Joint statement : Smt. Sushma Swaraj and Shri Arun Jaitley on the CAG report on the allocation of Coal blocks

Joint statement issued by Smt. Sushma Swaraj, Leader of Opposition (Lok Sabha) and Shri Arun Jaitley, Leader of Opposition (Rajya Sabha) on the CAG report on the allocation of Coal blocks and augmentation of Coal production

The Comptroller and Auditor General of India’s report on the allocation of coal blocks and augmentation of coal production has been belatedly placed before the Parliament today. The report represents a mix of the policy paralysis, inefficiency being used for a corrupt and collateral motive by the UPA Government. It is this mix which has caused, according to the CAG, a wrongful loss of Rs. 1,86,000 Crores to the Public Exchequer.

The report establishes that the concept of competitive bidding for Coal blocks was first conceived on 28^th June 2004. It has been put in to practice after notification only on 2^nd February 2012. To give effect to a policy itself, 8 years have lapsed. During this period of 8 years from 24^th July 2004 till May 2009, for a period of 5 years , the Prime Minister Dr. Manmohan Singh himself was the coal Minister.

Why did this delay take place?

The first two years were spent in processing the concept of competitive bidding. The Prime Minister’s Office (PMO) on 11^th September 2004 sabotaged the proposal by initiating a note by highlighting the difficulties of allocation of coal blocks in competitive bidding. This note was intended to favour those who were beneficiaries of a discretionary system of allotment and making windfall gains.

The delay was caused by the Department of Legal Affairs which initially stated that it was possible to go for competitive bidding by mere administrative instructions without amending the Mines and Minerals ( Regulation & Development ) Act. Subsequently the Department of Legal Affairs changed its view and insisted on an amendment to the Law being necessary to introduce competitive bidding.

Even though on 15^th September 2006 , it was decided to introduce an legislative amendment , it took 25 months till `17^th October 2008 to prepare a draft of the amendment.

Even though amendments were approved on 9^th September 2010 by both Hoses of Parliament, it took almost one and half years for the Government to notify them on 2^nd February 2012.

This 8 years delay envisaged allocation of 142 coal blocks being allotted  out of which 67 were allotted to government companies and 75 to  private companies. The distinction between the price at which Coal India used to mine and the price at which the private players were mining has resulted in a windfall profit of Rs. 1,86,000 Crores to the private players.

The UPA Government has been accused of delays, indecisiveness, lack of leadership in economic decision making leading to policy paralysis. Here is a text book case of 8 years being spent for a major policy reform being implemented. It caused wrongful loss to the Government and windfall gain to the private parties. The CAG report as per the Parliamentary procedure would be considered by the Public Accounts Committee. The facts leading to delay are incontrovertible. 5 out of the 8 years period of delay, The Prime Minister himself was the Coal Minister. He is morally, politically and personally responsible for this wrongful loss. He must seriously introspect on accepting the moral responsibility for this loss and quitting his office as the loss of Rs. 186000 Crores to the public exchequer was on account of delays caused by him.

(R.K. Sinha)
Secretary
BJP Parliamentary Party