India Inc. – on way to a dusty death?

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“FDI in retail, land acquisition bill, cut in subsidies” an industrialist friend was pointing out, “the government is finally warming up to the reform process. I am sure that the much needed impetus to the economy will now be administered and we will be back on the path of growth.” While there are certain reasons to cheer, the pall of gloom may not lift as early as certain over enthusiastic corners are now making out to be.
The one reason that scares me the most is the backlog that has accumulated over the last year or so because of the bad weather. As a recent study has pointed out, projects worth INR 2 trillion have been shelved, some of them permanently. And this may emerge as a major concern for the economy in general and the policymakers in particular.
Talk to any industry house worth its balance sheet and you will hear exasperated complaints and helplessness at their inability to push through with proposed projects.
Environmental clearances, land acquisition and the scarcity of capital at affordable rates are the three bones of contention, though not in the same order across categories. Local unrest, which is increasingly becoming militant, is another problem that is pushing projects into the backburners. Add to this the scarcity of both coal and iron ore and the tip of the iceberg emerge.
What no industrialist will tell you however is that the industry used to “managing” the environmental clearances, coal and iron ore linkages and accessing both coal and iron ore of the illegally mined variety at a cost substantially lower than the prevailing market rates are now finding their operations cost prohibitive.
An entire chain of sponge iron units of West Bengal, hitherto fueled by “disco” coal, pilfered from the CIL mines of Ranigunj and thereabouts is now on the throes of closure as by they are not sustainable at market rates. The entire parallel economy fed and fueled by pilferage of both coal and iron ore are at stake and people who have minted (mined) moneys by being parts of this complex web of deceit are now forcing many to grasp for breath.
It is not about an allocation of a bloc here or there. It is not about Coalgate either. The rot (loot?) was much more pervasive. I recall as one prominent member of the dreaded Coal Mafia had famously quipped, “Governments come and Governments go, we are here forever. Governments are peopled by politicians who have the popular mandate. And political parties need money. Money, that can buy everything.”
And this is where the problem is. Everything is still available at a price. But compelling factors have jacked up the price to such a high that it is just not viable for many an industry. This argument is also refurbished by the fact that huge capacities that have come up in the near past are lying unutilized. Capacity utilization has hit the nadir as for many, the cost of production is just not within control. Realisation is not enough to meet the cost that had underhand payment for the purchase of undue favours built in. And forget about being remunerative, production is not even guaranteeing a break even.
 It is a curious case of the knave calling the rascals black. If politicians have taken bribes, my friends, it is you the industrialists who have paid them and have looted the nation by piling your coffers with tainted cash. Not only have you guys abrogated your right to protest, now that you have been caught on the wrong foot, you do not have the moral right to sermonize.
Read my lips, we are yet to see the end of the coal and iron ore conundrum.
– Chawm Ganguly