Coal scam offers telling insight of India's politico-money nexus: NYT
The coal allocation scam in India appears to have a offered a telling insight into the nexus between politics and money.
According to a New York Times analysis, unlike other sectors of the economy, natural resources like coal remain tightly controlled by politicians and bureaucrats.
The paper quotes former Supreme Court judge Santosh Hegde, as saying that "Today in India, politicians are so powerful, that all together, they are looting the country."
The example of Manoj Jayaswal is too stark to ignore. His rivals even today are trying to find out how he got rich so fast.
The answer is not too hard to find - He is joined at the hip with powerful politicians. He hosted them at lavish parties, entertained them at his daughter's opulent Thai wedding and stood among them at India's presidential palace, where a year ago he was praised as a leader in the India growth story.
Now, Jayaswal is embroiled in a USD 34 billion coal mining scandal that has exposed the ugly underside of Indian politics and economic life.
According to the NYT, it is a brazen style of crony capitalism that has enabled politicians and their friends to reap huge profits by gaining control of vast swaths of the country's natural resources, often for nothing.
The opaque government allotment process has enabled well-connected businessmen and politicians to obtain rights to undeveloped coal fields.
The NYT says that investigators are now looking at whether Jayaswal and Vijay Darda, a Member of Parliament, conspired to fraudulently obtain five lucrative coal allocations.
Naveen Jindal, another lawmaker and one of India's richest industrialists, is also reportedly under investigation.
Public anger over rising official graft and the state of the economy is high, and now the government appears to be on the defensive.
Over the last couple of months, there has been a sort of political dysfunction, but this is hardly new in India.
Analysts say India can no longer afford a government that so flagrantly fails to deliver what it promises.
A government decision to allow foreign direct investment in multi-brand retail and to hike the price of diesel, besides rationing the issue of liquefied petroleum gas or cooking gas to six cylinders per year, is being seen as a desperate effort to shore up a faltering economy.
However, not being able to produce enough power has absolutely been the single biggest bottleneck for economic growth, the NYT quoted Praveen Chakravarty, chief executive of Mumbai-based Anand Rathi Financial Services, as saying.
India is trying to expand cleaner energy sources but still depends on coal for roughly 57 percent of its electricity.