Coal scam: How India lost Rs 1.86 lakh crores

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The Supreme Court on Monday declared all coal blocks allocations between 1993 and 2010 as illegal and said the process of allocation by the screening committee was illegal, unfair and suffered from vice of arbitrariness.

What is Coalgate scam?

The coal allocation scam, or ‘Coalgate' as it is popularly known is a political scandal which revolves around allocation of country's coal deposits to public and private companies by the erstwhile UPA government.

The scam came to fore after the Comptroller and Auditor General of India (CAG) accused the government of India for allocating 194 coal blocks in an inefficient manner during the period 2004-2009 which resulted in a huge loss to the public exchequer.

The coal blocks were allotted to private companies and parties in Jharkhand, Chhattisgarh, Maharashtra, West Bengal, Odisha and Madhya Pradesh 2004 to March 2011.

What all did the CAG reveal?

Earlier, the loss was said to be around 10 lakh crore, but when a report on the same was tabled in the Parliament, the figures came down to Rs 1.86 lakh.

As per reports, 194 blocks were allotted to various companies, out of which nearly 15 blocks that were given to private players did not even start production till 2011.

It also alleged that the process of allocation was not transparent and despite having the opportunity to bring in transparency, the government did not introduce the process of competitive bidding.

It also alleged that that many politicians lobbied for allotment of coal blocks and implying crony capitalism.

What did the Parliamentary Standing Committee (PAC) say?

Revealing that the government did not receive any revenue from the above coal block allocation, the parliamentary standing committee report in April 2013 said that all allocations done from 1993 were done in a non-transparent manner.

Which all ministers were dragged into the controversy?

Former prime minister Manmohan Singh, who held the coal ministry portfolio briefly in 2004 and then for almost five years between 2007 and 2012.

Others who were dragged into the controversy were ministers of state for coal like Dasari Narayan Rao, Santosh Bagodia, cabinet minister Shibu Soren.

Which are the companies involved?

The CAG report named some of India's blue chip companies like the Tata group, Naveen Jindal group, Essar group, Abhijeet group, Laxmi Mittal's Arcelor and Vedanta. According to the CAG report, all these companies benefited due to the allocations without bidding during 2004-2006.

Files go missing

In August 2013, the coalgate scam took a turn after the then coal minister Shriprakash Jaiswal admitted that a few crucial files relating to the investigation between 1993 and 2004 had gone missing. Jaiswal's admission came after a Supreme Court directive to the government to co-operate with the CBI's inquiry.

CBI ‘a caged parrot'

Earlier last year, CBI director Ranjit Sinha admitted to the Apex Court that its initial report on the scam had been vetted by the law minister and the PMO, and that certain changes had been made to the report. This had prompted the Supreme Court to term the CBI as a ‘caged parrot'. Following this revelation, the law minister Ashwini Kumar had to resign.

Former Coal secretary PC Parakh on coal scam

Former Coal Secretary PC Parakh had earlier said the Apex Court must take "strong note" of CBI's reported move to close its investigation into the 10-month old coal scam probe against him and Aditya Birla Group Chairman Kumar Mangalam Birla, as the agency had "spoiled reputations" by lodging the case in the first place.

Parakh had strongly criticized the CBI in his book which was released earlier this year in April, in which he even accused CBI Director Ranjit Sinha of abusing his office to book him. Parakh had also levelled charges against former PM Manmohan Singh saying he was undermined by former coal ministers Shibu Soren and Dasari Narayan Rao.

What has the Supreme Court said?

The Supreme Court on Monday declared illegal all coalfields allocated by the government between 1993 and 2010. The bench said the allocations suffered from the "vice of arbitrariness" and were not transparent. The allocations had no objective criteria and "no fair and transparent procedure", the judges said, adding this was impermissible.

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