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CAG coal mine report: Govt lost Rs 10.67 lakh cr by giving 'undue benefits' to firms

UPA government is facing heat over allotment of coal blocks that allegedly gave 'undue benefits' to scores of companies, causing a huge loss of Rs.10.67 lakh crore to the nation's exchequer.

BT Online Bureau | March 22, 2012 | Updated 16:02 IST

The UPA government is again embroiled in a scandal. This time it is related to allotment of coal blocks that gave 'undue benefits' to scores of companies causing a huge loss of Rs 10.67 lakh crore to the nation's exchequer. The Comptroller & Auditor General (CAG) in its draft report on coal mining has accused the Central government of incurring the mammoth loss by not auctioning the coal blocks.
According to a media report, the CAG's draft report said that the government benefited private and public sector companies by allocating them 155 coal blocks without auction between 2004-2009.

Opposition parties reacted with outrage in Parliament on Thursday to the CAG report leaked in a prominent daily. The House session was briefly adjourned and the government said it would respond once it had verified the facts.

Meanwhile, reacting to the media reports Coal Minister Sriprakash Jaiswal said the government followed a transparent process in giving mining rights to the firms.

"We gave advertisements for allocation of coal blocks and invited applications...after the applications were received by us (Coal Ministry), the state governments were consulted and thereafter the coal blocks were allocated," Coal Minister Sriprakash Jaiswal said.

"The coal blocks are allocated through a screening committee which is chaired by Coal Secretary," he said, when asked to comment on media reports that Comptroller and Auditor General (CAG) in its draft report said that the government lost Rs 10.67 lakh crore by not auctioning coal blocks.

Jaiswal also said he did not receive any such report from CAG. "We did not receive any report of CAG then how can we say whether its report is right or not," he said.

Jaiswal, however, said that the UPA-I started the practice of awarded coal blocks through advertisements, discontinuing the earlier practice.

He said that between 1993 and 2004 scores of coal blocks were awarded without issuing any advertisements. .

The proposal for allocation of coal blocks through competitive bidding was mooted for the first time a couple of years ago. The government is framing guidelines and rules for the proposed competitive bidding for auction of coal blocks.

"The guidelines on coal block... are currently being examined. Views are also being sought from the concerned ministries on this and when the guidelines are ready then process of coal blocks auction would begin," Jaiswal said.

He expressed optimism that the guidelines on coal blocks auction would be ready in two to four months.

Minister of State for Coal Shripratik Prakashbapu Patil had earlier said in the Lok Sabha that around 111 coal blocks have been allocated to various public/private sector companies from 1993-2006. Out this 111 coal blocks, 29 have started production.

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