18-01-2013, 09:37 AM
COAL ALLOCATION SCAM OR COALGATE
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INTRODUCTION
Coal allocation scam or Coalgate, is a political scandal concerning the Indian government's allocation of the nation's coal deposits to public sector entities (PSEs) and private companies. In a draft report issued in March 2012, the Comptroller and Auditor General of India (CAG) office accused the Government of India of allocating coal blocks in an inefficient manner during the period 2004-2009. Over the Summer of 2012, the opposition BJP lodged a complaint resulting in a Central Bureau of Investigation probe into whether the allocation of the coal blocks was in fact influenced by corruption.
While the initial CAG report suggested that coal blocks could have been allocated more efficiently, resulting in more revenue to the government, at no point did it suggest that corruption was involved in the allocation of coal. Over the course of 2012, however, the question of corruption has come to dominate the discussion. In response to a complaint by the BJP, the Central Vigilance Commission (CVC) directed the CBI to investigate the matter. The CBI has named a dozen Indian firms in a First Information Report (FIR), the first step in a criminal investigation.
THE CAG CHARGES THAT:
The Government had the legal authority to allocate coal blocks by auction rather than the Screening Committee, but chose not to do so.
As a result of its failure to auction the coal blocks, public and private companies obtained "windfall gains" of 1,067,303 crore (US$201.72 billion), with private companies obtaining 479,500 crore (US$90.63 billion) (45%) and government companies obtaining 507,803 crore (US$95.97 billion) (55%).
FIRST CAG CHARGE:
The most important assertion of the CAG Draft Report is that the Government had the legal authority to auction the coal, but chose not to do so. Any losses as a result of coal allocations, then, between 2005 and 2009 are seen by the CAG as being the responsibility of the Government
there was no legal impediment to introduction of transparent and objective process of competitive bidding for allocation of coal blocks for captive mining. as per the legal opinion of July 2006 of the Ministry of Law and Justices and this could have been done through an Administrative decision. However, the Ministry of Coal went ahead for allocation of coal blocks through Screening Committee and advertised in September 2006 for allocation of 38 coal blocks and continued with this process until 2009."
Allegations against Subodh Kant Sahai
In September 2012, it was revealed that Subodh Kant Sahay, Tourism Minister in the UPA government sent a letter to Prime Minister Manmohan Singh trying to persuade him for allocation of a coal block to a companyThe letter was written on 5 February 2008. On the very next day, Prime Minister's Office (PMO) sent a letter to the coal secretary on February 6, 2008, recommending allotment of coal blocks to the company
On 15 September 2012, an Inter Ministerial Group (IMG) headed by Zohra Chatterji (Additional Secretary in Coal Ministry) recommended cancellation of a block allotted to SKS Ispat and Power
ALLEGATIONS AGAINST NAVEEN JINDAL
Congress MP, Naveen Jindal's Jindal Steel and Power got a coal field in February 2009 with reserves of 1500 million metric tones while the government-run Navratna Coal India Ltd was refused.
The Opposition alleged that the Government violated all norms to give him coal fields
On 15 September 2012, an Inter Ministerial Group (IMG) headed by Zohra Chatterji (Additional Secretary in Coal Ministry) recommended cancellation of a block allotted to JSW (Jindal Steel Works), a Jindal Group company