In a rare rebuttal, the Comptroller and Auditor General of India (CAG) on Thursday described a newspaper report that it had indicated the government lost Rs. 10.7 lakh crore by not auctioning coal blocks as “exceedingly misleading.” It virtually ruled out any loss to the exchequer.
The “scam” raised a storm in both Houses of Parliament. The uproar created by the Opposition during question hour demanding a transparent inquiry forced the adjournment of the Lok Sabha and the Rajya Sabha.
Later, in a letter to Prime Minister Manmohan Singh, the CAG said the details brought out in the daily were observations which were under discussion at a very preliminary stage. They did not even constitute its pre-final draft and were, therefore, exceedingly misleading.
“Pursuant to [a] clarification provided by the Coal Ministry in exit conferences held on February 9 and March 9, we have changed our thinking… In fact, it is not even our case that the unintended benefit to the allocatee is an equivalent loss to the exchequer. The leak of the initial draft causes great embarrassment as the Audit Report is still under preparation. Such leakage causes very deep anguish,” excerpts of the letter released by the PMO said.
The leaked report quoted the CAG as having estimated a windfall gain of Rs. 6.31 lakh crore (Rs. 3.37 lakh crore to PSUs and Rs. 2.94 lakh crore to the private sector) based on the prices prevailing during the year of allocation on a constant cost and price basis and as on March 31, 2011.
The amount at current prices was Rs. 10.67 lakh crore (PSUs Rs. 5.88 lakh crore and private sector Rs. 4.79 lakh crore).
Interestingly, the Coal Ministry said in June 2004 that there was a substantial difference between the price of coal supplied by Coal India Ltd (CIL) and the cost of coal produced through coal blocks allocated for captive mining. As such, there were windfall gains to the allottees, part of which the government wanted to tap through competitive bidding.
Officials in the Coal Ministry said that the exit conferences held by CAG had led to clarification on a number of issues pertaining to windfall gains. That had led to changes in many of its observations, including the one pertaining to loss to the exchequer.
Keywords: coal scam, CAG audit report, coal blocks allocation
The report is misleading the common man !
The so called scam of coal is an assumption of loss as in 2G scam, if auctioned it would have earned a lot. The CAG does not care about the price raise for the common man or the rising cost of electricity due to pressure on thermal project etc. Now it seems that GOI should take guidance for making its policy and framing budget from CAG or SC to learn how to make profit out of Natural Resources and assets than serving the people. Now it seems that GOI should take guidance for making its policy and framing budget from CAG or SC to learn how to make profit out of Natural Resources and assets than serving the people. The assumptive loss of 10.67 lakh crores would have been income to GOI but, at the same time ,it would have been transferred to people of India to pay higher rate for everything that depended on it (coal). The contractors are not foolish to pay the huge amount from
their pockets. What is the intention of CAG?.
Going further we are similarly not using free infinite rain water available right at our door step and spending lacs of crores on water, not using free air waves for education and information and are spending lacs of crores on same each year, we are not using eclectic traction which is free means of transport, open to air spaces available near our houses to grow 10 vegetable twines per person to get 100 kg of vegetable per person per year. We are wasting Rs 6 lac crore on imported bullion and tech stuffs each year. So not saving money by using cheaper and indigenous stuffs till Indian poor is able to spend as much as an OECD or OPEC poor we are engaged in largest scam and are perpetuating poverty in this poorest nation . Please wakeup.
We must take note of three findings of CAG.1)Newspaper report as exceedingly misleeding.2)CAG virtually ruled out any loss to the exchequer.3)It is not our(CAG)case that the unintended benefit to the allocatee is an equivalent loss to the exchequer. In case of 2G SPECTRUM,if the rate of 2001 is wrong, then all methods adopted by CAG to arrive at the persumptive loss are equally wrong.The ex-telecom minister is answerable for the violation of rules and irrugularities commited by him on the day of issue of2G licence but cannot be held answerable what happened after it, by sale of license/shares or by the amount realised on 3G
sale. The unintended benefit arose out of 2G spectrum sale cannot be
an equivalent loss to the exchequer.The Newspaper and CAG have done
more damage to the nation.
really CAG is doing right. but government should monitor all licenses which are related all fields.govt.should issue licence with transparnt manner
leakage of CAG report is not the question at all.
1-How can govt. official miss out possibility of such huge windfall
gains? Obviously they r motivated.
2-If these were idle mines taken over by private.Then the question is
Why the govt officials kept such huge assets idle?was it so that they
r motivated to sell it to private?
3-Such huge national assets are being allotted,Why not auctioned?
4-Even if there is an screening company where is the
transparancy.10.7lac crores is Huge it can buy entire government
officials?
One can not have the cake and eat it too. 80% of the cost of input
to power plant is from Coal; if power plants do not get coal at
reasonable rates (whether it is PSUs or private) the output cost
will be very high. Even now there are number of state electricity
boards owe a lot of cash to the power plants. Auctions can be held -
get bets price; however the power plants must be paid accordingly by
state electricity boards! Can SEBs give free power to farmers? Is it
possible? Can one control the input-and output price and for how
long? It is a very stupid calculations by CAG?
On March 9, 2001 The Hindu carried an article by Rajiv Dhawan on the 1997 Samatha case judgment and how the political class tried to subvert that landmark decision and the constitution. Mineral deposits, including coal, have been the attraction of big businesses both Indian and foreign. What has come out presently is the result of continuous manipulation at the highest level. The way the denouement is presented shows the easy access and manipulation. Almost as the print media reached readers PMO receives a letter from CAG; the rebuttal is not based on its final report. It is the same old story we heard about during the 2G spectrum case. Market prices made the losses. But the basic question is how can any government allot coal blocks when the constitution does not confer any right on the government to do so. It is well known that our constitution does not include the doctrine of eminent domain so as to enable the government to dispose of community wealth. Sunlight and air next.
The CAG leaks first and then plasters it. Alongside Wikileaks we can place our CAG; CAGleaks or LeakyCAG? In Accounting Audit, the Indian CAG is writing fictions introducing a variety of 'Presumptives'. An audit report should nail down a wrong - when it is not consistent with law, profession, moral or good policies - for penal actions. There can always be multiple options in governance. Acts in good faith which turned out to be wrong on a post-mortem and suggestions arising therefrom should be available for corrections. The CAG airs many box office hits in haste. Let it boldly work for the people and need not act covertly or overtly for senseless creation of sensations across the country to embarrass governments and confuse people. The people need a responsible institution in CAG.
really CAG is doing right. but government should monitor all licenses
which are related all fields.
The political storm, consequent upon the CAG's findings on the presumptive loss to the exchequer in the 2G Spectrum allocation is yet to die down. And, now this sensational news of a loss of almost six times the reported loss in 2G allocation and the subsequent clarification that the matter is still under ' preliminary stage of discussion' and the observations do not even constitute pre-final report.What has gone wrong, where and why? Who acted over zealously in this latest issue in the prevailing politically surcharged atmosphere in the country, and for what purpose? The public will continue to remain baffled and shocked until people concerned in all positions act with requisite restraint and such sensitive matters are brought out in the public domain after clear establishment of the irrefutability of the entire contents.
EVery report of CAG is being leaked. Is there any restriction on CAG taking up political assignments after retirement- The way the present CAG has been behaving looks like he has already joined the opposition parties -if he can pull down the country with the help of Opposition parties -lets wish him good luck.
Leakage of CAG Draft report on "Coal Block Allocation" has unruffled the feathers of many coal allocatees.I am really amused and can’t stop wondering as to how can media gets the report from the CAG office-the watchdog of Indian economy and commerce. Such offices are supposed to be the sanctum sanctorum of country. As per Indian mythology Ramayan, Ravan lost the war to Rama due to Bibhisan`s insider information. Its necessary that Bibhisan`s in CAG or its ilk are identified and necessary preventive measures are put in place to prevent the rot within. Many beneficiary organizations have put on their thinking cap for damage control .The newspapers, television channels and power based industrial sectors are having a whale of time but all the rich Indians (who earn Rs 28/- or more) don’t want to graduate so quickly from the 2G to Coal . Maybe those who have frozen the top 10 scams need amend their list.
The government talks of fiscal deficit and financial discipline and gives away revenue generating resources at throwaway prices benefiting few people in the society. The government should not be a puppet of few lobbyists, else these kind of things continue to happen. If this is not cronyism, what else ?. Hope the prime minister, finance minister, deputy chairman of planning commision have an answer.
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