The head of a R1.9 lakh crore conglomerate being named in an FIR by the CBI is big news, so it's not surprising that newspapers and television channels have splashed Kumar Mangalam Birla’s name across the front page/television screens ever since the CBI decided to name him in the Coalgate scam. But what is even bigger news is that it is not just Birla, other top industrialists such as Sunil Mittal are also in the CBI’s sights for similar alleged wrongdoings—if Birla is accused of influencing the then coal secretary for giving him 15% rights to a coal mine, Mittal has been accused of getting the then telecom secretary to introduce more liberal norms for getting extra spectrum. Both secretaries, needless to say, have been named by the CBI as part of its investigation into the two industrialists.
Given how there are several other top industrial houses that have been allocated mines without any transparent policy in place, it won’t be surprising if more marquee names are added to the list. When so many top names are in the limelight for the wrong reason, perhaps the problem lies in the policy—would you blame the better-off for mis-declaring their incomes when Indira Gandhi had a 97% marginal rate of taxation?
The specifics of each case are different, but a few broad points can be made even without having the kind of detailed information the CBI must obviously have had before it named the likes of Birla and Mittal in FIRs. In the case of Birla, as has been pointed out, the company’s application for a captive mine had been made way back in 1996—by Indal, which was taken over by Hindalco in 2000. If Birla had anywhere near the clout the CBI suspects he has, it should not have taken him till 2005 to get a license, and that too just a 15% share in a mine supposedly reserved for public sector companies—why a mine should be reserved for the public sector companies given their relative inefficiencies is, however, a separate discussion. And Birla’s clout , or the desire to use it, has to seriously be called into question when you keep in mind the company has got no mining permission till date while the plant for which the group had it allocated for—a R11,000 crore 360,000 tonnes aluminium plant—will be on stream next month. Though the lack of coal spells trouble