Coal Block Scam: Read fining Corruption: Civil Services Mentor Magazine October 2012

Coal Block Scam: Read fining Corruption

It seems that this UPA Govt. is breaking all its record on the corruption front, by every passing day it is coming up with a new kind of scam and breaking its own record. In one sentence we can say this govt. is redefining corruption in golden letters. The Comptroller and Auditor General of India (CAG) said in a report submitted to Parliament that an estimated financial gain of Rs 1.86 trillion was made by private allottees that were given coal blocks by the ministry of coal. The report said the ministry of coal should urgently go forward with competitive bidding for captive coal blocks mining. From 2004 to 2009, 85 coal blocks were allocated to 137 private companies, according to the coal ministry data, and several of them are under the scanner, officials have said.

More than 80 percent of the allottees have not yet started producing coal from their respective blocks. This led to a bizarre scenario where on the one hand, the government acted with unprecedented haste in allocating these blocks, and on the other, it did precious little to ensure that the allottees started producing coal from their respective mines and used it for the designated end use like producing power, steel, cement, etc. The government has now set up a committee to identify how many operators have deliberately defaulted in starting the coal production work and how many got stuck on account of bona fide delays in land acquisition, forest and environmental clearance or approval of mining plan. The biggest rationale of the government behind captive coal block allocation was to enhance domestic coal production capacity.

The country’s top auditor has put corruption squarely back on the national agenda, potentially compounding the political problems facing the Congress-led United Progressive Alliance (UPA) government. In three separate reports, quantifying the notional loss to the exchequer at Rs.3.03 trillion, the Comptroller and Auditor General of India (CAG) has, for the first time, directly cast aspersions on the role of the Prime Minister’s Office (PMO) for its failure to check what it claims to be violations in awarding coal mining contracts.

The issue of allocation of natural resources has been at the centre of the debate on corruption. From the Supreme Court to the Comptroller and Auditor General (CAG) to anti-corruption crusaders  like Team Anna, all have slammed the UPA for allocating precious natural resources like 2G spectrum, minerals and land to private hands at a fraction of their market price. It was the CAG that had first exposed how the telecom policy was manipulated to favour select companies at the cost of public interest. A new CAG report, this time on coal block allocation, has put the spotlight on Prime Minister Manmohan Singh for alleged corrupt policy-making, causing a revenue loss of several thousands of crores of rupees. Politically, the coal allocation scam has far greater implications for the UPA than the 2G swindle. During the five years of UPA-1, Manmohan Singh was also the coal minister for about three and a half years. The junior minister in the coal ministry was always a Congressman. Yet the PM failed to introduce the policy of competitive bidding for captive coal block allocations,
despite having given an in-principle approval to it within the first six months of his tenure as prime minister.