CAG (Para 5.2): Production of coal from captive mining wasn’t encouraging. Out of 86 coal blocks, which were to produce 73 million tonnes of coal during 2010-11, only 28 blocks, which included 15 blocks allocated to private sector, could start production by March 31, 2011, and produced only 34.64 mn tonnes during 2010-11.
Critique: The CAG appears to be selective and studying and comparing both apples and oranges. No two mines are exactly similar. The quality of coal, location of the mine, the nature of the overburden, the time required to remove it, proximity to roads and railway sidings, besides obtaining clearances and coping with displacement of people, environmental concerns, activist groups and Maoists are some of the factors to be taken into account while examining or explaining delays. The CAG report does nothing of the kind.
CAG (Para 3.3): Coal production remained far below targets set by the Planning Commission, but dereserving coal blocks meant for CIL and allocating them to captive consumers did not yield any result as no production could commence from these blocks.
Critique: CIL produced 360 mn tonnes of coal in 2006-07 and 431 mn tonnes in 2010-11. Production ranged from 99.21-99.14 per cent of its target till 2010, but fell to 93.66 per cent in 2010-11. The report attributes this to inadequate drilling capacity, mismatch between excavation and transportation capacities and under-utilisation of heavy earth-moving machinery. It fails to account for environmental concerns, Maoists, forest clearances etc that have held up operations. The report acknowledges that even CIL takes on average four years between allocation and production. But it doesn’t examine why new firms find it difficult to start mining nor does it mention the economic boom before ’08 or the slowdown and slump that followed. Chew on this: demand for coal in 2011-12 was an estimated 713 mn tonnes. India produced 650 mn tonnes (bulk by CIL) and imported 68 mn tonnes.
CAG (Para 4.2): The concept of competitive bidding of coal mines was first made on June 28, 2004, at a meeting of all stakeholders. The secretary (coal) wrote a note in July advocating a revision in the policy. The ministry of law and justice opined in August 2004 that this can be done by an administrative fiat. But the government has taken close to eight years—till February 2012—to notify it.
Critique: The report glosses over the opinion given by the law ministry in September 2004 that the ideal course would be to modify the law. It glosses over the draft bill, which was placed in Parliament and studied by the standing committee and which asked the government to again consult the states in 2008. It ignores that 2009 was an election year, with disruptions in Parliament. Both the CAG and the BJP seem to suggest that the government should have taken the opposition of coal-bearing states like Orissa, Jharkhand and Chhattisgarh to competitive bidding—as also opposition from industry—in its stride. The PM’s seemingly reasonable alibi that in India, building consensus and modifying laws take time has been dismissed out of hand. His mild surprise at a constitutional authority like the CAG advocating administrative fiat over legislation has merited no discussion.
CAG (Para 4.3): Delay in introduction of competitive bidding rendered the process beneficial to private companies, which are likely to gain financially an estimated Rs 1,86,000 crore, a part of which could have accrued to the national exchequer if competitive bidding was followed.
Critique: Coal mines were nationalised in 1972-73. Since then, few private companies have had any experience in coal mining. It is also a capital-intensive business, with a single dragline used to remove overburden often costing Rs 75 crore. To expect that private companies would fall over each other for coal blocks in forests, in Maoist strongholds and some in populated areas, is unrealistic and misses the big picture. Also, the figure is a back-of-the-envelope calculation that mentions no period. Is the CAG suggesting that the 57 allottees would have made this gain over a period of 30 years after starting production? Also, to compare the cost of public sector monolith CIL, which has economies of scale, the advantage of experience and in-house skill and has vast tracts of land and mines acquired 30 years ago, with the costs to be incurred by private companies new to mining coal, is over simplistic.
''SHISH KHETAN | HEADLINES TODAY | NEW DELHI, JANUARY 21, 2013 | UPDATED 10:52 IST
Now scam in fertiliser ministry? Prices, subsidy rise simultaneously, but Alagiri ignores his junior minister's warnings
A special investigation by Headlines Today has revealed that Minister of Chemicals and Fertilisers M.K. Alagiri overlooked a series of controversial decisions taken by his ministry, leading to a huge loss to the exchequer due to the gross misuse of central subsidy.
Though a junior minister repeatedly red-flagged these irregularities in the ministry, his boss refused to acknowledge it.
Why subsidies and prices rose simultaneously?
At the heart of this Headlines Today investigation is willful neglect on part of Alagiri, who also happens to be the son of DMK chief M. Karunanidhi, as officials in his ministry allowed private companies windfall gains at the cost of farmers. The mandarins and manufacturers together ensured market prices of fertilisers remain beyond the reach of ordinary farmers.
At a more macro level, the investigation laid bare the reason why subsidies failed to reach the targeted masses even as these doles continue to disfigure the fiscal deficit and edge Indian economy closer to a ratings downgrade.
The UPA-2 regime saw a 10-fold increase in the fertiliser subsidy bill. But the price at which fertilisers are sold to farmers has been escalating at a staggering pace. Fertilisers have now become prohibitively expensive for farmers causing widespread distress in rural areas.
Another 100000 Lacs Fertilizer Scam has been unearthed none other but by the present Minister of State in Fertilizer and Chemicals Ministry ShriKant Zena the Minister .That was about couple months bac when he brought the matter to notice of ALIAGIRI this boss in the Ministry .Nothing has happed yet .
Interestingly when there was very severe drought in India two years back subsidy for Fertilizer Sale was claimed and received for 2.5 times the Fertilizer sold to the Farmers.
CAG had asked some questions in this regards but those have not been replied by the Minster .
Now Question arises : Why should we not believe SriKant Zena a Minister of MOS in the same Ministery of Fertilizers ????
Various Links in Indian Newspapers on Coal Gate .
'As the government deliberates on action to be taken in coal blocks where little work has been done so far, the Coal Ministry estimates that allottees of 60 mines may have got a whopping Rs1.97 lakh crore benefit by getting these for free.
The 60 blocks were awarded to both private and public sector companies without competitive bidding between 1998 and 2009. Of these 60 blocks, seven were allocated during the BJP-led NDA regime between 1998 and 2004 while 53 blocks were given away during the UPA regime.' Read full report-
So, Mr Uttam Sengupta and his colleagues (critique) - More lies in your next article?
This is the most thorough analysis of the CAG report that I have seen. It is healthy for the system that the auditors themselves be audited. - Anwaar
Anwaar,has shunned all his so-called objective and liberal pretenses and is shamelessly cheerleading the yellow journalism to defend a corrupt regime. Even in the past he voiced his opposition to Anna Hazare, his lokpaal bill and Ramdev in tune with the Congress mouthpiece.
An auditor's job is to point out shortcomings in a company's accounting practices. An adverse opinion from auditors calls in to question the accountability of the management that is running the finances. However, if you are a journalist from the Outlook Bureau with a hidden agenda to defend a corrupt management at any cost, you will change the focus of the attention from the message to the messenger, Instead of questioning credibility of the government and its agenda you start questioning the credibility of the auditor and its agenda. This is when media touches its nadir. Uttam Sengupta is the same semi numerate journalist who with selective data, limited knowledge about statistics and perverse reasoning was trying to defend what was indefendible- that illegal immigration in the North East was never as serious an issue. Even at that time his objective was to defend the same ruling Congress government that was criticized for its inability to prevent a large scale communal riot.
CAG is not a political body set up to play politics. Its purpose is to question accountability in public finance. Its role is not to endorse either Congress or BJP. If this is how CAG is criticized for being selective then tomorrow a judgement against the ruling party will be interpreted as politically motivated judgement from the Supreme Court.
Unfortunately when partisan interests assumes more importance than national interests, debate on CAG 's credibility or Team Anna's personal lives will surface only to shift focus from the most serious national issue called corruption.
CPI(M) leader Sitaram yechuri allged that coal block allottee cos have looted the public sector banks. If coal block allotment is cancelled many banks may bankrupt.
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