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coal allocation scam

Another scam in a history of Indian. Coal mining controversy is major fraud in

2012, which involved Rs 1,86,000 Cr loss to exchequer . This is serious allegation
against Prime Minister of India Dr Manmohan Singh who is in a serious scrutiny
of the CAG which leads to protest against the leading political party NCP and
Prime Minister Dr. Manmohan Singh asking for his resignation.
Social activist Arvind Kajrewal and IAC(India against corruption) activist marched
to the Prime Minister, Congress and Bhartiya Janata partys members residence in
Delhi. The Police had to use tear gas and water cannons to prevent crowd entering
in these residences
The CAG report claiming loss of 1,86,000 to national exchequer by not ensuring
transparency during the period of 2004-2009. The Controller and Audit General
(CAG) has arrived estimated loss based on the average cost of production and sale
price of open cast mines of Coal India during 2010-2011. The PMO also suspected
for delaying a decision on competitive bidding which is under Regulation and
Development Act 1957 which could have been implemented way back in 2006.
The process of competitive bidding was initiated way back in 2006-09, after
correspondence amount various ministers for 2 years the later it was dropped
though Development of legal Affairs and law secretory of the time stood against
the decision.
One of the biggest beneficiary of the coal allocation is Anil Ambanis Reliance
Power Limited(RPL). Un November 2007, Madhya Pradesh Chief Minister Shivraj
Singh Chauhan requested Prime Minister to RPL to use the surplus coal of captive
blocks of Sasan Plant. The recommendation of Empowered group of Minister was
considered and it was granted , the decision resulted in a benefit Rs 29,033 Crore
with a net present value (NPV) 11,852 crore to the project developer. The reort
says 25 firms including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal
steel and power gained Rs 1.86 crore from coal allocation.
The coal allocation scam resulted in a deadlock in the parliament Loksabha as well
as Rajhasabha for four consecutive days. BJP Leader Sushma swaraj and Arun
Jeithely arguned that since Dr Singh was in charge of coal mining during this
period and he should take moral responsibility of the Coalgate scam and resign
from the post. Advocate M.L Sharma have filed a Public Interest Litigation (PIL)
in the supreme court seeing for cancellation of 194 blocks based on illegality and
unconstitutionality. As a result of this litigation, the Supreme Court of India, in its
September 2012 hearing has ordered the government in power on basis of not
following policy of competitive bidding for coal allocation. The interminister
group (IMC) has recommended de-allocation of 4 coal block.
Union Coal Minister Saipradad Jaiswal along with UPA leaders rejected the CAG
report. According to Union coal minister the policy which adopted for coal
allocation blocks was not faulty. The CAG report is based on few aspect of the
coal allocation. The Prime minister of India Dr. Manmohan Singh in his defect
made statement regarding First CAG charge to parliament directly instead of
discussing with PAC (Public Account committee) addressing the finding of the
Final CAG report. Hereafter Primer Ministers statement.
Stretching 32 points paragraph, Singhs main argument makes below main points
-Firstly, computation of extractable reserves based on averages would not be
- Secondly, the cost of production of coal varies significantly from mine to mine
even for CIL due to varying geo-mining conditions, method of extraction, surface
features, number of settlements, availability of infrastructure etc.
- Thirdly, CIL has been generally mining coal in areas with better infrastructure
and more favorable mining conditions, whereas the coal blocks offered for captive
mining are generally located in areas with more difficult geological conditions.
-Fourthly, a part of the gains would in any case get appropriated by the government
through taxation and under the MMDR Bill, presently being considered by the
parliament, 26% of the profits earned on coal mining operations would have to be
made available for local area development. Therefore, aggregating the purported
financial gains to private parties merely on the basis of the average production
costs and sale price of CIL could be highly misleading. Moreover, as the coal
blocks were allocated to private companies only for captive purposes for specified
end-uses, it would not be appropriate to link the allocated blocks to the price of
coal set by CIL.
-The major mines and lignite bearing states like West Bengal, Chhattisgarh,
Rajasthan, Jharkhand and Orissa were opposite party were ruling and in opposed to
switch to the process competitive bidding.
Before getting into any conclusion regarding sole responsibility of the scam, we
should have keep in mind all prospective. Since 1993, allocation of captive coal
blocks was being done on the basis of recommendations made by an inter-
Ministerial Screening Committee which also had representatives of State
governments. Allocation of coal blocks to private companies for captive use
commenced in 1993, after the Coal Mines (Nationalisation) Act, 1973 was
amended. This was done with the objective of attracting private investments in
specified end uses
Bhartiya Janata Party whose demanded for resignation of Prime Minister owing the
moral responsibility of scam however BJP should have grabbed the opportunity
UPA governments offer to have discussion on the issue. This can be possibility,
BJP is avoiding the discussion with government because audit report turned out to
be equally guilty unflattering itself. According to CAG report two of them major
states Chhattisgarh and Rajasthan had opposed the competitive bidding. The then
chief minister of Chhattisgarh Dr. Raman Singh wrote a letter to PM saying
bidding in coal blocks would make steel industry unviable and Vasungharah Raje,
past CM of Rajasthan opposed saying it is against Sarkaria commission
Hence, it is clear that not only leading party is involve in the Coalgate scam,
whoever is involved in it one this is for sure, the corruption of India are growing
day by day which is impacting the economy and growth of India. As a citizen of
India, we should choose the wise leader for country, The duty of youth is to
challenge corruption.