The Coal Scam

The report of the Comptroller and Auditor General of India on allocation of coal blocks and augmentation of coal production for the year ending March 2012 has come out with startling revelations.

The report has estimated that the allocation of coal blocks was not done in a transparent manner and since July 2004, 142 blocks were allocated to various governments and private parties. According to the CAG, these allocations lacked transparency and objectivity.

As a result, the CAG estimates that the private coal block allottees have made a whopping financial gain to the tune of Rs. 1.86 lakh crores. A substantial part of this could have accrued to the national exchequer if the decision taken way back in June 2004 to introduce competitive bidding for such allocations was implemented. The report notes that till date, the government of India has not finalized the modus operendi of competitive bidding.

Coal, like all other natural resources, is a national reserve. Given the fact that many public sector undertakings and state government undertakings and electricity boards require coal for generating power for the people and the economy, the allocation of coal reserves must be done in such a manner as to meet both the need of the governmental agencies and through a transparent and an objective competitive bidding. The CPI(M) had suggested that the reserves should be so proportioned as to meet both these objectives.

Unfortunately, the refusal by the government of the day to heed this suggestion has led to arbitrariness in coal allocations, paving the way for large-scale corruption through `sweet heart’ deals. The loss to the national exchequer is, thus, larger than the presumptive loss estimated by the CAG in the 2G spectrum scam.

The Polit Bureau of the CPI(M) demands that the Prime Minister who held the charge of the Coal Ministry for some time when such allocations were made must answer to the Parliament and the nation why the modus operendi for transparent allocations was not worked out. All those guilty of siphoning off huge resources must be identified and brought to book. Strict monitoring and guidelines for the future must be announced with Parliament’s approval.