Both houses of Parliament saw disruptions on Thursday over a news report based on a ?draft CAG report? that allegedly said the government lost R10.67 lakh crore in revenue as it failed to adopt the auction route for allocation of coal blocks between 2006 and 2009. Embarrassed over the leak of what it called ?preliminary observations? that did not even find their way into an initial draft, the office of the comptroller and auditor general wrote a letter to the Prime Minister saying the news report was ?exceedingly misleading?. The Prime Minister?s Office, on its part, promptly released the CAG?s letter to the public in an attempt to quell the political storm that the Opposition tried to build up.
Late on Thursday, Prime Minister Manmohan Singh said: ?The CAG has clarified there is no report on coal on allotment of coal blocks. What is there to clarify in Parliament?? The government also said the procedure followed for allotting coal blocks was transparent.
The CAG?s report comes after its report on 2G spectrum allocation tabled in Parliament in November 2010, where it put a presumptive loss figure of R1.76 lakh crore, which found resonance with the Supreme Court as it cancelled the relevant licences en masse in February this year.
Some 155 coal blocks were allocated to private and public sector companies between 2004 and 2009 on first come, first served (FCFS) basis as there is no policy in place for auctioning. More than 100 companies including NTPC and Jindal Steel and Power were listed as beneficiaries in the news report. Prime Minister Manmohan Singh himself held the coal portfolio from November 2006 to May 2009, the period during which most of these coal blocks were allotted.
The CAG on Thursday backed away from that loss calculation, describing the low-priced sales as an “unintended benefit” to companies that did not mean an equivalent loss to the exchequer.
There is growing demand for scrapping the FCFS policy in favour of auctioning in view of the 2G scam. While a committee on allocation of natural resources preferred the auction route in most cases, the Competition Commission of India has batted for the same for the sake of better price discovery and deriving the fruits of competition. While delivering its judgment on the 2G spectrum case recently, the apex court too had suggested adopting auctioning route for allocation of all natural resources.
The government has proposed legislative changes to pave the way for the auctioning of coal blocks. However, parliamentary nod to the amendment Bill is still awaited.
“In the extant case the details being brought out were observations which are under discussion at a very preliminary stage and do not even constitute our pre-final draft and hence are exceedingly misleading,” the CAG said in the letter to the Prime Minister. It also expressed ?anguish? over the leakage of the draft report.
Coal minister Sriprakash Jaiswal said: “We gave advertisements for allocation of coal blocks and invited applications…After the applications were received by us, the state governments were consulted and thereafter the coal blocks were allocated. The coal blocks are allocated through a screening committee chaired by the coal secretary.”
Finance minister Pranab Mukherjee said the CAG’s report is not the final version. “It is not yet the CAG report. It is a draft report,? he said.
The Opposition however, is not buying the argument. Prakash Javadekar, spokesperson for the BJP, said: “Our MP, Hansraj Ahir, had moved a petition with the CAG for a special audit on coal allocation in 2010, when we found that 73 coal blocks had been allocated to private companies in a three-year period, while a Bill to follow the auction route was under consideration. The rate at which allocations had been done since 1993 amounted to 5-6 coal blocks in a year.”
Earlier in the day, notices for suspension of question hour were moved by the BJP and the Left parties in the Lok Sabha, and members rushed into the well of the House to protest against what is being termed as “coalgate”. The Lok Sabha was adjourned for an hour, while the Rajya Sabha was adjourned for 15 minutes.
Speaker Meira Kumar called a special meeting of senior party leaders and said that since the fiscal calendar was very tightly scheduled (the financial year ends in a week), the Union Budget needed to get the clearance of the lower House at least.
“After the appeal by the Speaker, we all agreed that we will raise these and other issues after Tuesday, when we expect the Budget to be cleared,” said leader of the opposition in the Lok Sabha Sushma Swaraj. Business resumed in both Houses after lunch.
