Stop Siphoning off money meant for the poor

I am happy that the great Odisha mining loot is finally receiving some media and public attention with the state Government admitting to revenue loss of 70 thousand Crore and counting. Hopefully public pressure will force the Odisha Government to order a multi-agency investigation involving the C.B.I., the Income Tax and the Enforcement Directorate and all the politicians, mine-owners, mining-mafia and Government employees involved in the scam will be prosecuted and their assets frozen. A matter of equally serious concern is the siphoning off development funds meant for the poor by the ruling BJD through a network of Contractors and Control Dealers right under the nose of the Chief Minister. The same acts of omission and commission that facilitated the loot of Odisha’s mineral resources can also be found in the loot of development money; administrative incompetence writ large and poor enforcement.

BJD has built a formidable network of contractors, control dealers and transporters. Through this network, the ruling party is able to siphon off funds from development programs, mainly Central funds, to meet the day-to-day expenses of running the BJD. With a few phone calls BJD leaders can activate this network to transport people to meeting venues, erect impressive arches with cut-outs of Naveen Patnaik, organize food for thousands of people and meet other expenses for organizing party activities. Government employees are aware of the arrangement but they prove their loyalty by looking the other way when the siphoning takes place. Visit any meeting venue of BJD and find out how the event was funded/ managed and you will soon realize how development funds can be scientifically siphoned off. The Captain of BJD ‘B’, with his acumen in administration, built this formidable network as part of his dual strategy of a cadre based party and a committed bureaucracy. It is in the complementarity of Government Employees, Contractors and BJD leaders that a significant part of money meant for the poor ends up funding party programs. Incidentally, most of these contractors and control dealers are now BJD cadres and some have advanced further. Wherever the Government Scheme does not provide for engaging a contractor, the party and the officials work out informal arrangements. Go wherever you want in Odisha, you will find a BJD connection to the siphoning off money meant for the poor and no enforcement mechanism to stop the loot.

No show will be possible without a showman and no showman can exist without an image. The entire time of the Chief Minister is spent in image-building. He plans his statements, speeches, political strategies diligently and monitors the media to provide spins. But, that is all that he is interested in. The siphoning off can continue so long as his leaders can assemble a crowd and the image can be sustained. As and when taking action against a politician or bureaucrat enhances his image, Naveen Patnaik will not wink an eye-lid. He has created a make-belief world of incredible credulity despite thorough administrative incompetence. Development issues are secondary to his entire political thought process and therefore, the bureaucracy operates without any political direction, supervision or leadership. The Ministers are actually sorry figures, who resent in private for playing second fiddle to the bureaucracy, but waste no opportunity in demonstrating their loyalty for the leader. The Sycophancy was taken to the lowest level possible recently when Revenue Minister of the State Government proudly proclaimed in a public rally in the presence of the Chief Minister that he is proud to be called a 'chakara' (domestic servant) of Sri Naveen Patnaik. Mr. Patnaik has done nothing to express his displeasure for this extra-ordinary display of loyalty by a Cabinet Minister. The incident clearly shows that BJD leaders view Naveen Patnaik as a Megalomaniac leader and there is a competition in sycophancy among BJD leaders. I am waiting for temples to come up next.

It is well known among informed sections in Odisha that Naveen Patnaik is not interested in administration or governance. My impression is he loves the drama around politics with he in the centre stage. He loves to fool people. Administration and governance are petty issues better left to a coterie of bureaucrats. He enjoys moving from place to place to receive public adulation. Party leaders know that Mr. Naveen Patnaik is more of a showman and less of an administrator and it helps them to use his showmanship to their benefit even if no public purpose is served. That is why I had quoted Ninan in an earlier post as saying that some of India’s regional leaders are “populist demagogues” and “the behavior of these elected satraps is comical and clownish for the most part.” In the meantime the siphoning off development funds can continue.

After 12 years in power Mr. Naveen Patnaik still takes no interest in the implementation of the developmental programmes. He has no patience to get into details and is happy to watch smart PowerPoint presentations by his English-speaking bureaucrats, who have made him believe that everything is hunky-dory and poverty in Odisha will soon be history. He, at times, picks up some statistics and phrases from these bureaucrats and there ends his interest in administration. For meetings the bureaucrats can always be relied upon to prepare a written speech and the Chief Minister can read the script blithely without taking the trouble of remembering anything non-political. He has not addressed a single press conference either in Delhi or in Odisha in case people get to know that the king is without robes. A few hackneyed phrases can pass as media statements or better still he can read out a written statement.  ‘I am looking into the matter’, ‘the Government is doing everything possible’, ‘law will take its own course’ etc have been his passport to public life. He is the first Chief Minister in Indian history who has not addressed a press meet in 12 years and has refused to learn the language of the state. He has deliberately not learnt Odia because he would then be at par with all other politicians. He wants to be different, hatke. That is how he can remain as a celebrity; if Amitabh Bachan speaks in Odia, people will be delighted. Similar is the case of Naveen Patnaik. He can delight the crowd by speaking a few sentences in Odia. The caricature adds to the drama. His is a case study in modern media manipulation and public perception management; how a thoroughly incompetent person can build the image of a successful administrator? He can give any communication guru a run for his money.

The Great Odisha Mining Loot

The State Government has been on the overdrive since the Shah Commission gave its report on Goa mining. During the last couple of months the state mining department has issued circulars, policy guidelines, closure notices, made IT interventions and has formed a GOM etc. Continuing with these efforts to hoodwink the Shah Commission the State Government suddenly realized that it owes 57,904 thousand Crore from mine owners for the last ten years, which is almost equal to the annual budgeted expenditure of the State Government.

But, is the revenue loss to the state Government only 57,904 thousand Crore, which is the amount admitted by the State Government till date. The revenue loss will actually be more than 250 thousand Crore and this estimate is not presumptive. The sudden rise in demand for iron ore a decade back, both in the international and domestic market, created a gap between demand and supply. The State Government failed to appreciate the trend and by acts of omission and commission allowed the huge revenue loss through three sources. Firstly, the lease-holders, who are legal entities, were allowed by the State Government to produce iron ore beyond the approved mining plan. Secondly, the non-operational mines were allowed to be looted by a mining mafia, basically thieves with mining equipment. Thirdly, areas which are not covered by any mining lease were mined by criminals and sold through a network of traders and middlemen. There was no enforcement of laws and the state Government facilitated the loot. The 57,904 thousand Crore demanded from lease holders may go up once all the over-production is accounted for. But, what about the revenue loss due to mining in non-operational and in non-lease areas, which is a pure theft?

When the magnitude of the loot became apparent as a responsible opposition party we raised an alarm. I even demanded a C.B.I. probe. Instead of ordering a C.B.I. investigation the state Government decided to use the state vigilance to deflect attention from their own acts of omission and commission by trying to entangle leaders of the Congress Party with the loot of Odisha’s resources. I have always said that any act of wrong doing by any mine-owner, related to me or not, must be dealt firmly in accordance with the law. Where then is the scope of any innuendo, insinuation or doubt? Law must take its own course, so why fear the C.B.I.? Who is the Government trying to protect by not ordering a C.B.I. investigation? Let me make it very clear, once and and for all, at the cost of repetition for the n^th time that I want all violations to be dealt firmly and in accordance with the law.

The State Government also constituted well-publicised task forces to improve enforcement and went on vehemently denying that irregularities happened. But, now the skeletons are crumbling out of the closet and the state Government is admitting all the irregularities we had been pointing out by issuing circulars to stop the same irregularities, but only after seeing the Shah Commission’s report on Goa. The current attempt is to prove that they have neither any nexus with the mining mafia that looted the non-operational and non-leased areas nor with mining lease holders. They want to preempt the Shah Commission report and hope that when the matter is eventually investigated by the C.B.I.  the State Government can admit to omissions by some lower level Government officials who can be made easy scapegoats, deny acts of commission and evade criminal liability. They first tried to blame it on Indian Bureau of Mines for violation of mining plan. But, ultimately they have realized that the buck stops at the door steps of the State Government. They also realize that no investigation can show that the Congress tried to protect any wrong doing. In fact, BJD was in power and how can they blame the Congress if laws were not enforced and loots happened in broad daylight. If we were in power, we would be held guilty. What about the BJD and its Mr. Clean Chief Minister? What was he doing during all these loots?

I had been personally demanding the state Government in my capacity as the leader of the main opposition party in the state to strengthen the enforcement mechanism to stop mining of non-operational mines and areas not yet leased. The crusher machines used to convert stolen ore should not have been allowed to come up in the first place. They should not have also allowed a network of traders. Those buying ore could have sourced it from mine-owners. Stopping the transport of the stolen minerals could have been another way of preventing the theft. Who allowed all these nefarious activities and who has benefited from them? What made the Government go slow on enforcement? Why did they keep denying the irregularities and why are they now issuing circulars, policy guidelines after the great loot is over and the horse has bolted? The role of the State Government would amount to acts of omission if the loot was unknown, either in terms of modus operandai or in terms of volume. But, when everything is known and yet such broad daylight loot is allowed how can they be mere acts of omission? The State Government’s attempt to obfuscate issues despite my demand from the beginning for a thorough investigation and various insinuations are deplorable and attempts to hoodwink the public. Naveen Patnaik must answer for all his misdeeds.

One of the ways to bridge the gap between demand and supply would have been to strengthen the State-owned Odisha Mining Corporation (OMC). But, by acts of omission and commission, the OMC operated only 6 of the 38 mines for which it holds lease. Had Odisha Mining Corporation been properly managed, it could have contributed nearly ten thousand Crore every year as profit to the state exchequer, which could have been spent in the social sector while reducing the gap between demand and supply that benefited  private mine owners and the mining mafia. Why did the state Government ask OMC to under-produce while demand for iron ore was soaring? Is this not good enough evidence of a clear nexus between the State Government and illegal mining? Where do Congress leaders come in the picture? Did we ask the Government to mismanage the OMC or not to strengthen the enforcement mechanism? Did we ask the Government not to order a C.B.I. investigation like it is happening in Goa, Karnataka and Andhra Pradesh? Is it not true that the mining loot in Odisha, in terms of volume, is higher than Goa or Karnataka? Have we not been demanding the OMC to play a greater role?

Also, the State Government should have been pro-active in clearing proposals for extension of mining lease by legal entities. Instead the applications were kept pending or delayed to extort maximum pound of flesh in bribes to clear the applications and for blackmail. Such situation exists in no other state. A transparent Government will always clear applications in a time bound manner rather than allow rampant corruption. The mining plans of lawful mines should also have been revised with the approval of Government of India to reduce the demand-supply gap. The State Government did not take any proactive steps for revision of the mining plans. They should have cancelled the lease of non-operational mines, which could have been leased out following a transparent and competitive bidding process. Till 10-15 years back mining was not as profitable a business and the volumes were low. But, now with increasing demand we should have done much better in value addition creating jobs and we should have been more methodical in allowing scientific mining within limits imposed by the very non-renewable nature of this scarce resource and of course environmental impact. All the Mega Projects for value additions remain as misconceived MOUs; un-implemented or un-implementable. And of course, the Government should have used the revenue earned from mining to strengthen the enforcement mechanism. Instead, acts of omission and commission by the state Government has led to a real revenue loss of nearly 250 thousand Crore and Odisha continues to be the poorest state in India. Now the stolen ore has crossed the seven seas and built modern infrastructure in China. What we need is a multi-agency probe by not only the C.B.I., but also the Income Tax and the Enforcement Directorate? I have my doubts that the Government can get back any significant amount from the 57,904 thousand Crore that they are now claiming from lease holders as the entire process may enter into a prolonged process of litigation and arbitration. As regards the mining mafia, there is not even an address to send a notice.

In the last 12 years the Chief Minister has perfected a few stock answers, mainly adjectives, like ‘false’ and ‘baseless’ etc. He will say that law will take its own course, but will continue to oppose a C.B.I. investigation. This is the true story of the Great Odisha Mining Loot.