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The CoalGate Scam: Overview of Scam that Shook India


The Coal Scam

The coal allocation scam is also referred to as the CoalGate scam. This was a scam in India that shook the nation when it came to light. It was one of the most important and highlighted political scandals which was concerned with the allocation of the Indian subcontinent’s coal deposits to private as well as public sector companies.
Coal Heaps representing Coal Scam of India
Coal Scam
This is the responsibility of the Indian government and that is why all the burden was on their shoulders. In March 2014, a draft had been issued by the Comptroller and Auditor General of India. This is the CAG. This reports accuses the Indian Government of not being able to allocate coal blocks efficiently between the two previously mentioned sectors. The period was this low efficiency is 2004-2009. This was a time when the Congress Party was in power in the nation. Unlike the present times when BJP has been performing way better, that was an age full or scams. In 2012, the reigns for investigations were handed over to the CBI (central Bureau of Investigation) to look into the matter and determine whether the allocation was indeed unduly influenced by corruption. 
Showing Parliament Building Coal CAG and others connected with Coal Scam and Investigation
Coal Corruption of India

The argument that has been put forward by the Comptroller and Auditor General of India (CAG) is that even though the Government of India had the power and status to allocate the coal blocks between the two sectors using competitive bidding, it chose to go other way and not abide by this. This is what in turn led to the development of less payment by both the public and private sectors. If they had followed competitive bidding, then the funds raised would have been higher. In its draft that had been submitted, the CAG estimated the "windfall gain" to the allocates to be ₹10,673 billion. However, the final report sealed the deal at ₹1,856 billion. This definitely did not go down too well with the then Prime Minister, Manmohan Singh and he rebuked the entire submission. 
Comptroller and Auditor General of India Display
CAG India

A very important fact you must note here is that initially, the CAG report was merely focusing on the fact that coal blocks had not been allocated on fair terms. There was no question of corruption anywhere. However, it was over the course of 2012 that the topic entirely switched over and the corruption of the Congress party came to become the centre of attention. When the BJP filed a complaint, the CVC or the Central Vigilance Commission initiated the CBI to look into the case. In the first move towards getting into the depth of the matter, the CBI named a number of top Indian enterprises in its FIRs. According to these FIRs, these companies have been charged with the crime of purposely overstating their total value, inability to state the previous coal allocations and hoarding of the coal allocations instead of playing a part in developing it. There has also been speculation that bribery may be involved. 
Display Board of Central Bureau of Investigation, India
CBI India

The matter became a huge issue. The masses were outraged and the media kept talking about various aspects of the case. In fact, there had also come a time when the BJP had demanded that the Congress Prime Minister should resign, or else they would not be a part of the Parliament’s debate. It was then stated that all the distribution from 1993 to 2008 had been done in an unauthorized way.

Names of top ministers active and involved at that time:

·       Sriprakash Jaiswal
·       Manmohan Singh
·       Sibu Soren
·       Mamata Banerjee
·       Ram Vilas Paswan
·       Syed Shanawaz Hussain
·       Sunder Lal Patwa
·       BJP Naveen Patnaik

Facts about Coal allocation scam of India

1.   What are the coal blocks and why are they important?

India is a country that is one of the largest coal producers on this globe. It has a number of regions within the boundary of the nation that are highly rich in coal. Some of these regions are Orissa, Jharkhand and Chhattisgarh in the east. There are several areas in the central and the southern part as well. This implies that there is no dearth of areas which have coal. These are then divided into blocks and then leased to mining companies so that make the most of the region under their kitty as well as develop surplus. You would be taken aback to know that more than fifty percent of the commercial energy needs of the Indian subcontinent are met by the use of coal. It is thus, the most important fuel for steel and cement plants. Coal India Limited, owned by the state, is the sole agency that sells coal in India.

2.   How are the coal blocks allocated?

It was in 1973 that the Indian government took over coal mining in the country. In 1976, private producers were allowed to own mines and in 1993 power companies too joined the league. Till 2005, rapid licences were issued. However, in 20014, the Congress realised that CIL would be unable to produce enough for the new thermal plants. Thus, companies from both the sector were granted ownership to produce and develop more.

3.   Is auction a fairer way?

Previously, auction was chosen. But, it was later realised that it was not possible because they felt that the price of the coal would increase a lot and the chief ministers felt that their grip over the role was diminishing. However, the auction bill was passed in 2008 and in 2010, it became a low. The delay was explained as time taken to make policies. Now, coming to the opposition, it was felt that the higher prices may be undue for a major chunk of the population. Thus, the government may actually be making profits at the cost of the consumers.
Hammer shown representing Courts Verdict in Coal Scam
Justice for Taxpayers Needed
The answer was competitive bidding where the bid would be sealed and submitted before everyone. The need of the hour was a transparent process where the public knows everything and there are no secrets. However, the entire thing depends upon court judgment.



See also - CoalGate Scam

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Tags: Coalgate Scam, Coal Scam, Coal Scam in India, Fuel Scam, Coal Allocation Scam, Mining Scam


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