Monday, 29 October 2012

The Jaipal Reddy Craze

Media has been going crazy about Mr Jaipal Reddy's shift from oil ministry all day today. A story first appeared in The Hindu yesterday about a possible shift of Mr Reddy out of the ministry because of his possible opposition to Reliance Industries to its demand of increase in the Natural Gas prices even before their existing contract with the government expires.  They had also demanded that the CAG audit which was required by the ministry of their operations in the Krishna Godavari basin should be limited to audit of financial books and not be extended to performance audit. The second point about performance audit is significant because there has been a decline in production of gas compared to the estimated levels of a Directorate General of Hydrocarbon's report in march 2011.

In my post yesterday I had briefly mentioned about this move. Mr Reddy's removal from the government has to be seen in the context of all what has happened in UPA II starting with the CWG scam and the complete lack of confidence people today have in the functioning of the government. There is a worry about the crony capitalism being promoted but what can really be expected after all it is the ministry headed by the Prime Minister himself which has come under the coal scam. I don't think may of us have witnessed a similar lack of confidence in the government of the day that only a day after a major cabinet reshuffle so many questions are being asked about the motives behind an exercise which is in the end the Prime Minister's prerogative. So there is no denying that this decision is squarely his responsibility and only he would be able to answer this question.

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