Coalgate and kickbacks-A nation suffers

The logjam over 'coalgate' crippled the Indian Parliament's Monsoon Session for two weeks with the opposition party BJP adamant on the cancellation of the controversial coal mines allocation and the government refusing to bow down. Finance Minister P. Chidambaram signaled the government's desire to stand firm, by dubbing the BJP's call for Prime Minister Manmohan Singh's resignation as "outrageous."

The BJP kept up its attack on Manmohan Singh, saying he needed to speak up. "The government has not given any response to the series of allegations (over) coal allocation. The prime minister has invoked his right to silence," BJP leader Arun Jaitley said. "A right to silence is available to an accused in court, it is not available to a prime minister," he said. And it is this same policy of the PM which has cost his reputation a beating.

Between 1993 and 2011, the government of India gave away 206 coal blocks for free to government and private companies. The Comptroller and Auditor General (CAG), in a recent report, estimated that the losses due to the policy of the government giving out coal blocks for free amounted to Rs 1.86 lakh crore. Estimates made by stock brokerage suggest that only 41 out of the 206 blocks given away for free were allocated before the end of 2003. This means that 165 blocks were allocated between 2004 and 2011. The UPA government has been in power since May 2004. Hence, a major number of coal blocks were given away free during the UPA rule.

Prime Minister Manmohan Singh also happened to be the coal minister between 2006 and 2009. During this period, 134 coal blocks were given away for free. Estimates made by Nomura Equity Research suggest that between 2006 and 2009, the coal blocks given away for free had geological reserves of around 40 billion tonne. India has around 286 billion tonne of geological reserves of coal. This means around 14% of total geological reserves of coal was given away free during the period Manmohan Singh was the coal minister.

The CAG reasonably assumed that the coal mined from the coal blocks given away for free could have been sold at a certain price in the market. Since the government gave away the blocks for free, it lost that opportunity. This lost opportunity is what CAG has tried to quantify in terms of a number.

Meanwhile, the CBI alleged that some companies which were allotted coal blocks between 2006 and 2009 had "misrepresented" facts and made "fraudulent" claims to "embellish" their applications to get the allotments. The agency also accused officials of Coal Ministry of entering into conspiracy and "wilfully" not scrutinizing the documents to allow "undue advantage" for the companies in getting the blocks.

On instructions from the Central Vigilance Commission, the CBI decided to expand the scope of its investigation into the scam in coal blocks allocation to private firms between 1993 and 2004.

While a transparent system is what should have been there in the first place, Manmohan Singh is held at fault for allowing the free distribution. The fact that BJP stalled Parliament proceedings for a fortnight which cost millions of taxpayers money to practically no resolution over the matter only proved BJP's desperate attempts to unseat the ruling government. Irrespective of the outcome of this entire episode, Indian national and natural reserves have already suffered the most. Sad.

[ BY VRN ]