While want to whip? Try the public sector

It is believed that panacea for removing all inefficiency is privatization. This touching faith has made many of us to accept unquestioningly that the state-owned companies are inefficient while we wink at the failures of private sector. This bias is most pronounced when one talks of the mineral sector in general and coal in particular.

Coal India Limited, the Navratna coal giant, is a favourite whipping boy of the critics for failure to deliver enough coal for power generation. Forgotten in the process is the fact that so far out of 213 coal blocks allocated to different companies, only 25 have commenced operation. Yet the critics of CIL point a finger against the national coal company for failure to mine enough coal. But the statistics say something different. In its recent performance review, the coal ministry noted that CIL produced 295.52 million tonnes of raw coal during April-December for the fiscal 2009-10, which was 19.77 MTs, more than the production achieved during the same period in 2008-09, registering a growth of 7.2 per cent. The all-India coal production had improved to 492.95 million tonnes in 2008-09 from 457.08 MT in 2007-08, thus up by 7.8 per cent over the previous year. According to the Provisional Coal Statistics, out of about 36 MT increase in production, CIL and SCCL contributed 24 MT and 4 MT respectively, only rest 8 MT came from captive blocks.

The other important point many fail to note is that coal can be imported under Open General License (OGL). In fact NTPC, a major state-owned power producer routinely places order for import of coal through STC or MMTC. Curiously, only one major company managed to win the tender year after year. More curiously when the most-favoured-importer finds the coal prices abroad going against the tendered quote NTPC keep claiming availability of surplus coal stock at its generation stations. But such aberrations or say collusions to help private sector in creating wealth find no disfavour among the critics.

How biased is the view can be gauged from a recent comment in one of the nation’s newspapers. The writer took umbrage at CIL lowering its output target for year 2012. It linked the target lowering, that too one year later, with the current shortage of coal at the power utilities and argued strongly in favour of privatization. There was no effort to introspect how a possible future target reduction could be a factor for shortage today. Or if there had been increase in production by CIL in the current year. More important if there had been any slippage in import tender floated for NTPC and why? When just 25 out of 213 coal blocks commence production and blame the delay on the environmental and other procedural factors, nobody questions the same. But for CIL and its subsidiaries such delays end up being branded as routine and thus an unacceptable excuse.

Ignored in the process is the law and order problems in the coal mining belt which forced private sector stay away altogether. Naxal violence is least in the regions where state-owned companies operate. But the so-called civil-society refuses to introspect the reason and fails to give credit where it is due. Public sector remains a favourite whipping boy at a time when the private-capitalism has been passing through its ugliest phase even in the land of free market. Curious to say the least!

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