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Tuesday, August 2, 2011

KARNATAKA MINING SCAM: Skeletons from Bellary!


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August 2, 2011 / By Paranjoy Guha Thakurta / DC.

Three years and two months after he was sworn in as the first Bharatiya Janata Party chief minister of a state in southern India, Bookanakere Siddalingappa Yeddyurappa was asked by his party bosses to put in his papers.

He did not do so gracefully. He left kicking and screaming. Next in line to lose his job is Gali Janardhan Reddy, Karnataka’s minister for infrastructure development, tourism and youth affairs.

The two have been indicted in the strongest possible language in the final report of the state’s Lokayukta (or “people’s ombudsman”), Justice N. Santosh Hegde, on illegal mining and exports of iron ore from the Bellary region of the state.

They are at the epicentre of what is arguably the most brazen scandal in independent India; in certain respects the Bellary scam is more brazen than the second-generation telecommunications spectrum scandal. According to the Comptroller and Auditor General of India, the 2G scam resulted in a “notional” or a “potential” loss to the exchequer that could be as much as Rs 1,76,645 crore.

Even if this figure is disputed, the amount represents funds that could have been obtained, money which could have accrued to the government, but did not. In the case of the iron ore export scandal, the amount involved is much lower. Justice Hegde’s report has quantified the loss on account of illegal exports of iron ore from Karnataka, between April 2006 and December 2010, as Rs 12,228 crore.

But there’s a notable difference between what is popularly called the 2G scam and the scandal relating to iron ore mining in Bellary. In the case of the latter, a non-renewable resource belonging to the people of the country has gone for ever.

Much of the ore has been exported to China where it has been converted into finished steel products, rods and bars that are part of buildings and stadia in Beijing, Shanghai and elsewhere.

On July 16, 2010, Mr Yeddyurappa had acknowledged in the state Assembly that over 30 million tonnes of iron ore had been illegally exported from Karnataka over a seven-year period between April 2003 and March 2010.

The total worth of this huge quantity of iron ore is at least $1.5 billion or Rs 7,500 crore (assuming very conservatively that each tonne of iron ore is worth $50 in the international market). These are clearly under-estimates.

The actual losses are much higher, especially if one considers the way in which the ecology of the region has been ravaged and the livelihoods of hundreds of thousands of families ruined. During the making of a documentary film, Blood and Iron (a film by the writer of this column), one noticed the scale of the devastation caused by iron ore mining and the sharp contrast in the way in which the majority live and the lifestyles of a privileged few.

Bellary, which has a population of around two million, boasts a per capita income in excess of Rs 47,000, well above the average per capita income of Karnataka (around Rs 41,000). However, the literacy rate of the town at 57 per cent stands well below the average literacy rate of Karnataka (around 67 per cent).


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