There are so many tales about postings in the economic departments in Ranchi of late, each more bizarre than the other, that they could have all been brushed aside as hyperbole. The problem are the tales I heard from two very senior government officials from the Centre who have been posted in the state capital, that are impossible to brush off.
Going by the evidence they have uncovered in the past few months, Jharkhand?s problems are now strikingly similar to those faced by some of the mineral rich countries in Africa. The state has been engulfed by a fatal combination of extremely attractive booty in its mines, an administration that has ceased to exist in the war for state power and a public that is too poor to be able to demand accountability?the state?s per capita income at Rs 20,811 in 2006-07 is 44% lower than the national average, and a thin middle class partially co-opted into the spoils system.
This has created a buccaneering spirit of an earlier century, right in the middle of India of today. As a result, and this is where the analysis becomes very disturbing, the better corporations have at many points ceded ground to the rogues. So it is difficult to say if and when the state will come out from the mess.
Orissa has fared better, as the state administration is far more stable. But here too there are similar examples. In Kalinganagar, in the Jajpur district, about 11 steel companies have set up shop. Among them, Tata Steel has made the deepest investment among all for rehabilitation of the people who had to move out because of the mines and the factories. Yet the current agitation is largely directed at this company. Whether this is spawned by corporate rivalry is difficult to pin-point, but in the absence of the state as a regulatory player, the accusations are difficult to sort out.
So it will be facile to blame Madhu Koda, the former CM of Jharkhand, as the only rogue element. He was obviously the most visible node in the mines. But that there will be a number of others is just stating the obvious.
The evidence being put together in Jharkhand by the investigative agencies shows the rot has spread through the state bureaucracy at the top level. In a report that could soon create a huge ripple, one of the agencies has found that since 2005, none of the mines opened up for private mining by the state was given without a bribe. The report also adds that the state government bureaucracy repeatedly delayed sending up to the Centre the list of bidders till the favourites were included in the list. This, the report says, was apparently the reason why massive delays often occurred in giving out leases.
Even Steel Authority of India had to wait for more than two years to get a fresh lease on Chiria Hills. So, a significant section of the bureaucracy has become pliable. For any administrator the chance of cutting through this graft system is terribly difficult.
These are serious allegations. But equally serious are those that cannot be put in the report. These are the allegations about the state government officials who are sorted into slabs for payouts. Incidentally, one of the authors confided in me that he now records conversations with all government officials, so deep is the level of mistrust in the state.
The problems with the allocation of the mines in these states are also an indictment of the Central government. India has not suddenly discovered its mining riches. Yet for the last 60 years since independence, we have not worked out a system for allocation of mines that satisfies the norms for efficiency, equity and growth.
Yet, despite the rise in the number of investors, the government of these states still uses the same rudimentary technique to map the area instead of the latest geospatial surveys. Incidentally, the Jharkhand government has not uploaded its data on mines since the year 2002 on its Web site, run by the NIC. Its data, for instance, on the collection of state revenues from minerals is from the year 2002-03, when it received Rs 798 crore from the source.
The Centre, too, has restricted itself to the collection of royalty from the exploitation of the mines, without involving the state governments in significant capacity-building exercises. The departments of mines in both Orissa and Jharkhand are seriously understaffed in terms of technical people. There are only six geologists in Jharkhand mining department and there are vacancies for 33. The peculiar combination of IAS-dominated senior bureaucracy and a poorly trained staff graduating from the ranks of promoted clerks is a norm here too, just as it is for government departments in most states. This means project appraisal is a formality and the only conduit is the flow of cash to settle all arguments. As FE reported in one of the stories, Koda cleared 41 files for iron ore mining leases in a single day during his stint.
To expect regulatory oversight in this jungle is obviously absurd.
subhomoy.bhattacharjee@expressindia.com