CAG blackens UPA II with coal

Favouring private companies cost country Rs 3.78 lakh crore

The Comptroller and Auditor General (CAG) of India laid bare the manner in which the biggest-ever loot of India’s scarce natural resources took place in its report tabled in Parliament on Friday, when it emphasised that opaque bidding process of coal mining cost the nation a whopping Rs 1.86 lakh crore.

Dealing a blow to the Congress-led UPA government, the CAG, in another report, pointed out that the GMR-led Delhi International Airport Limited was virtually gifted the airport and surrounding land having a potential earning capacity of Rs 1.63 lakh crore. In yet another report, it found that the Anil Ambani-run Reliance Power got undue benefit of Rs 29,033 crore as the firm was allowed use of surplus coal from blocks alloted to Sasan power plant for its other projects.

The total notional loss that the exchequer suffered as per the three reports amounted to a massive Rs 3.78 lakh crore.

The CAG performance report on coal points at the decision-making paralysis the Prime Minister’s Office perennially suffers from, which has led to the UPA being rocked with series of scams.

Sensing an opportunity to erode UPA government’s credibility, BJP’s Leader of Opposition in the Lok Sabha Sushma Swaraj told reporters: “We want the prime minister to resign, but there is no need of a JPC”.

Leader of Opposition in the Rajya Sabha Arun Jaitley, who jointly held the press briefing in Parliament, said the prime minister was “directly, politically and morally” responsible for the windfall to private parties as his government failed to allow competitive bidding for the coal blocks from 2004 to 2012. But, Coal Minister Sriprakash Jaiswal seemed unperturbed as he trashed the findings of the CAG report on coal block allocation.

Interestingly, while shielding the government, he ended up shifting the blame to former law minister HR Bhardwaj, who is now Karnataka Governor, and non-Congress ruled states for giving three different opinions.

The rip-off scripts unraveled successively by the CAG is almost the same – whether it was 2G scam, or in case of the CWG scam and now in coal block allocation scam.  The CAG report, too, refers to the Supreme Court judgment on 2G scam, where the Bench had directed the government to introduce transparency and competition in allocation of scarce natural resources.

The warnings on the irregularities in the scheme by officials in different cases were ignored owing to deep-rooted politician-babu-corporate nexus. Till June 2004, 39 coal blocks were allocated by the ministry on the basis of decisions of screening committee which evaluated applications without having a transparent blueprint.

Surprisingly, the ministry continued to hand over 71 more blocks till September 2006 in total disregard for the need to bring in transparent regime for allocation through competitive bidding. Of the total, 49 blocks were given to the PSUs and other government departments but the scam happened in giving 57 slabs to the Private companies, including Tata Steel, Essar Power, JSPL, Hindalco, Bhushan Steel, Arcelor Mittal India and Adani Power.

The financial gains of Rs 1.86 lakh crore happened in allocation of 57 “open cast” and “mixed” mines to private parties, the CAG report said ignoring the ministry’s reply that the allocation was never looked “as potential source for the Central government but with the intent to induce rapid development of infrastructure.”

A month after taking over the power, the UPA I made public on June 28, 2004 , the shift in concept of allocation of captive coal blocks from merely getting recommendation letter from states or ministries to competitive bidding, a process that did not rule out auction.

Prime Minister Manmohan Singh doubled up as the coal minister for five years. This began when Shibu Soren resigned from the coal ministry in 2004, owing to the arrest warrant issued against him in a murder case. But, since the last eight years, the UPA government  continued to allocate the blocks in an arbitrary manner as the CAG itself points that there was nothing on record to suggest how the screening committee evaluated applicants.