New Delhi: The Indian
exchequer could have earned Rs.1.85 lakh crore ($37 billion) more
if a competitive bidding process was followed in the award of coal
blocks to private and government players, the official auditor has
said in its report released Friday.
But the government has termed as erroneous the back-of-the-envelop
calculation of the losses -- which nearly amounts to the country's
budgeted income tax and customs mop up of Rs.1.95 lakh crore and
Rs.1.86 lakh crore, respectively, for this fiscal.
The Comptroller and Auditor General of India (CAG), in its report
tabled in parliament said the losses occurred because the process
of bringing transparency in the award of coal blocks, which was to
commence in June 2004, got delayed due to various reasons.
"In the meantime, 194 net coal blocks, with aggregate of 44,440
million tonnes, were allocated to different government and private
parties up to March 31, 2011," said the much-awaited report, that
has embarrassed the government once again.
"The government could have tapped part of this financial benefit
by expediting decision on competitive biding for allocation of
coal blocks," the report added, while observing that most
allocations were made on the basis of recommendations from state
"This is not just a scam, it is a case of murder and loot. We
would like an answer from the prime minister," said Bharatiya
Janata Party (BJP) spokesperson Rajiv Pratap Rudy. The report,
though, does not indict Prime Minister Manmohan Singh or his
The report will now go to parliament's Public Accounts Committee,
headed by BJP's senior leader Murli Manohar Joshi, for a thorough
study. "In this government, there are scams in the skies, on the
ground, and underground," Joshi said.
But Minister of State for Parliamentary Affairs V. Narayanasamy
slammed the report and said the auditor was not following the
mandate. "Evidence will be taken and ultimately result will come,"
he said, alluding that the government was still to be heard.
In the report, the auditor has also recommended immediate steps to
allot mines through a competitive bidding process in a bid to
bring about objectivity and transparency in the process and in the
larger context of power for all this year.
The audit report also names 25 companies that were beneficiaries,
including Essar Power, Jindal Steel and Power, Hindalco and Tata
Power, DB Power, Adani Power, CESC, Monnet Ispat, Rungta Mines,
Mukund and Tata Steel.
In a previous report tabled two years ago -- on the award of
scarce telecom spectrum, or airwaves, to new private players in
2008 -- the official auditor had estimated the losses to the
exchequer at Rs.1.76 lakh crore.
In its recommendations on how the government should in the future
go about awarding captive coal mines to private and state-owned
players, the auditor has suggested the setting up of an empowered
group on the lines of the Foreign Investment Promotion Board.
This group, with representatives from nodal ministries of central
and state governments, could act like a single-window mechanism to
grant clearances for mining leases, forest clearance plan,
environment management plan and land acquisition, says the
This, it said, was paramount since the need for electricity was
crucial for the economic development of the country, as also in
the context of the government's earlier declared objective of
power to all by 2012.