Welcome ruling

The Supreme Court’s ruling that all the coal block allocations made by successive governments since 1993 are illegal was not unexpected.

The mass of evidence that came into the public realm in the wake of disclosures about the arbitrary and ad hoc allocations and the Comptroller and Auditor-General’s much-discussed 2012 report which found that the UPA government’s allocations had caused a loss of Rs 1.86 lakh crore to the exchequer had made clear the methods of wrong-doing to everybody.

They had also revealed the identities of the undeserving beneficiaries and the benefactors. The attempts made to avert or abort investigations into the charges were further proof of the involvement of those in high echelons of power in the scam. It was clear that no good norms and guidelines were followed in the use of national resources and that personal and political connections were the basis of allocations.

Though most of the illegal allocations took place when the UPA government was in power, all governments in the last over 20 years have been guilty of arbitrary decisions. That is an indictment of all past governments, including the previous NDA government. 

The judgment is welcome because it highlights the need for fair and transparent procedures in the handling of resources and in the adoption of the best practices of governance by those who wield power. The screening committee which made recommendations for allocation did not have statutory support.  In any case, its recommendations were also not always followed by the governments. 


The court’s ruling can also be seen as a warning about the possible consequences of illegal action, coming as it does after its 2012 ruling which cancelled 122 wrongly awarded telecom licences.


The court will do the necessary follow-up of its ruling next week. Not all the allocated blocks are functional. About 40 of them are producing coal which account for about 10 per cent of the country’s total output. So, cancellation of allocations may cause serious disruptions and so may not be an option. But penalties may be imposed, which should bring the windfall gains of beneficiaries back to the exchequer.

Those who took the wrong and illegal decisions should be brought to book too. The country needs a clean and transparent policy on allocation of resources like coal blocks, with public auctions remaining a good option to maximise returns and to ensure fair and equal treatment to all. The ruling underlines that again.

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