The Monsoon Session of Lok Sabha continued from 8 August to 7 September 2012, with a total of 19 sittings. Following the tabling of the Performance Audit Report of the Comptroller and Auditor General (CAG) of India on “allocation of coal blocks and augmentation of coal production” on 17 August Parliament proceedings were disrupted for a few days. In its report, the CAG, the official auditor of the government, was critical of the allocation of coal blocks by the government on several counts. The CAG had stated that the inter- Ministerial Screening Committee did not follow a transparent and objective method while making recommendations for the allocation of coal blocks. The competitive bidding could have been introduced in 2006 by amending the administrative instructions in vogue instead of going through a prolonged legal examination of the issue which delayed the decision making process. The report also mentioned that the delay in introduction of competitive bidding rendered the existing process beneficial to a large number of private companies. The Auditor also estimated financial gains of 1.86 lakh crore rupees ($34 billion) likely to accrue to private coal block allots. A part of this financial gain could have accrued to the national exchequer by operationalizing the decisions taken years earlier to introduce competitive bidding for allocation of coal blocks.
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The audit believed there was a need for strict regulatory and monitoring mechanism to ensure that benefit of cheaper coal was passed on to consumers. The opposition members were up in arms against the government, demanding the resignation of the Prime Minister, Dr Manmohan Singh, MP, who was in charge of the Coal Ministry for many years. On 27 August, the Prime
Minister made a statement in the Lok Sabha on issues raised by the CAG. Due to continuous interruptions, he could not complete his statement and laid a copy on the Table of the House. In his statement, the Prime Minister said the Ministry concerned would respond to the issues
without basis and unsupported by facts. The Prime Minister said
since 1993 captive coal blocks were allocated on the basis of recommendations made by an inter-Ministerial Screening Committee which also had representatives of state governments. Taking into account the increasing number of applicants for coal block allocation, the government in 2003, evolved a consolidated set of guidelines to ensure transparency and consistency in allocation. It was the UPA-I government which, for the first time, conceived the idea of making allocations through the competitive bidding route in June 2004. The Prime Minister stated that
Dr Manmohan Singh, MP
raised in the report of the CAG once it was tabled in Parliament. The PAC would then submit its report to the Speaker and that Report would be then discussed in Parliament. Taking full responsibility for the decisions of the Ministry, he asserted that any allegations of impropriety were
the policy of allocation of coal blocks to private parties, which the CAG had criticized, was not a new policy introduced by the UPA. The policy had existed since 1993 and previous governments also allocated coal blocks in precisely the same manner. The UPA made improvements in the procedure in 2005 by inviting applications through open advertisements after providing details of the coal blocks on offer along with the guidelines and the conditions of allotment. The applications were examined and evaluated by a broad-based Steering Committee with representatives from state governments, related Ministries of the central government and the coal companies. Any administrative allocation