Crony capitalism is biggest threat to economy of India, current coal mining scandal exemplifies-BBC

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9/4/12, "'Coalgate controversy': India police raid coal firms," BBC, Analysis by India correspondent, Soutik Biswas

"India's coal scandal exposes its opaque policy making and brittle governance.

It also points, as many believe, to the rise of crony capitalism which has emerged as the biggest threat to the economy.

The auditor's report on the sale of controversial coalfields makes it clear that everybody has some responsibility for the mess.

Bureaucrats dithered and continued non-transparent policies to hand out licenses, ruling politicians at the centre and in the states allegedly pushed favoured companies, and the companies themselves exploited the system.

The government mooted the idea of auctioning coalfields to maximise revenues in 2004. But only in 2010 did it become law. The government says policy takes time to translate into law.

But, as the auditor's report clearly says, many companies were helped hugely by this delay."

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