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

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
despite having given an in-principle approval to it within the first six months
of his tenure as prime minister.

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