Coal sector: Light at end of mineshaft?
The news started leaking out in December last. The Comptroller and Auditor General submitted its final report underlining gross irregularities in distributing and utilising India’s biggest and most import primary energy resource — coal.
The CAG report was incomplete. It only reviewed the distribution and utilisation of India’s coal mining assets — free of cost — to a handful of users in the private sector through a preferential, captive dispensation route. But the information piling up, and the ruckus the report raised in Parliament brought to light more disturbing facts.
One of these was that three or four business groups had lapped up nearly one-sixth of the blocks distributed and were pocketing the cost advantage by selling the final products at market price. Similarly, companies with political connections bagged assets, and sold them at a premium, to be recovered from the final consumer of the product. Worse, even the blocks allotted to state-owned entities across the country, through the government dispensation route, led to accumulation of profits by private businesses.
A large number of blocks that were intended to distribute coal to small or cottage industries landed up with private sector miners selling coal in the open market.
Even blocks offered to PSU power utilities helped private sector mine developers to reap windfall gains, depriving the country of both cheap electricity and huge revenues.
The bottomline: Nearly 45 billion tonnes of geological reserves — snatched from national miner Coal India Ltd and sold at one-third the global prices — largely fell into wrong hands.
Source: Hindu BusinessLine