Plan panel lists steps to combat 'crony capitalism'

Admitting that discretionally allocation of natural resources such as coal and spectrum has led to "crony capitalism," the 12th plan document argues for strong measures to combat this.

Updated on: Sep 13, 2012, 23:45:35 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Admitting that discretionally allocation of natural resources such as coal and spectrum has led to "crony capitalism," the 12th plan document argues for strong measures to combat this. The document is likely to be approved by a meeting to be headed by Prime Minister Manmohan Singh on Saturday.

The Planning Commission's forthcoming document has a section on 'combating crony capitalism,' where it discusses the recent controversies surrounding allocation of natural resources.

"The most important area where a re-thinking of policy was necessary related to allocation of natural resources to private companies for commercial exploitation," the section on combating crony capitalism says.

The Comptroller and Auditor General had estimated a loss of Rs. 1,76,00 crore because of non-applicability of auction mechanism for allocation of coal mines.

Justice (retd) MB Shah panel had estimated a loss of Rs. 35,000 to exchequer because of illegal mining of ores in Goa between 2006-2009.

Justice (retd) Santosh Hedge, former Lokayukta of Karnataka had estimated a loss of Rs. 16,085 crore because of illegal mining between 2006 and 2010.

Referring to recent controversies of allocation of resources such as land, mines, and spectrum, the country's top most plan panel said any such allocation for profit-making commercial activity involves some "implicit rent" if the price at which the transfer takes place in not market determined.

"This feeds the suspicion that "crony capitalism" is at work," the document says.

To change the perception, the panel also said the "weak spot" of discretionary allocation of natural resources has been recognized and the government will shift to "transparent auction".

Auction of 3G telecom spectrum has already happened and the panel expects the coal blocks to be allocated through auction in future with the legislative process to bring the change being over.

"It can be said that the policy environment for the 12th plan will be much more transparent," the plan document says.

This is one of the several reform measures the plan panel has suggested in the 12th plan to achieve the average economic growth target of 8.2% between 2012-17, the plan period.

"We have to take lot of quick corrective steps, not only in short-term but also in the medium term," Ahluwalia said, when asked about the growth prospects in the 12th plan.

"It can happen and we have set up a reasonable target of growth of 8.2 % for the period".

Key concerns
Opening of foreign direct investment in multi-brand retail should be allowed soon
Tax-changes introduced in the budget are anti-investor and need to be allayed quickly
Reduce subsidies as percentage of the GDP
Reduce number of Central government scheme and focus on outcome than expenditure.

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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