CAG Report: Did govt just give away coal worth Rs 10 lakh cr?

The latest draft report from the Comptroller and Auditor General’s office reportedly states that the government gave away 155 coal acreages, areas in which coal could be mined, for five years to a number of corporate houses, a move which allegedly deprived the government of Rs 10.67 lakh crore.

The report, titled ‘Performance Audit of Coal Block Allocations’, has stated that about 100 private companies benefitted from the government not auctioning off the coal acreages between 2004 and 2009 and resulted in a loss of Rs 10.67 lakh crore to the government exchequer, a report in the Times of India said today.

The CAG has reportedly said that the loss of Rs 10 lakh crore was a conservative estimate since it takes into account prices for the lowest grade of coal. The report adds that even if prices at the time of allocation are considered the government may have lost out of Rs 6 lakh crore.

[caption id=“attachment_252205” align=“alignleft” width=“380” caption=“Coal scam hits government.”] [/caption]

Private and public companies were beneficiaries of the government’s alleged largesse and the report states that private firms obtained coal worth Rs 4.79 lakh crore while government companies received coal worth Rs 5.88 lakh crore.

Among the major coprorate houses that benefitted from this include companies under the Tata group, Jindal Steel and power, the Vedanta group, Essar group, Adani group, Arcelor Mittal, Lanco group, Aditya Birla group, Bhushan steel and power, Jayaswal Neco, Abhijeet group and other small companies, the Times of India report stated.

The windfall gains made by each company was estimated by comparing profit made by the government’s Coal India Limited while mining in a similar coal field.

Among the public companies that benefitted from this were National Thermal Power Corporation (NTPC) and Minerals and Metals Trading Corporation (MMTC) and mine development corporations operated by Chhatisgarh, Jharkhand and Madhya Pradesh, the report stated.

The CAG had sought for the reply for the coal ministry which said that they had allocated many of the coal acreages to companies in the power sector where tariffs was regulated on the basis of coal costs and the other steel and cement industries could pass on the benefit of lower coal costs to the consumers.

However, the CAG said that coal being a natural resource it should have been allotted to private players through auctions since it would have brought more transparency.

“They (private companies) can augment their resources but the object should be to serve the public cause and to do the public good by by resorting to fair and reasonable methods,” the CAG reportedly stated.

“The State legally owns the natural resources on behalf of the citizens and the natural resources cannot be allocated to private hands without ensuring the benefit of the low cost of the natural resources would be passed on to the citizens,” it stated.

The report is expected to be tabled in Parliament after the discussions on the budget.

However, the BJP has already come out against the government for the report, with spokesperson Prakash Javadekar saying that the government was not fit to rule for allowing this level of corruption.