Vivek Kaul
Digvijay Singh, currently one of the powerful general secretaries in the Congress party, was born in February 1947. Given this he must have been in his late teens when the Yash Chopra directed multi-starrer Waqt released in 1965.
While I am not sure whether Singh is a movie buff or not, chances are he might have seen the movie. We all do when we are in our teens.
There are two things from Waqt that have survived the test of times. One is the qawali “ae meri zohra jabeen” sung by Manna De, set to tune by Ravi, and written by the great Sahir Ludhianvi.
Another is a dialogue written by Akhtar-Ul-Iman and spoken by Raj Kumar in the movie, which goes like this: “Chinoi Seth…jinke apne ghar sheeshe ke hon wo dusron par pathar nahi feka karte (Chinoi Seth…those who live in glass houses don’t throw stones at others).”
If Digvijay Singh hasn’t seen this movie its time he did. If watching a 206 minute long movie doesn’t fit into his scheme of things, he can at least watch this 18 second YouTube clip, to realise that those who live in glass houses don’t throw stones at others.
Singh has accused Narendra Modi of being well trained by the Rashtriya Swayemsevak Sangh (RSS) in the “Nazi tradition” of false propaganda. He tweeted twice on this to say:
1. “Sangh trains it’s cadre in disinformation campaign. Obviously Modi has been trained well! Sangh has modeled itself in the Nazi tradition.”
2. “Sangh training to its cadre. Jhoot bolo zor se bolo aur baar baar bolo (Tell a lie, tell it loudly and tell it hundred times). Doesn’t it remind you of Hitler’s Goebbels?”
These tweets came after Narendra Modi accused the government of having spent Rs 1880 crore in the treatment of Sonia Gandhi’s mysterious illness. Modi claimed to have got this number from a media report.
Singh has compared Modi to Paul Joseph Goebbels who was a German politician and Adolf Hitler’s Minister of Propaganda in Nazi Germany. There is no denying that Modi might be wrong with his Rs 1880 crore claim but the fact of the matter is that the Congress leaders including Digvijay Singh have been doing the same thing that they have just accused Modi of i.e. false propaganda, over and over again.
Let’s take a look at something that Digvijay Singh said in the context of the coalgate scam sometime back. “The way the CAG is going, it is clear he (i.e. Vinod Rai) has political ambitions like TN Chaturvedi (a former CAG who later joined the BJP). He has been giving notional and fictional figures that have no relevance to facts. How has he computed these figures? He is talking through his hat,” said Singh.
The CAG put the losses due to the government giving away coal blocks for free at Rs 1,86,000 crore. Singh would like us to believe that the figures put out by the CAG were notional and fictional and had no relevance to facts. As I explain here it was Singh and not the CAG who was talking through his hat.
Singh’s esteemed colleague, the finance minister P Chidambaram, also tried to tell the nation that there had been no loss in coalgate. “If coal is not mined, where is the loss? The loss will only occur if coal is sold at a certain price or undervalued,” said Chidambaram.
The union Finance Minister wanted us to believe that since almost all companies which got free coal blocks have not started to mine coal till date, hence there have been no losses. This is like saying that I gave away my house for free, but since the person I gave it away to is not able to sell it, hence I did not face any losses.
Chidambaram was basically trying to confuse us by mixing two issues here. One is the fact that the government gave away the blocks for free. And another is the inability of the companies who got these blocks to start mining coal. Just because these companies haven’t been able to mine coal doesn’t mean that the government of India did not face a loss by giving away the mines for free. (You can read the complete argument here).
Kapil Sibal the union telecom minister wanted us to believe that the government hadn’t faced any losses by giving away licenses to telecom companies on a first come first serve basis rather than auctioning them. The CAG had put these losses on account of this at Rs 1,76,000 crore. What these examples clearly bring out is that Congress leaders like Digvijay Singh are indulging in false propaganda of the worst kind, something they have just accused Narendra Modi of.
Another interesting point is that there can be a clear difference of opinion when it comes to the losses suffered by the government on account of coalgate. The assumptions that CAG worked with put the losses at Rs 1,86,000 crore. As I showed in an earlier piece with some more aggressive assumptions the losses could have even shown to be at Rs Rs 13.5 lakh crore (You can read about it here).
But there can be no such variation when it comes to the amount of money that the government has been spending on the treatment of Sonia Gandhi’s illness (if at all it has). A very simple way to puncture Narendra Modi’s argument is to just tell the nation, how much money has really been spent.
Modi claims that the government has spent around Rs 1880 crore or around $356 million on Sonia Gandhi’s illness. That’s a lot of money. If that is not the right amount, what is the right amount? All it needs is a simple clarification from the government.
And that hasn’t come. What has come is a comment that accuses Modi being a Nazi. As an earlier piece on this website pointed out that there is an RTI application pending before the UPA government asking for details of her visits, the amounts spent and for what purposes. What Singh’s comment also shows is that the Congress doesn’t know how to tackle Modi in Gujarat. Sonia Gandhi in 2007 had labeled him maut ka saudagar. Singh has now labeled him a Nazi. By trying to tarnish Modi’s image the Congress is only helping Brand Modi become much stronger at least in Gujarat. And that can’t be clearly good for a party which claims to be secular.
The article originally appeared on www.firstpost.com on October 3, 2012. http://www.firstpost.com/politics/if-modi-is-goebbels-what-does-that-make-digvijaya-477800.html
(Vivek Kaul is a writer. He can be reached at [email protected])
Digvijaya Singh
CAG was over-conservative in its Rs 1,86,000 cr loss number
Vivek Kaul
The Congress party seems to be hell bent on discrediting Vinod Rai, the Comptroller and Auditor General(CAG) of India, who has put the estimate of the losses on account of coal-gate at Rs 1.86 lakh crore.
The latest Congress politician to join the “pull Rai down” bandwagon is Digvijaya Singh.
Singh told The Indian Express that “the way the CAG is going, it is clear he(i.e. Vinod Rai) has political ambitions like TN Chaturvedi (a former CAG who later joined the BJP). He has been giving notional and fictional figures that have no relevance to facts. How has he computed these figures? He is talking through his hat.”
Let’s try and understand why what Singh said is nonsense of the highest order and anyone who has read the CAG report wouldn’t say anything that was as remarkably stupid as this. But before I do that let me just summarise the coalgate issue first.
Between 1993 and 2011, the government of India gave away 206 coal blocks for free to government and private sector companies. The idea being that Coal India Ltd wasn’t producing enough coal to meet the growing energy needs of the nation. So free coal blocks were given away so that other companies could produce coal to meet their own coal needs.
Of these blocks given away for free, 165 blocks were given away free between 2004 and 2011. The Congress led United Progressive Alliance(UPA) has been in power since May 2004. Hence, 80% of the coal blocks have been given away for free during the reign of the Congress led UPA government.
This explains to a large extent why the Congress leaders are trying to discredit the CAG. Before Digvijaya Singh, the Prime Minister Manmohan Singh broke his silence for once, and said that the CAG report could be questioned on a number of technical points. The finance minister P Chidambaram said there had been no losses because of free coal blocks allocations and then denied making the statement a little later.
The CAG report on the coalgate scam explains in great detail the method they have used to arrive at a loss figure of Rs 1.86 lakh crore. Hence Singh’s question “how has he computed these figures?” is sheer rhetoric and nothing else.
As is the case with any estimate the CAG made a number of assumptions (for those who have a problem with this, even the government’s annual budget is an estimate which is replaced by a revised estimate a year later, and the actual number two years later). The CAG started with the assumption that the coal mined out of the coal blocks has been given away for free. This coal could be sold at a certain price. Since the government gave away the blocks for free, it let go of that opportunity. And this loss to the nation, the CAG has tried to quantify in terms of rupees, in its report.
There were other assumptions that were made as well. Only the coal blocks given out to private companies were taken into account while calculating losses. Blocks given to government companies were ignored. Personally, I would have liked CAG to take the government companies into account as well while calculating the losses, because a loss is a loss at the end of the day. Also, transactions happen between various sections of the government all the time and the money earned on account of these transactions is taken into account. So should the losses. Out of the 165 blocks allocated since 2004, 83, or around half were allocated to government owned companies.
The amount of coal in a block is referred to as the geological reserve. The portion that can be mined is referred to as the extractable reserve. The CAG calculated extractable reserves of the private coal blocks to be around 6282.5million tonnes. This is the amount of coal that could have been sold.
The second part of the calculation was arriving at a price at which this coal could have been sold. For this the CAG looked at the prices at which Coal India, which produces 80% of India’s coal, sells its various grades of coal. Using these prices it arrived at an average price of Rs 1028.42 per tonne of coal. Obviously there is a cost involved in producing this coal as well. The average cost of production came to Rs 583.01 per tonne. Other than this a financing cost of Rs 150 per tonne was also taken into account.
This meant a profit of Rs 295.41 per tonne of coal (Rs 1028.42 – Rs 583.01 – Rs 150). Hence the government had lost Rs295.41 for every tonne of coal that it gave away for free. Hence, the losses were estimated to be at Rs 1,85,591.33 crore (Rs 295.41 x 6282.5 million tonnes).
This brings me back to Digvijaya Singh. “He has been giving notional and fictional figures that have no relevance to facts,” a part of his statement said. The numbers are not fictional at all. They are backed by hardcore data. If you don’t use the numbers of Coal India, a company which produces 80% of the coal in India, whose numbers do you use? That is a question that Singh should answer.
Also, the price at which Coal India sells coal to companies it has an agreement with, is the lowest in the market. It is not linked to the international price of coal. The price of coal that is auctioned by Coal India is much higher than its normal price. As the CAG points out in its report on the ultra mega power project, the average price of coal sold by Coal India through e-auction in 2010-2011 was Rs 1782 per tonne. The average price of imported coal in November 2009 was Rs 2874 per tonne (calculated by the CAG based on NTPC data). The CAG did not take into account these prices. It took into account the lowest price of Rs 1028.42 per tonne, which was the average Coal India price.
Let’s run some numbers to try and understand what kind of losses CAG could have come up with if it wanted to. At a price of Rs 1,782, the profit per tonne would have been Rs 1050 (Rs 1782-Rs 583.01- Rs 150). If this number had been used the losses would have amounted to Rs6.6lakh crore.
At a price of Rs 2874 per tonne, the profit per tonne would have been Rs 2142(Rs 2874 – Rs 583.01 – Rs 150). If this number had been used the losses would have been Rs 13.5lakh crore. This number is a little more than the Rs 13.18 lakh crore expenditure that the government of India incurred in 2011-2012.
Even a weighted average price of these three prices would have implied a loss of Rs 7.3lakh crore. And this when the coal blocks given to government companies haven’t been taken into account at all.
So the point is that the CAG like a good accountant has worked with very conservative estimates and come up with a loss of Rs1.86 lakh crore. It could have easily come up with substantially bigger numbers as I just showed.
Now coming to the final charge of Vinod Rai having political ambitions. “The way the CAG is going, it is clear he(i.e. Vinod Rai) has political ambitions like TN Chaturvedi (a former CAG who later joined the BJP),” said Singh. Well just because one former CAG joined politics does not mean that every other CAG will follow him.
Singh should well remember the old English adage: “one swallow does not a summer make”.
(The article originally appeared on www.firstpost.com on September 1,2012. http://www.firstpost.com/business/cag-was-over-conservative-in-its-rs-186000-cr-loss-number-439355.html)
(Vivek Kaul is a writer and can be reached at [email protected])