A parliamentary standing committee on Tuesday termed captive coal allocations between 1993 and 2010 as ?unauthorised, illegal and most non-transparent?, giving weight to the Opposition?s demand for the scalp of Prime Minister Manmohan Singh over coalgate and law minister Ashwani Kumar for alleged vetting of the CBI?s status report on a probe into a related issue before the same was seen by the Supreme Court.
An unfazed UPA dismissed the demand for the prime minister?s resignation outright, endangering the smooth conduct of business in the second half of the Budget session. The issue of undue benefit flowing to private companies due to allocation of coal blocks without auction was first flagged by the Comptroller & Auditor General. In a report tabled in Parliament last August, the CAG had said allocation of 57 captive coal blocks to a clutch of private companies between 2004 and 2009 resulted in their windfall gain of R1.86 lakh crore.
?Most non-transparent procedure was adopted from 1993 to 2010 for allocation and supply of coal blocks. The natural resources and state largesse were distributed to few (entities) for their own benefit without following any transparent system… Was total abuse of power by the government,? the standing committee on coal and steel said in the report tabled in Parliament on Tuesday. Noting that ?the government cannot give largesse on its arbitrary discretion or its sweet will?, it said the allocations were illegal and amounted to huge losses to the state exchequer, virtually endorsing the CAG report, except for the windfall gain estimate.
Congress president Sonia Gandhi dismissed the demand for Singh?s resignation. ?Let them ask,? was her terse response when reporters sought her comments on the BJP?s demand. The furore over the standing committee report led to the adjournment of the Lok Sabha to Thursday. The Upper House too saw noisy scenes over the issue. The meeting of the core group was convened immediately after both Houses were adjourned over the issue for half an hour in the morning. The meeting, which was also attended by parliamentary affairs minister Kamal Nath, discussed the strategy for the way ahead.
The House panel sought scrapping allocation of all those blocks where production is yet to begin. So far, some 195 blocks with 44 billion tonnes of geological reserves have been allocated to public and private sector companies through the nomination route. Of these, only 30 have started production.
Addressing a press conference later, panel chairman Trinamool Congress MP Kalyan Banerjee sought scrapping of all mines where production is yet to start, besides investigating the role of officials involved in the allotment process.
Senior CPI leader and Lok Sabha MP Gurudas Dasgupta supported the BJP?s demand for Singh?s resignation, saying, ?The Prime Minister is guilty of dereliction of duty on a number of counts.? Singh held coal portfolio for a major part of the time when the allocation of coal blocks was made.
As part overall economic liberalisation, the government amended the Coal Mines (Nationalisation) Act 1973 to clear hurdle to allocation of coal blocks for captive mining by end users from sectors like power, steel and cement. This was meant to improve availability of domestic coal for these bulk consumers. Only 39 coal blocks were allocated between 1993 and June, 2004 when the UPA-I government came into power.
However, the House panel has also found serious loopholes in the allocation process as well as the monitoring mechanism to ensure that companies complied with stipulated conditions. Pointing out that the CBI has filed 9 FIRs into coal block allocation made to private companies during 2004-09 relating to misrepresentation of facts, the panel has questioned the robustness of the screening committee adopted by the government for allocation of coal blocks. No coal block has been cancelled on the ground that the firms misrepresented the eligibility criteria to get blocks. The screening committee is headed by additional coal secretary and includes secretaries from the ministries of power, steel and cement as well as representatives of the state where coal block is located.
The coal controller is supposed to monitor development work at allocated mines. However, most companies are sitting on allocated blocks.
The panel has also questioned the effectiveness of the inter-ministerial committee (IMC) set up by the government to undertake periodic review of development status of allocated blocks. The IMC reviewed the status of 58 coal blocks to whom show-cause notices were issued by the coal ministry last year. However, most of these companies were let off lightly, without having to face de-allocation.