PM`s response to CAG report, calculations misleading
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Last Updated: Wednesday, August 22, 2012, 20:11
  
New Delhi: With the Opposition targeting the government over CAG report on coal allocation, Prime Minister Manmohan Singh is geared up to rebut in Parliament the charges, contending that there were "inaccuracies" in the "misleading" assessment of loss of Rs 1.85 lakh crore.

In the six-point response, which he is unable to present in Parliament due to the stalemate caused by the Opposition, the Prime Minister would be underlining that the coal blocks were allocated in a transparent and appropriate manner through checks and balances without any favour to any company.

The thrust of the Prime Minister's response is that Chhattisgarh, West Bengal, Rajasthan, Odisha and Jharkhand, all ruled by non-UPA governments, had opposed in 2005 the Centre's move to bring a legislation on auction process, sources said.

He holds the opposition by these states responsible for the delay in introduction of competitive bidding for allocation of coal blocks "as a new concept was being contemplated requiring changes in relevant laws as well as building consensus despite opposition to the proposal from different stakeholders, states and ministries."

The law for auction bidding is now in place. The delay in coal block allocation was one of the charges made by the CAG. The Prime Minister had yesterday said that he "can give satisfactory answers to all issues being raised."

Contesting the CAG's contention that private firms gained to the tune of Rs 1.85 lakh crore in coal block allocation between 2005 and 2009, Singh's assertion is that it reflects "inaccuracies" in the report.

The Prime Minister's point is that the CAG has computed on the basis of allocation of 57 mines but out of these, 31 coal blocks belong to the period prior to 2006.

He also says the amount of loss projected by CAG was "misleading" as calculations had been done on the basis of Coal India prices and private players have different cost parameters.

The Prime Minister also has objection to CAG questioning the policy decision of the government by making reference to Law Ministry opinion that the option to be chosen between the alternative and legislative change and administrative instruction for introducing competitive bidding was a policy decision to be taken by the Ministry.

With regard to the allegation about delay in making auction bidding a law, Singh's assertion is that even normal legislative enactments take considerable time, not only because of the procedures involved but also in view of the various consultations required to be held in order to arrive at a decision in a consensual manner, the sources said.

In this regard, the government points out that the amendment to the Coal Mines (nationalisation) Act has been pending since 2001, when NDA was in power. This view is being put forth by the government to emphasise the "criticality of consultations" and "building up of a consensus on sensitive issues" before they are finally placed in Parliament for its enactment.

The Prime Minister's assertion is that to operationalise competitive bidding, it was necessary to frame guidelines and procedures for auctioning of captive coal blocks and it required inter-ministerial consultations with other stakeholders.

After proper consultations, the rules were notified on February 2, this year. The response of the Prime Minister is also expected to counter the CAG's contention that the Coal Ministry's plan for increasing production through de-reserving Coal India Limited blocks and allocating them for captive purpose has not yielded the desired results.

The production of coal increased 7 per cent per year from 2004-05 to 2009-10, the government points out.

PTI


First Published: Wednesday, August 22, 2012, 20:11


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