Chief Justice of India S H Kapadia joined the debate on the CAG’s estimate of “windfall gains” for private players in Coalgate, suggesting such assessments may not be accurate.
“People should be educated on economics as well to understand that these irregularities should be understood from the point of loss, which is a matter of fact, and not from profit angle, which
is a matter of opinion,” the CJI said in a remark lapped up by a government reeling under the charge that its failure to prevent the scam had helped private players fatten their purses by Rs 1.86 lakh crore. “Valuation adopts very different criteria. If we understand these concepts properly, then we will know where the shoe pinches,” the CJI added.
The government, led by PM Manmohan Singh, has questioned the CAG’s estimate. The auditor has said that the government’s failure to implement its own decision to auction coal blocks helped business houses walk away with the precious resources.
Welcoming PM Manmohan Singh’s recent measures on economic reforms, the CJI warned that the efforts to pull the economy out of the woods would be meaningless if the well-connected continued to grab an unfair share of economic benefits. In what he called his “swan song” before he retires, the CJI said, “Our leaders must know that without the rule of law, well connected people can grab an unfair share of the economic benefits which will affect inclusive growth.”
Delivering his address before the PM, Justice Kapadia said the rule of law never impeded economic growth and it must go hand in hand with the decisions taken by the government to attract foreign direct investment to lift the damp sentiments in the market and the manufacturing sector.
He said one of the singlemost important factors for economic growth was the respect of the government for the rule of law, which enforced minimum standards of fairness and helped in improving the country’s governance. He said an 8% GDP growth rate generated 12 million new jobs per year, but when the growth rate falls to 5.5%, the employment generation dips to 8.25 million. “India has a 30 million youth population needing 10 million new jobs every year. If the growth rate falls, then unemployment will increase. That’s where the investment comes to bridge the gap,” he said. Over the PM having initiated reforms to fight the doomsday, he said, “But be it domestic or foreign direct investment, I have always given importance to investment if it generates employment.”
But he also cautioned the PM about the flip side of reforms. “It should not be that 300 million prosper and 700 million suffer. That is why the need of the hour is inclusive growth and economic democracy,” the CJI said. Justice Kapadia said the Constitution framers wanted that natural resources should be allocated to serve greater common good.