“China will make your dream come true,” Li told a banquet hall filled with Chinese and Indian business executives in the financial capital of Mumbai as he wound up his visit on Tuesday.

China’s overtures, which come amid worries in Beijing that it is being encircled by the United States and its allies, however met with a cool response.

India has been shaken by a recent border spat with China and is cautious about Beijing’s friendship with rival Pakistan, where Li flies on Wednesday. New Delhi is also concerned about a ballooning trade deficit with China and a flood of cheap Chinese-made goods undercutting local manufacturers.

While India’s relations with the United States are cordial and it is a major purchaser of its weapons, New Delhi has stayed away from a close strategic alliance.

“We would not like to see India become a tool of other major countries, especially the U.S., to counterbalance or check or contain China,” said Hu Shisheng, an India specialist at CICIR, a Chinese government-backed think tank in Beijing.

“We want, through closer relations, to support New Delhi’s policy that maintains equal distance. It’s not realistic to expect India to be closer to one country than the other.”

Li, who is travelling with executives from 41 Chinese companies, said the two rapidly-growing economies should free up bilateral trade and do more business together, instead of relying on others for development.

“With a long border and extensive common interests, China and India should not seek cooperation from afar while neglecting the partner close by,” he said in a speech to businessmen and diplomats earlier on Tuesday.

Chatty and relaxed, Li repeatedly took Prime Minister Manmohan Singh by the hand and said a visit to India 27 years ago influenced him much as exposure to the sub-continent had affected Steve Jobs, the legendary co-founder of Apple.

Singh smiled back, but hardened India’s stance on the long-standing territorial dispute between the two nations, saying broader ties could not blossom without peace on the border.

In the past, India has sought to separate the border dispute from wider relations. The difference this time was that Li’s visit came just weeks after Chinese troops set up camp 19 km (12 miles) inside territory India claims as its own.

The stand-off, which only ended on May 3 after three weeks of high-level negotiations, caused a public outcry in India. It overshadowed preparations for Li’s trip and may explain the lack of significant bilateral agreements signed.

SEVERELY TESTED

Despite the large commercial delegation, only one major business pact was signed, a $1 billion debt-for-fuel deal between China and Essar Energy PLC Lt, part of India’s Essar group. Smaller pacts added a total $500 million in deals.

China and India disagree about large areas of their 4,000 km (2,500 mile) border and fought a brief war 50 years ago.

There has not been a shooting incident in decades but the feud prevents normal trade relations between neighbors, who account for 40 percent of the world’s population.

Lalit Mansingh, a former Indian foreign secretary, the top official in the external affairs ministry, said he detected a new openness between the leaders of the two countries, and a willingness to tackle thorny issues. But he said the recent border confrontation had severely tested India’s patience.

“They don’t want us to get closer to the Americans. But ironically, that is exactly what they are doing by being extremely provocative at the border,” Mansingh told Reuters, adding that China was also irking neighbors with maritime disputes with Japan and nations in Southeast Asia.

“By picking up a fight with every single neighbor after a period of friendship with all neighbors, the Chinese are, in fact, getting people together in a line up against them.”

On the back of this week’s visit, both Prime Minister Singh and Premier Li are due to visit each others respective rivals.

Next week, Singh is headed to Japan, which is engaged in an increasingly edgy dispute with China over a group of islets in the seas between them.

Li goes to Pakistan, where he is to sign agreements to develop the Chinese-managed Gwadar port.

India has often been nervous about Chinese agreements with its neighbors that are not strictly military but could be leveraged in a conflict.

Indians sometimes refer to these as a “string of pearls,” which include China’s ties with Pakistan, access to a Myanmar naval base, Chinese construction of a deepwater port in Hambantota, Sri Lanka, and its deepening ties with Nepal and the Maldives. Its force deployments in Tibet add to India’s stress.

In Beijing, there are worries that the country is being encircled by the U.S. strategic pivot to Asia and its allies like Japan, South Korea, Taiwan, the Philippines and more recently, Vietnam. China has also been closely watching the improvement of U.S. ties with Myanmar and India.

TRADE GRIPES

After the border, India’s biggest gripe with China is over trade. From almost nothing in the 1990s, bilateral trade hit a peak of $73 billion in 2011, heavily skewed in China’s favor.

In comparison, China’s annual trade with Japan is close to $300 billion. On Tuesday, Li pitched hard for closer economic cooperation and said Chinese companies could help India rapidly modernize its skeletal infrastructure.

“Our industrial structures are highly complementary, India has a competitive edge in IT, software and bio-medicine, while China is seeing rapid expansion of its machinery, textiles and emerging industries,” Li said, and offered talks on a free trade agreement.

But India complains that China does not give its pharmaceutical and IT companies fair market access.

One Indian trade official, speaking to Reuters, burst out laughing at the free trade proposal, saying there was no way India would consider it until the trade imbalance was addressed.

That may take some time.

In a joint statement signed on Monday, China reiterated it would increase access for Indian products. The same was said on a visit by Premier Wen Jiabao in 2010 – but last financial year, India’s bilateral trade deficit grew to $41 billion.

(Additional reporting by Annie Banerji, Satarupa Bhattacharjya and Devidutta Tripathy in NEW DELHI; Henry Foy in MUMBAI and Terril Jones in BEIJING; Editing by Raju Gopalakrishnan)

The number two in the Chinese leadership offered New Delhi a
“handshake across the Himalayas” and said the world’s most
populous nations could become a new engine for the global
economy if they could avoid such irritants.

“Both sides believe that we need to improve the various
border-related mechanisms that we have put into place and make
them more efficient. We need to appropriately manage and resolve
our differences,” Li said at a joint news conference with
India’s Prime Minister Manmohan Singh, where both men appeared
relaxed.

China and India disagree about large areas on their 4,000-km
(2,500-mile) -long border and fought a brief but bloody war 50
years ago.

While there has not been a shooting incident in decades, the
long-running dispute gets in the way of improving economic
relations between neighbours, who account for 40 percent of the
world’s population and whose fast growing markets stand in
contrast to the stagnant economies of the West.

Bilateral trade reached $66 billion last year but both sides
believe the potential is much greater. In a joint statement that
seemed to address Indian gripes about its $29 billion deficit
with China, they agreed to address the imbalance, with specific
reference to pharmaceuticals, IT services and agriculture.

India’s Essar Group conglomerate is set to sign a $1 billion
loan deal with China’s China Development Bank and China’s
largest oil and gas producer PetroChina
during the trip, sources said. They said the loan
would be backed by the supply of refined products to PetroChina.

In an impromptu speech after an official welcome ceremony at
India’s colonial-era presidential palace earlier on Monday, Li
said he wanted to build trust and cooperation on his trip.

“World peace and regional stability cannot be a reality
without strategic mutual trust between India and China. And
likewise, the development and prosperity of the world cannot be
a reality without the cooperation and simultaneous development
of China and India,” he said.

Li said he chose New Delhi as his first destination on the
four-nation tour to show how important India is for China and
also because he had fond memories of visiting as a Communist
youth leader 27 years ago.

EARLY SOLUTION?

While most observers think it will take years to resolve the
border dispute, recent statements from Beijing suggest China’s
new leadership would like to speed things up, perhaps to shift
its attention to disputes elsewhere in Asia, including the South
China Sea.

Singh said negotiators will meet soon to seek an early
agreement on a framework to settle the border, a goal that has
so far eluded representatives in 15 rounds of high level
negotiations since the 1980s.

The three week stand-off on the border that ended on May 3
was the latest reminder that sensitivity runs high. It
distracted diplomats’ attention from talks on investment and
trade ahead of Li’s trip and soured public opinion toward China
in India.

The disagreement over who owns barren patches of the Ladakh
plateau and the entire Indian state of Arunachal Pradesh means
there is almost no road or rail connectivity between the giants.

At a meeting with Singh in Durban this year, Chinese
President Xi Jinping said the two countries should seek a
solution “as soon as possible” – a departure from previous
language. His urgency was echoed in Delhi last week by foreign
ministry spokesman Qin Gang, who said the two sides needed to
“redouble efforts” to reach a solution at an “early date.”

That will not be easy, not least because it is politically
difficult for an Indian politician to concede territory to
China. Protests by nationalist groups in Delhi and the northern
state of Kashmir on Monday against Li’s visit highlighted
anti-China feeling among some Indians.

Prior to Monday’s meetings, a senior official at the foreign
ministry said India was sceptical of recent overtures and will
wait to see if China will bring anything new to the table.

Among the measures being looked at to reduce the risk of
border confrontations is allowing higher level meetings between
regional military commanders, another Indian official said.

Also raised in meetings between the leaders was the issue of
the Dalai Lama, who China considers a separatist and who lives
in exile in India.

India repeated its position that the Dalai Lama is a
spiritual and religious leader, a senior Indian government
official said. On Monday, a protester dodged tight security to
unfurl a banner saying “Tibet will be free” in front of the
hotel where Li is staying in Delhi.

After India, Li is due to visit Pakistan, Switzerland and
Germany and is likely to carry a message that China wants more
open foreign relations and should not be seen as a threat.

“We stand ready to embrace the world with a more open mind
and hope that the world will view China with a calm frame of
mind,” he wrote in a newspaper editorial published on Monday.

The number two in the Chinese leadership offered India a
“handshake across the Himalayas” in an editorial published on
Monday in The Hindu newspaper and said that together the
emerging economic giants could become a new engine of the world
economy.

China and India disagree about large areas on their 4,000-km
(2,500-mile) -long border and fought a brief but bloody war 50
years ago. There has not been a shooting incident in decades,
but the long-running dispute gets in the way of improving
economic relations between the world’s two most populous
nations.

The editorial was part of a media campaign apparently aimed
at cooling Indian public anger against China following the
three-week standoff on a freezing Himalayan plateau that ended
on May 3.

In an impromptu speech after an official welcome ceremony at
India’s colonial-era presidential palace on Monday, a
relaxed-looking Li stood with India’s Prime Minister Manmohan
Singh and said he wanted to build trust and cooperation on his
trip.

“World peace and regional stability cannot be a reality
without strategic mutual trust between India and China. And
likewise, the development and prosperity of the world cannot be
a reality without the cooperation and simultaneous development
of China and India,” he said.

The two leaders held closed-door talks on Sunday, shortly
after Li arrived in the Indian capital.

Singh told Li that friction on the border could affect
relations. He pressed his counterpart to do more to redress a
trade imbalance that has left a $29 billion deficit with China
at a time India is struggling with a record current account gap
that has emerged as its main economic weak point.

The latest incident distracted diplomats’ attention from
negotiations on investment and trade ahead of Li’s trip and
soured Indian public opinion toward China.

Also raised in the meeting was the issue of the Dalai Lama,
who China considers a separatist and who lives in exile in
India.

India repeated its position that the Dalai Lama is a
spiritual and religious leader, a senior Indian government
official said. On Monday, a protester dodged tight security to
unfurl a banner saying “Tibet will be free” in front of the
hotel where Li is staying in Delhi.

TRADE

Bilateral trade between the two countries touched $73
billion in 2011, making China India’s largest trade partner, but
slipped to $66 billion last year.

Singh told Li it was important to balance out trade as the
two countries aim for $100 billion in bilateral trade by 2015.

“While we are committed to the $100 billion by 2015 we will
have to have a more balanced rate,” said the senior government
official, who was briefed about the restricted meeting.

India is pressing for greater access for its pharmaceuticals
and IT services.

The official described the conversations as constructive and
cordial. Earlier statements from Chinese officials have given
some hope that India’s gripes are being heard.

“China attaches great importance to the China-India trade
deficit issue. We are willing to expand our market for India’s
products and provide facilitation,” deputy foreign minister Song
Tao said last week.

Up from next to nothing in the 1990s, trade has been heavily
skewed in favour of China. It exports power and telecoms
equipment to its neighbour, which as one of the world’s fastest
growing major economies could offer brighter opportunities for
business than the stagnant West.

Li said trade, an economic corridor and industrial loans
would feature in the talks being held on Monday. A joint
statement is due to be signed later in the day.

Prior to the visit, Li said he chose his first destination
on the four-nation tour to show how important India is for China
and also because he had fond memories of visiting as a Communist
youth leader 27 years ago.

India’s Economic Times newspaper said the Essar Group
conglomerate would sign a financial agreement with China’s China
Development Bank and China’s largest oil and gas producer
PetroChina Company during the
trip.

After India, Li is due to visit Pakistan, Switzerland and
Germany and is likely to carry a message that China wants more
open foreign relations and should not be seen as a threat.

“We stand ready to embrace the world with a more open mind
and hope that the world will view China with a calm frame of
mind,” he wrote in the editorial.

At a meeting shortly after Li arrived in India on his first foreign trip, Singh said relations were affected when “peace and tranquility” on the border was impacted, a senior government official with knowledge of the discussions told Reuters.

The official said Singh was referring to a three-week standoff over disputed territory in the western Himalayas, which was only resolved on May 3 after a public outcry in India.

The world’s two most populous nations disagree about large areas on their ill-defined border and fought a brief but bloody war across it 50 years ago. Although there have been no shooting incidents for decades, both sides maintain a large military presence and often patrol inside disputed areas.

The latest incident distracted diplomats’ attention from negotiations on investment and trade ahead of Li’s trip and soured Indian public opinion toward China.

TRADE

Bilateral trade between the two countries touched $73 billion in 2011, making China India’s largest trade partner, but slipped to $66 billion last year.

Singh also said it was important to find a way to balance out India’s $29 billion trade deficit with China as the two countries aim for $100 billion in bilateral trade by 2015.

“While we are committed to the $100 billion by 2015 we will have to have a more balanced rate,” said the official, who was briefed about the restricted meeting.

The official described the conversations as constructive and cordial but said he did not know Li’s response to Singh’s comments.

“I am looking forward to exchanging views with Indian leaders on bilateral ties and regional and global issues of common concern,” Li said in a statement issued after his arrival in India and reported by China’s state news agency Xinhua.

Up from next to nothing in the 1990s, trade has been heavily skewed in favor of China. It exports power and telecoms equipment to its neighbor, which as one of the world’s fastest growing major economies could offer brighter opportunities for business than the stagnant West.

The growing deficit is a bone of contention though, and India is pressing for greater access for its pharmaceuticals and IT services.

China has never sought a trade surplus or blocked imports, its deputy trade minister Jiang Yaoping said on Thursday, blaming the imbalance on “differences in the two countries’ economic structures”.

Prior to the visit, Li said he chose his first destination on the four nation tour to show how important India is for China and also because he had fond memories of visiting as a Communist youth leader 27 years ago.

The two countries are expected to sign agreements on trade, agriculture, the environment and culture, Xinhua said after Li arrived on Sunday. Li is due to leave India on Wednesday to travel to Pakistan, then Switzerland and Germany.

(Editing by Jon Hemming)

He was a wealthy coal trader, a politician and, police say, a crime boss. At the time of the shooting, Singh had 14 criminal charges against him, including one for homicide. His career and murder are emblematic of one of India’s most nagging economic problems: the corruption that cripples the crucial coal industry.

The shooting was the latest gangland killing between rival coal clans, both with the surname Singh. They have fought for years to control rackets that prey upon the coal industry in the impoverished state of Jharkhand, home to some of the nation’s biggest mines. The rackets include controlling unions and transport, manipulating coal auctions, extortion, bribery and outright theft of coal. Popularly known as the “coal mafia,” their tentacles even reach into state-run Coal India (COAL.NS: Quote, Profile, Research), the world’s largest coal miner, its chairman told Reuters.

On a series of trips to the region, Reuters found widespread plunder in India’s coal country that contributes substantially to chronic shortages of a commodity fuelling over half the power generation in Asia’s third-largest economy.

It is a murky subculture that entwines the coal mafia, police, poor villagers, politicians, unions and Coal India officials. Coal workers pay a cut to crime bosses to join their unions, which control access to jobs, according to law-enforcement and industry officials. Unions demand a “goon tax” from buyers, a fixed fee per tonne, before loading their coal. Buyers must bribe mining companies to get decent-quality coal. The mafia pays off company officials, police, politicians and bureaucrats to mine or transport coal illegally.

In a startling admission, Coal India Chairman S. Narsing Rao said he knows some of his officials are involved in stealing coal but his company can’t control what happens once trucks leave the mine gate.

“Obviously it happens with the connivance of our own guys, in collusion with our own guys,” he said in an interview.

Rao estimated the scams cost his company, which has a near-monopoly, about 5 percent of its 450 million tonne annual output. Two senior police officials in Jharkhand said the real figure is between a fifth and half the production at some mines.

Corruption, crime and waste in the economy exact a heavy toll on the economy. Recently built power stations stand idle across India, mainly for lack of coal. Last July, the world’s most severe blackout shut off power in half of India, home to 1.2 billion people.

Increasingly, power companies are turning to imports as domestic output lags demand. Yet India sits on the world’s fifth-largest coal reserves, which the government says could supply the nation’s energy needs for decades. Coal imports have tripled in a decade to some $1.5 billion a year. The International Energy Agency expects imports to rise faster in India than anywhere else, as consumption overtakes that of the United States by 2017.

National political leaders promise action – but at the same time throw up their hands.

Coal Minister Sriprakash Jaiswal said in an interview that the Central Bureau of Investigation, akin to the U.S. Federal Bureau of Investigation, was taking a larger role in tackling the mafia, but emphasized it was mainly up to state governments to tackle crime.

“There is no doubt that coal mafias are active. We accept that coal theft happens. But law and order are state subjects,” Jaiswal said. “I won’t say that the state governments do not cooperate. But the system there is so weak, policing is weak.”

PDF version of this story: link.reuters.com/qej97t

Graphics

Mafia territory – link.reuters.com/pyn75t

Chain of corruption – link.reuters.com/pyn75t

SINGH MANSION

Suresh Singh seemed relaxed at the December 8, 2011, wedding party of a local hotelier’s son, police and a witness said. His bodyguards were unarmed.

A high-school dropout with a long police record, the 48-year-old Suresh thought the old gang ways were becoming outdated in the “Shining India” of today, a source close to the family said. He had even sent his son to England to study banking.

After the bullets flew, Suresh’s bodyguards drove him to a hospital, where he died 30 minutes later. His father filed a police report saying his son, in a dying declaration, had named three people responsible for the attack – Sashi, Sanjeev and Ramadhir Singh, from a rival family known as “Singh Mansion.”

Eleven witnesses also named Sashi as the shooter, according to the police report.

“The moment Suresh got up to leave the party, Sashi stood up, walked towards him and shot him seven times,” said Ravi Thakur, the police officer in charge of the investigation.

The victim and his alleged attackers were rivals in business and local politics. Suresh was twice an unsuccessful candidate for India’s ruling Congress party in elections marred by violence. The mother of the accused gunman, Sashi, is the mayor of Dhanbad. Sashi is still at large, having fled across state lines, police said. No charges have been filed against the other accused individuals.

Police have differing versions of why Sashi would have shot Suresh. Thakur says he is investigating the case as a premeditated shooting, either in revenge for a previous murder or over their conflicting business interests. Another police officer and people in Dhanbad say an insult was the trigger.

Sashi’s cousin Sanjeev, the young heir to the Singh Mansion dynasty, is also a named suspect in the murder, though he was not at the wedding party. He was in hiding for months before returning to Dhanbad last September. Now he rides the streets of the coal capital with 20 men and an armed police escort in a convoy of white SUVs.

“Today, Suresh is not here, but it doesn’t mean I don’t have any more rivals who wish to kill me,” Sanjeev said in an interview.

Sanjeev is expected to run in the next state assembly elections as a candidate for the Bharatiya Janata Party (BJP) in Jharia, party members told Reuters. Sanjeev declined to confirm that.

In a two-hour interview over tea and samosas at the orange-walled mansion in Dhanbad that gave the family business its name, Sanjeev denied he or his family were involved in Suresh’s murder. But he spoke extensively about their feud.

Sanjeev’s father started Singh Mansion in the early 1970s, having risen from coal worker to union boss and state legislator. He counted the late Prime Minister Chandra Shekhar, who once spent a weekend at the mansion, as a friend, Sanjeev recalled.

The father’s power and business were based on the labour union he controlled and which remains a bastion of the Singh Mansion enterprise. It is empowered to bargain collectively for workers at Bharat Coking Coal Limited (BCCL), a Coal India subsidiary. Police say Singh Mansion uses the union to control and extract bribes from coal transporters.

The feud began in the 1990s, when Suresh began to compete with Singh Mansion at coal auctions, Sanjeev said. The auctions are a key focus for crime syndicates, police say. Mafia-controlled unions will sometimes refuse to load coal bought by anyone else. That usually ensures the syndicates are the only bidders and keeps auction prices low, said a person with close knowledge of Suresh Singh’s affairs.

The union controlled by Singh Mansion, Janta Mazdoor Sangh, has long exerted influence over BCCL officials, who allow Singh Mansion to run rackets that include theft of coal to sell on the black market and controlling trucks that leave the mines. Sanjeev, who is the general secretary of the union, denied the union was involved in anything illegal.

BCCL’s chairman, T.K. Lahiry, said it is true that when he took over the company four years ago, Singh Mansion’s influence was huge. “Singh Mansion was having entire command and control” over a major area in BCCL’s operations, he told Reuters. “All sorts of anti-social activities were going through that particular office.”

He said he shut down the area office and transferred dozens of influential officials suspected of working for Singh Mansion. BCCL as a whole is making a profit now after years in the red, he said, but he added that only the police could put an end to the coal rackets.

BLIGHTED LANDSCAPE

Decades of lawless coal trading have left their mark everywhere around Dhanbad, where coal dust chokes the sky. Dirt-poor families dig coal under a baking sun in unregulated pits. Thousands of people carry baskets of illegally mined coal atop their heads or by bicycle to mafia-run depots. Many of the trucks that link the mines to the rail yards carry coal mixed with rocks, said a person with family ties to a coal gang. Other trucks are simply not counted as they leave.

At the Kapasara coal-mining operation, owned by Coal India subsidiary Eastern Coalfields Ltd (ECL), villagers dig illegal tunnels alongside licensed earth-moving equipment. Armed police watch indifferently. Illegal miners for years have been digging outward from a huge pit ECL was supposed to have closed and filled with sand. Four years ago, one tunnel collapsed on dozens of miners, killing six.

“This whole place is hollowed out,” said Jatin Mishra, tapping with a stick. He is part of an informal group of residents trying to use right-to-information laws to prove ECL has misspent millions of rupees on contracts to close the tunnels.

The “sand scam” was a big money spinner in the early 1980s for the mafia, and the failure to close illegal mines has made it easier for old fires to spread, the residents’ group said.

ECL Chairman Rakesh Sinha denied that. He said illegal tunnels were filled whenever police notified the company. Illegal mining is rampant, he conceded, due to inadequate policing.

Singh Mansion was among those who received contracts for filling mines with sand, said a senior BJP state official close to the family. “On paper, the mines were filled,” the BJP official said. “But they weren’t.” Sanjeev Singh denied that.

RAILWAY BATTLEGROUND

At a railway siding in Dhanbad, trucks load a train with coal from a nearby pithead. The siding is controlled by Singh Mansion, said a local politician close to Sanjeev’s family. These sidings are a key battleground for mafia gangs across Jharkhand state. Here, their unions extort money from coal buyers and load rocks along with the coal onto the trains, say police and coal-industry officials.

A manager at a state-run power company in Jharkhand that buys coal from Coal India said his plant’s efficiency and costs were harmed by rocks and ash mixed in with the coal. Adulterated coal is now such a major problem that the country’s top power producer, state-run NTPC (NTPC.NS: Quote, Profile, Research), has witheld some payments to Coal India, citing quality concerns.

“Mafia in coal is a big issue, they are not addressing these issues,” a senior NTPC official told Reuters when asked about the spat with Coal India. “We keep on fighting, and it is of no use.”

Mafia-run unions demand a “goon tax,” a fixed price per tonne paid before coal is loaded onto trucks or trains, the Jharkhand power-company manager said. One coal trader told Reuters that bribes add up to 20 percent to the cost of a tonne of quality coal.

Private buyers who want to buy coal via electronic auctions are locked out of the market. Auction data published in a local newspaper show that some lots of coal at mafia-dominated pits are sold at the auction floor price – well below market rates.

“The mafia doesn’t let people participate in the tender process,” the power plant manager said. “Even if you win the tender, the local mafia won’t let you lift the coal.”

TARGETING SINGH MANSION

When Suman Gupta rolled into Dhanbad in 2009 as the new police chief, she immediately put Singh Mansion on the defensive. Police under her watch searched cars for weapons by day, and using a network of informants, conducted raids on illegal truck-loads of coal at night.

She filed cases against Singh Mansion members, including charges of extorting coal merchants, but said she was unable to stamp out a system that involved politicians and mining officials. She was transferred after just two years as the Dhanbad police chief. News of her transfer sparked protests in the city.

“I know (who the mafia were), but I couldn’t take any action against them, because they’re politically well-connected. They have financial power,” Gupta said in an interview at her new posting in the city of Hazaribagh, which also lies in the coal belt.

She said that over the decades, Singh Mansion built close ties to officials at BCCL, the Coal India subsidiary, who provided cover for the illicit business. BCCL could itself make a huge dent in the problem of illegal mining simply by putting fences around the mines and stationing guards there, she said.

“We have registered many (police reports) against BCCL officials who were responsible for stopping this illegal mining, but they did not,” said Gupta. “There are many things they are supposed to do, but they are not doing it.”

Lahiry, the BCCL chairman, said his crackdown on ties to Singh Mansion was forceful. “Now a clear-cut message has been sent to everybody… that the company comes first, and the priority is the company’s interest.”

ECONOMIC IMPACT

The mafia also reduces productivity with labour stoppages. One senior BCCL official in Dhanbad said stoppages alone by one suspected mafia boss restrained output at some collieries by 10 percent.

The exact economic impact of the coal mafia is hard to quantify; no comprehensive studies exist. A coal ministry tender to conduct the first investigation into the economic impact of criminal activities in the coal fields collapsed when no consultants bid for the contract. One research group said it decided not to bid because it was too dangerous for its staff.

Other issues bedevil Coal India – snarly regulations, enormous difficulty in acquiring land for mining, a shortage of railway lines to move product. But corruption is so widespread, Jaiswal told Reuters, that just cleaning up the system would raise official output by at least 15 percent.

That won’t be easy. Coal-industry executives say that even if they root out the established coal mafia, newcomers are waiting in the wings.

ANOTHER COAL KING

Walls in and around Dhanbad feature a scrawled new slogan that is shaking up the old mafia order: “Long live Dhulu Mahto.”

Like the founder of Singh Mansion, Mahto is a state legislator who started from humble beginnings as a coal worker and then union boss. He is the champion of a new class of rootless workers who don’t work for the big coal companies. Their ranks have steadily grown as the coal companies lease out their pits to private companies, who in turn look for contract workers.

People in Dhanbad call him “new mafia.” His influence falls over mines that produce a third of BCCL’s production, a senior BCCL official in the area said. Some mines would produce at least 10 percent more coal if Mahto, 37, were to stop leading labour strikes, the official said.

A recent public-interest suit filed in the Jharkhand high court by advocate Somnath Chatterjee sought an official inquiry into the source of Mahto’s wealth, which the suit estimated at $36 million.

Mahto denied he was a gangster and said accusations he was involved in the illegal coal trade were politically motivated.

“We don’t want to be kings,” he said, grinning broadly and surrounded by supporters at his mansion overlooking an abandoned pit outside Dhanbad. “We just want to serve.”

(Additional reporting by Malini Menon, Prashant Mehra and John Chalmers; Editing by Bill Tarrant and Michael Williams)

He was a wealthy coal trader, a politician and, police say, a crime boss. At the time of the shooting, Singh had 14 criminal charges against him, including one for homicide. His career and murder are emblematic of one of India’s most nagging economic problems: the corruption that cripples the crucial coal industry.

The shooting was the latest gangland killing between rival coal clans, both with the surname Singh. They have fought for years to control rackets that prey upon the coal industry in the impoverished state of Jharkhand in eastern India, home to some of the nation’s biggest mines. The rackets include controlling unions and transport, manipulating coal auctions, extortion, bribery and outright theft of coal. Popularly known as the “coal mafia,” their tentacles even reach into state-run Coal India, the world’s largest coal miner, its chairman told Reuters.

On a series of trips to the region, Reuters found widespread plunder in India’s coal country that contributes substantially to chronic shortages of a commodity fuelling over half the power generation in Asia’s third-largest economy.

It is a murky subculture that entwines the coal mafia, police, poor villagers, politicians, unions and Coal India officials. Coal workers pay a cut to crime bosses to join their unions, which control access to jobs, according to law-enforcement and industry officials. Unions demand a “goon tax” from buyers, a fixed fee per tonne (1 metric ton = 1.102 tonnes), before loading their coal. Buyers must bribe mining companies to get decent-quality coal. The mafia pays off company officials, police, politicians and bureaucrats to mine or transport coal illegally.

In a startling admission, Coal India Chairman S. Narsing Rao said he knows some of his officials are involved in stealing coal but his company can’t control what happens once trucks leave the mine gate.

“Obviously it happens with the connivance of our own guys, in collusion with our own guys,” he said in an interview.

Rao estimated the scams cost his company, which has a near-monopoly, about 5 percent of its 450 million tonne annual output. Two senior police officials in Jharkhand said the real figure is between a fifth and half the production at some mines.

Corruption, crime and waste in the economy exact a heavy toll on the economy. Recently built power stations stand idle across India, mainly for lack of coal. Last July, the world’s most severe blackout shut off power in half of India, home to 1.2 billion people.

Increasingly, power companies are turning to imports as domestic output lags demand. Yet India sits on the world’s fifth-largest coal reserves, which the government says could supply the nation’s energy needs for decades. Coal imports have tripled in a decade to some $1.5 billion a year. The International Energy Agency expects imports to rise faster in India than anywhere else, as consumption overtakes that of the United States by 2017.

National political leaders promise action – but at the same time throw up their hands.

Coal Minister Sriprakash Jaiswal said in an interview that the Central Bureau of Investigation, akin to the U.S. Federal Bureau of Investigation, was taking a larger role in tackling the mafia, but emphasized it was mainly up to state governments to tackle crime.

“There is no doubt that coal mafias are active. We accept that coal theft happens. But law and order are state subjects,” Jaiswal said. “I won’t say that the state governments do not cooperate. But the system there is so weak, policing is weak.”

SINGH MANSION

Suresh Singh seemed relaxed at the December 8, 2011, wedding party of a local hotelier’s son, police and a witness said. His bodyguards were unarmed.

A high-school dropout with a long police record, the 48-year-old Suresh thought the old gang ways were becoming outdated in the “Shining India” of today, a source close to the family said. He had even sent his son to England to study banking.

After the bullets flew, Suresh’s bodyguards drove him to a hospital, where he died 30 minutes later. His father filed a police report saying his son, in a dying declaration, had named three people responsible for the attack – Sashi, Sanjeev and Ramadhir Singh, from a rival family known as “Singh Mansion.”

Eleven witnesses also named Sashi as the shooter, according to the police report.

“The moment Suresh got up to leave the party, Sashi stood up, walked towards him and shot him seven times,” said Ravi Thakur, the police officer in charge of the investigation.

The victim and his alleged attackers were rivals in business and local politics. Suresh was twice an unsuccessful candidate for India’s ruling Congress party in elections marred by violence. The mother of the accused gunman, Sashi, is the mayor of Dhanbad. Sashi is still at large, having fled across state lines, police said. No charges have been filed against the other accused individuals.

Police have differing versions of why Sashi would have shot Suresh. Thakur says he is investigating the case as a premeditated shooting, either in revenge for a previous murder or over their conflicting business interests. Another police officer and people in Dhanbad say an insult was the trigger.

Sashi’s cousin Sanjeev, the young heir to the Singh Mansion dynasty, is also a named suspect in the murder, though he was not at the wedding party. He was in hiding for months before returning to Dhanbad last September. Now he rides the streets of the coal capital with 20 men and an armed police escort in a convoy of white SUVs.

“Today, Suresh is not here, but it doesn’t mean I don’t have any more rivals who wish to kill me,” Sanjeev said in an interview.

Sanjeev is expected to run in the next state assembly elections as a candidate for the opposition Bharatiya Janata Party (BJP) in Jharia, party members told Reuters. Sanjeev declined to confirm that.

In a two-hour interview over tea and samosas at the orange-walled mansion in Dhanbad that gave the family business its name, Sanjeev denied he or his family were involved in Suresh’s murder. But he spoke extensively about their feud.

Sanjeev’s father started Singh Mansion in the early 1970s, having risen from coal worker to union boss and state legislator. He counted the late Prime Minister Chandra Shekhar, who once spent a weekend at the mansion, as a friend, Sanjeev recalled.

The father’s power and business were based on the labor union he controlled and which remains a bastion of the Singh Mansion enterprise. It is empowered to bargain collectively for workers at Bharat Coking Coal Limited (BCCL), a Coal India subsidiary. Police say Singh Mansion uses the union to control and extract bribes from coal transporters.

The feud began in the 1990s, when Suresh began to compete with Singh Mansion at coal auctions, Sanjeev said. The auctions are a key focus for crime syndicates, police say. Mafia-controlled unions will sometimes refuse to load coal bought by anyone else. That usually ensures the syndicates are the only bidders and keeps auction prices low, said a person with close knowledge of Suresh Singh’s affairs.

The union controlled by Singh Mansion, Janta Mazdoor Sangh, has long exerted influence over BCCL officials, who allow Singh Mansion to run rackets that include theft of coal to sell on the black market and controlling trucks that leave the mines. Sanjeev, who is the general secretary of the union, denied the union was involved in anything illegal.

BCCL’s chairman, T.K. Lahiry, said it is true that when he took over the company four years ago, Singh Mansion’s influence was huge. “Singh Mansion was having entire command and control” over a major area in BCCL’s operations, he told Reuters. “All sorts of anti-social activities were going through that particular office.”

He said he shut down the area office and transferred dozens of influential officials suspected of working for Singh Mansion. BCCL as a whole is making a profit now after years in the red, he said, but he added that only the police could put an end to the coal rackets.

BLIGHTED LANDSCAPE

Decades of lawless coal trading have left their mark everywhere around Dhanbad, where coal dust chokes the sky. Dirt-poor families dig coal under a baking sun in unregulated pits. Thousands of people carry baskets of illegally mined coal atop their heads or by bicycle to mafia-run depots. Many of the trucks that link the mines to the rail yards carry coal mixed with rocks, said a person with family ties to a coal gang. Other trucks are simply not counted as they leave.

At the Kapasara coal-mining operation, owned by Coal India subsidiary Eastern Coalfields Ltd (ECL), villagers dig illegal tunnels alongside licensed earth-moving equipment. Armed police watch indifferently. Illegal miners for years have been digging outward from a huge pit ECL was supposed to have closed and filled with sand. Four years ago, one tunnel collapsed on dozens of miners, killing six.

“This whole place is hollowed out,” said Jatin Mishra, tapping with a stick. He is part of an informal group of residents trying to use right-to-information laws to prove ECL has misspent millions of rupees on contracts to close the tunnels.

The “sand scam” was a big money spinner in the early 1980s for the mafia, and the failure to close illegal mines has made it easier for old fires to spread, the residents’ group said.

ECL Chairman Rakesh Sinha denied that. He said illegal tunnels were filled whenever police notified the company. Illegal mining is rampant, he conceded, due to inadequate policing.

Singh Mansion was among those who received contracts for filling mines with sand, said a senior BJP state official close to the family. “On paper, the mines were filled,” the BJP official said. “But they weren’t.” Sanjeev Singh denied that.

RAILWAY BATTLEGROUND

At a railway siding in Dhanbad, trucks load a train with coal from a nearby pithead. The siding is controlled by Singh Mansion, said a local politician close to Sanjeev’s family. These sidings are a key battleground for mafia gangs across Jharkhand state. Here, their unions extort money from coal buyers and load rocks along with the coal onto the trains, say police and coal-industry officials.

A manager at a state-run power company in Jharkhand that buys coal from Coal India said his plant’s efficiency and costs were harmed by rocks and ash mixed in with the coal. Adulterated coal is now such a major problem that the country’s top power producer, state-run NTPC, has withheld some payments to Coal India, citing quality concerns.

“Mafia in coal is a big issue, they are not addressing these issues,” a senior NTPC official told Reuters when asked about the spat with Coal India. “We keep on fighting, and it is of no use.”

Mafia-run unions demand a “goon tax,” a fixed price per tonne paid before coal is loaded onto trucks or trains, the Jharkhand power-company manager said. One coal trader told Reuters that bribes add up to 20 percent to the cost of a tonne of quality coal.

Private buyers who want to buy coal via electronic auctions are locked out of the market. Auction data published in a local newspaper show that some lots of coal at mafia-dominated pits are sold at the auction floor price – well below market rates.

“The mafia doesn’t let people participate in the tender process,” the power plant manager said. “Even if you win the tender, the local mafia won’t let you lift the coal.”

TARGETING SINGH MANSION

When Suman Gupta rolled into Dhanbad in 2009 as the new police chief, she immediately put Singh Mansion on the defensive. Police under her watch searched cars for weapons by day, and using a network of informants, conducted raids on illegal truck-loads of coal at night.

She filed cases against Singh Mansion members, including charges of extorting coal merchants, but said she was unable to stamp out a system that involved politicians and mining officials. She was transferred after just two years as the Dhanbad police chief. News of her transfer sparked protests in the city.

“I know (who the mafia were), but I couldn’t take any action against them, because they’re politically well-connected. They have financial power,” Gupta said in an interview at her new posting in the city of Hazaribagh, which also lies in the coal belt.

She said that over the decades, Singh Mansion built close ties to officials at BCCL, the Coal India subsidiary, who provided cover for the illicit business. BCCL could itself make a huge dent in the problem of illegal mining simply by putting fences around the mines and stationing guards there, she said.

“We have registered many (police reports) against BCCL officials who were responsible for stopping this illegal mining, but they did not,” said Gupta. “There are many things they are supposed to do, but they are not doing it.”

Lahiry, the BCCL chairman, said his crackdown on ties to Singh Mansion was forceful. “Now a clear-cut message has been sent to everybody… that the company comes first, and the priority is the company’s interest.”

ECONOMIC IMPACT

The mafia also reduces productivity with labor stoppages. One senior BCCL official in Dhanbad said stoppages alone by one suspected mafia boss restrained output at some collieries by 10 percent.

The exact economic impact of the coal mafia is hard to quantify; no comprehensive studies exist. A coal ministry tender to conduct the first investigation into the economic impact of criminal activities in the coal fields collapsed when no consultants bid for the contract. One research group said it decided not to bid because it was too dangerous for its staff.

Other issues bedevil Coal India – snarly regulations, enormous difficulty in acquiring land for mining, a shortage of railway lines to move product. But corruption is so widespread, Jaiswal told Reuters, that just cleaning up the system would raise official output by at least 15 percent.

That won’t be easy. Coal-industry executives say that even if they root out the established coal mafia, newcomers are waiting in the wings.

ANOTHER COAL KING

Walls in and around Dhanbad feature a scrawled new slogan that is shaking up the old mafia order: “Long live Dhulu Mahto.”

Like the founder of Singh Mansion, Mahto is a state legislator who started from humble beginnings as a coal worker and then union boss. He is the champion of a new class of rootless workers who don’t work for the big coal companies. Their ranks have steadily grown as the coal companies lease out their pits to private companies, who in turn look for contract workers.

People in Dhanbad call him “new mafia.” His influence falls over mines that produce a third of BCCL’s production, a senior BCCL official in the area said. Some mines would produce at least 10 percent more coal if Mahto, 37, were to stop leading labor strikes, the official said.

A recent public-interest suit filed in the Jharkhand high court by advocate Somnath Chatterjee sought an official inquiry into the source of Mahto’s wealth, which the suit estimated at $36 million.

Mahto denied he was a gangster and said accusations he was involved in the illegal coal trade were politically motivated.

“We don’t want to be kings,” he said, grinning broadly and surrounded by supporters at his mansion overlooking an abandoned pit outside Dhanbad. “We just want to serve.”

(Additional reporting by Malini Menon, Prashant Mehra and John Chalmers; Editing by Bill Tarrant and Michael Williams)

The finding was a new blow for a government battered by a seemingly unending series of corruption scandals, and overshadowed a rare election victory for the ruling party in Karnataka.

The CBI, India’s answer to the American FBI, is investigating alleged irregularities in the awarding of mining rights potentially worth billions of dollars to private companies. The opposition has demanded the resignation of Prime Minister Manmohan Singh, who was coal minister for some of the period under investigation.

The uproar over the “Coalgate” scandal forced the government to cut short a parliamentary session on Wednesday devoted to the budget and shelve, for now, key economic reforms and flagship legislation to give cheap food to millions more people.

Singh’s fragile coalition has been ruling as a minority government since two allies pulled out. The drama will only intensify speculation over whether it will limp on or call an election, otherwise due by May 2014, before the end of the year.

BUREAU UNDER FIRE

The CBI has been under fire since its director, Ranjit Sinha, told the Supreme Court last week that Law Minister Ashwani Kumar and other senior officials, including one from the prime minister’s office, had amended a report that the court had requested on the CBI’s Coalgate investigation.

This week, Sinha said no major changes had been made, but on Wednesday the Supreme Court disagreed.

“The heart of the report was changed on the suggestions of government officials,” Judge R.M. Lodha said, ordering the CBI not to share any further reports during the investigation and urging the government to strengthen the agency’s independence.

“The CBI has become the state’s parrot. Only screaming, repeating the master’s voice,” Lodha said.

The court was hearing a petition by anti-corruption campaigner Prashant Bhushan to have the investigation transferred from the CBI to a Supreme Court-monitored team. Bhushan has said the agency lacks the independence to investigate “Coalgate” properly.

The court was scathing about the lack of progress in the investigation, which began last year, and ordered the CBI to replace the officer in charge of the inquiry, which is focusing on a number of private companies and Coal Ministry officials.

FIGHTING POWER CUTS

Between 2004 and 2009, India, which has the world’s fifth largest reserves of coal, allocated 142 mining blocks through a government panel, in a bid to boost electricity production and reduce the chronic power cuts that have held back the economy.

The auditor general last year questioned the decision not to auction the blocks, leading the CBI to investigate possible collusion by officials to give blocks at low prices to companies, some of which never developed them.

The Congress-led coalition, in power since 2004, has been on the back foot over a raft of scandals over the allocation of billions of dollars’ worth of military contracts and resources ranging from coal to mobile telephone spectrum.

Ironically, Congress won a resounding election victory in Karnataka state in part because of voter fury at corruption during five years of Bharatiya Janata Party (BJP) rule.

Election commission results showed Congress had won at least 118 of 223 seats in Sunday’s vote – a rare bright spot for the party. It is expected to do less well in at least four other state elections scheduled for this year.

The vote in Karnataka, home to the IT city Bangalore, was widely seen as a barometer of anger at the “crony capitalism” that has plagued India’s economic boom in the past decade.

(Additional reporting by Satarupa Bhattacharjya, Anurag Kotoky and Nigam Prusty in NEW DELHI and Abhiram Nandakumar and Zeba Siddiqui n BANGALORE; Editing by Ross Colvin and Kevin Liffey)

The finding was a new blow for a government battered by a seemingly unending series of corruption scandals, and overshadowed a rare election victory for the ruling party in the southern state of Karnataka.

The Central Bureau of Investigation (CBI), India’s answer to the American FBI, is investigating alleged irregularities in the awarding of mining rights potentially worth billions of dollars to private companies. The opposition has demanded the resignation of Prime Minister Manmohan Singh, who was coal minister for some of the period under investigation.

The uproar over the “Coalgate” scandal forced the government to cut short a parliamentary session on Wednesday devoted to the budget and shelve, for now, key economic reforms and flagship legislation to give cheap food to millions more people.

Singh’s fragile coalition has been ruling as a minority government since two allies pulled out. The drama will only intensify speculation over whether it will limp on or call an election, otherwise due by May 2014, before the end of the year.

BUREAU UNDER FIRE

The CBI has been under fire since its director, Ranjit Sinha, told the Supreme Court last week that Law Minister Ashwani Kumar and other senior officials, including one from the prime minister’s office, had amended a report that the court had requested on the CBI’s Coalgate investigation.

This week, Sinha said no major changes had been made, but on Wednesday the Supreme Court disagreed.

“The heart of the report was changed on the suggestions of government officials,” Judge R.M. Lodha said, ordering the CBI not to share any further reports during the investigation and urging the government to strengthen the agency’s independence.

“The CBI has become the state’s parrot. Only screaming, repeating the master’s voice,” Lodha said.

The court was hearing a petition by anti-corruption campaigner Prashant Bhushan to have the investigation transferred from the CBI to a Supreme Court-monitored team. Bhushan has said the agency lacks the independence to investigate “Coalgate” properly.

The court was scathing about the lack of progress in the investigation, which began last year, and ordered the CBI to replace the officer in charge of the inquiry, which is focusing on a number of private companies and Coal Ministry officials.

FIGHTING POWER CUTS

Between 2004 and 2009, India, which has the world’s fifth largest reserves of coal, allocated 142 mining blocks through a government panel, in a bid to boost electricity production and reduce the chronic power cuts that have held back the economy.

India’s auditor general last year questioned the decision not to auction the blocks, leading the CBI to investigate possible collusion by officials to give blocks at low prices to companies, some of which never developed them.

The Congress-led coalition, in power since 2004, has been on the back foot over a raft of scandals over the allocation of billions of dollars’ worth of military contracts and resources ranging from coal to mobile telephone spectrum.

Ironically, Congress won a resounding election victory in Karnataka state in part because of voter fury at corruption during five years of Bharatiya Janata Party (BJP) rule.

Election commission results showed Congress had won at least 118 of 223 seats in Sunday’s vote – a rare bright spot for the party. It is expected to do less well in at least four other state elections scheduled for this year.

The vote in Karnataka, home to the IT city Bangalore, was widely seen as a barometer of anger at the “crony capitalism” that has plagued India’s economic boom in the past decade.

(Additional reporting by Satarupa Bhattacharjya, Anurag Kotoky and Nigam Prusty in NEW DELHI and Abhiram Nandakumar and Zeba Siddiqui n BANGALORE; Editing by Ross Colvin and Kevin Liffey)

Election commission results showed the centre-left Congress leading in 113 of 223 seats after Sunday’s vote, ousting the Hindu nationalist Bharatiya Janata Party (BJP) after five years of rule marred by scandal.

Final results were due later on Wednesday.

The win is a bright spot for Congress, which itself is itself on the back foot at the national level over a series of scandals.

In one of the biggest cases, federal police are investigating how the government awarded coal field concessions to private and state companies. Opposition parties say the process was corrupt.

“So many scams, so many scandals, this will be a bit of a booster dose,” said Vinod Sharma, a Congress party expert and a political editor at the Hindustan Times newspaper.

Congress is expected to do less well in at least four other state elections scheduled for this year. General elections are due to be held by May 2014.

Uproar at the coal scandal and another involving a relative of the railway minister obstructed parliament for two weeks, and on Wednesday the speaker cut the current session short by three days.

The mayhem in the lower house meant the Congress party was unable to pass its signature food security bill, which is seen as crucial to the party’s hopes of re-election.

The election in Karnataka was widely seen as a barometer for voter anger at crony capitalism that has plagued India’s economic boom in the past decade.

The BJP’s image in the state was tarnished by a $3 billion illegal mining scandal that ended India’s reign as the world’s third-largest iron-ore exporter. The infighting that ensued toppled two chief ministers in five years.

“Karnataka is a gift from the BJP,” a top leader of the BJP in New Delhi said. He acknowledged that corruption in the state had got out of hand.

But the victory could be a double-edged sword for Congress.

The sign from Karnataka was that voters will punish politicians for perceived plunder. At the national level, the Congress-led coalition has found itself caught up in a raft of scandals over the allocation of resources, from coal to mobile telephone spectrum, and the award of military contracts.

(Additional reporting by Satarupa Bhattacharjya; Editing by Ross Colvin and Nick Macfie)

Election commission results showed the centre-left Congress leading in 113 of 223 seats after Sunday’s vote, ousting the Hindu nationalist Bharatiya Janata Party (BJP) after five years of rule marred by scandal.

Final results were due later on Wednesday.

The win is a bright spot for Congress, which itself is on the back foot at the national level over a series of scandals.

In one of the biggest cases, the Central Bureau of Investigation (CBI) are investigating how the government awarded coal field concessions to private and state companies. Opposition parties say the process was corrupt.

“So many scams, so many scandals, this will be a bit of a booster dose,” said Vinod Sharma, a Congress party expert and a political editor at the Hindustan Times newspaper.

Congress is expected to do less well in at least four other state elections scheduled for this year. General elections are due to be held by May 2014.

Uproar at the coal scandal and another involving a relative of the railway minister obstructed parliament for two weeks, and on Wednesday the speaker cut the current parliament session short by three days.

The mayhem in Lok Sabha meant the Congress was unable to pass its signature food security bill, which is seen as crucial to the party’s hopes of re-election.

The election in Karnataka was widely seen as a barometer for voter anger at crony capitalism that has plagued India’s economic boom in the past decade.

The BJP’s image in the state was tarnished by a $3 billion illegal mining scandal that ended India’s reign as the world’s third-largest iron-ore exporter. The infighting that ensued toppled two chief ministers in five years.

“Karnataka is a gift from the BJP,” a top leader of the BJP in New Delhi said. He acknowledged that corruption in the state had got out of hand.

But the victory could be a double-edged sword for Congress.

The sign from Karnataka was that voters will punish politicians for perceived plunder. At the national level, the Congress-led coalition has found itself caught up in a raft of scandals over the allocation of resources, from coal to mobile telephone spectrum, and the award of military contracts.

(Additional reporting by Satarupa Bhattacharjya; Editing by Ross Colvin and Nick Macfie)