi High Court bench, by a division bench, and even by the Supreme Court—the government recalled its own petition against the Court verdict. You’d think this would have settled the ideological divide on auctions, but not quite it would appear. In the midst of the furore over the CAG report, coal minister Sriprakash Jaiswal has gone on record to say auctioning coal blocks will hike power prices. Apart from there being little evidence of auctions hiking tariffs in other sectors where there is competition, what’s not clear is whether Jaiswal or any other worthy put mechanisms in place to ensure power tariffs, or steel prices for that matter, would be lower when the producer had a captive coal mine given for free. Jaiswal is obviously playing a political game to blunt the BJP, but his argument is hitting at the core of his Prime Minister’s.