Government rejects charges against PM in coal blocks allocation

Rejecting allegations against Prime Minister Manmohan Singh in allocation of coal blocks, the government on Sunday said the allotment was done in an “equitable and fair” manner.

“The process of allocation of blocks was equitable, fair and just which is borne out by the fact that there has never been any serious allegation against the working of the screening committee,” the Coal Ministry said in a statement.

The clarification comes a day after Team Anna picked up portions of a draft Comptroller and Auditor-General (CAG) report to make charges against Dr. Singh when the Coal Ministry was with him.

As per a preliminary assessment by the CAG, a loss of Rs. 10.67 lakh crore was caused to the nation due to a coal scam and the issue led to uproar during the budget session of Parliament.

The Coal Ministry said the Screening Committee was a broad-based body with representation from State governments at the level of the Chief Secretaries, concerned Ministries of the Central government and the coal companies. “The move to introduce competitive bidding is to make the selection process demonstrably more transparent,” it said.

Meanwhile, Coal Minister Sriprakash Jaiswal told reporters in Kanpur that had coal blocks not been allocated, India would have lost precious foreign exchange in importing the commodity despite having it in abundance.

Asked specifically if he was refuting Team Anna's allegation, Mr. Jaiswal said he was not aware of any charges, “nor do we have to respond to allegations levelled by anyone.”

The Coal Ministry said: “The allocation of coal blocks was never looked upon as a potential source for generating revenue for the Central government...Hence the question of maximising revenue does not arise at all.”

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 to attract private investments in specified end uses, it said.

Initially there was not much demand for such allocation, but as the economy grew, the demand for coal also grew, particularly in the energy sector, the Ministry said.

“It was felt that Coal India Ltd., alone would not be able to meet the growing demand and, therefore, the option of giving a bigger role to the private sector was explored. It is in this background that we should appreciate the reasons for allocation of coal blocks to private parties for captive use during this period,” it said.

The idea of making allocations through competitive bidding was mooted in 2004 and in the following year the government initiated a proposal to amend the 1973 Act.

The delay of three years between initiating the process of legislative changes and introducing the amendment Bill in Parliament was mainly due to absence of consensus among various stakeholders and the amendment Bill was finally introduced in 2008, it said.


In the meanwhile, keeping in view the increase in applicants for coal blocks, the government evolved a consolidated set of guidelines to ensure consistency in allocation, the Ministry noted.

“In September 2005 the system was further improved bringing in greater transparency. In the improved system applications were invited through open advertisements against an identified list of coal blocks,” it said.

The intent of the government, the statement said, was to involve the private sector to invest in identified infrastructure sectors in the interest of the country and its economy and to this end, this developmental process was resorted to. “The allocation of coal blocks to private sector companies is only for captive use and not for sale or commercial use of coal. Since the blocks are allocated to private companies only for captive purposes for the specified end-use, the question of linking the blocks to the market price/CIL price of coal does not arise at all,” it added.

The budget session of Parliament, which ended on May 22, saw a strong demand by the Opposition for tabling the CAG report. The Left demanded a JPC probe into the alleged scam.

Team Anna members on Saturday clubbed the Prime Minister and Finance Minister Pranab Mukherjee with 13 other Cabinet Ministers, whom they accused of corruption. The anti-graft group had never made allegations against the Prime Minister earlier.

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Printable version | Jan 27, 2021 2:59:52 PM |

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