Apple cart upset,apple cart not to be upset!

Why should Mr Birla a prime architect of reforms in India should be worried?CBI may lodge FIR only. Rule of law has to work.Let all the big guns of India incs and those in the corporate government of India be booked, believe me nothing is going to happen as Neera Radia tapes contributed nothing and GAAR killed.

Palash Biswas

Breaking its silence, the Prime Minister's Office on Saturday rejected any criminality in the controversial allocation of coal block to Hindalco, saying Prime MinisterManmohan Singh had approved it on the basis of "merits" of the case placed before him.

The PMO, while making it clear that Singh was the 'competent authority' who cleared the proposal mooted by the coal ministry in 2005, underlined that the allocation to a joint venture, including Hindalco, was not done at the cost of PSU Neyveli Lignite Corporation.

It released details of the sequence of events leading to Singh's approval on October 1,2005 and said "the Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and based on the merits of the case placed before him".

While defending the decision, the PMO referred to Singh's statements earlier that the government has nothing to hide and it will fully cooperate with CBI which is probing the case.

The allocation of Talabira coal block in Odisha is in the eye of a storm with CBI booking Aditya Birla Group chairman Kumar Mangalam Birla and former coal secretary P C Parakh. Parakh has said if he was accused of conspiracy, then the Prime Minister also should be made an accused as he had approved the revised decision.

The PMO acknowledged that the final decision on the allocation "differed" from the earlier recommendation of the screening committee. "This was done following a representation received in the Prime Minister's Office from one of the parties, which was referred to the ministry of coal," the PMO said in a statement.

The PMO said CBI is free to investigate the case as it may have got hold of some documents post-allocation.

ET has learnt, from talking to NRIorganisations, that close to 10,000 Indians living in the US, UK, Europe and Southeast Asian countries will be on Modi duty. They are postponing their annual Diwali or winter holidays.Thus,Holidaying NRIs are a wintertime fixture in India. This winter will be somewhat different. A large number of visiting NRIs will be on what they consider serious business - volunteering for Narendra Modi's election campaign.

indiatvnews.com

Billionaire Kumar Birla Named In India's Coalgate Scandal

Forbes-15-Oct-2013

Industrialist Kumar Birla who controls the $40 billion-in-revenues Aditya Birla Group, a commodities conglomerate, was named Tuesday by ...

dna edit: Wrecking the coalgate probe
Daily News & Analysis-16-Oct-2013
Indian tycoon accused in coal mining scandal
The West Australian-16-Oct-2013

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*	7 things you wanted to know about 'Coalgate' Business Standard-15-Oct-2013 The multi-billion dollar 'Coalgate' scandal is back in the headlines as the CBI filed a fresh FIR against industrialist Kumaramangalam Birla and ...

Favours allegedly shown to top corporate houses like Mukesh Ambani's Reliance Industries Ltd, his brother Anil Ambani's ADAG group, Tatas, working of touts, kickbacks in aviation sector, manipulation of Unitech's stocks and illegal gratification paid to tax officers arising from Niira Radia's tapped conversations will be probed by the CBI, the Supreme Courthas said.

Holding that the tapped conversations suggests that "unscrupulous elements have used corrupt means to secure favours from government officers", the apex court directed the probe on various issues including "favours" shown by VK Sibal, the then director general of Directorate General of Hydrocarbon, to RIL and quid-pro-quo received.

It directed CBI probe into the allotment of coal blocks to Sasan Power Project, run by ADAG Group and allotment of iron ore mines at Ankua, in Singhbhum District of Jharkhand to Tata Steel.

A bench headed by Justice GS Singhvi asked the agency to investigate alleged criminal misconduct by public servants in respect of survey/raid conducted by Income Tax department, payment of illegal gratification to tax officials to get work done and conversations regarding allocation of spectrum.

Out of 23 issues which were framed by a apex court-appointed probe team on the analysis of the tapped conversations of Radia with bureaucrats, politicians, corporate tycoons and scribes, the apex court ordered CBI probe in 14 issues.

The court also directed the probe in working of touts and middlemen and kickbacks in aviation sector and appointment of Pradip Baijal, ex-chief of TRAI, as chairman of Pipeline Advisory Committee.

The agency will also probe market manipulation and hammering of stocks of Unitech and fudging in the subscribers base/record by ADAG Company and submission of the same toBombay Stock Exchange and TRAI to save the money.

Tata's role in supply of low-floor buses by Tata Motors to government of Tamil Nadu under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) scheme of government of India will also be probed.

The Aditya Birla Group's bid for a bank licence is unlikely to be thwarted just because chairman Kumar Mangalam Birlahas been named in a CBI first information report, according to top officials involved in the process. "Birla's bid to get a banking licence will not be foiled just because of allegations made in the FIR," said one of the officials, none of whom wanted to be named. The coal block allocation case is at a very preliminary stage and "on the face of it there isn't any conclusive evidence of wrongdoing against the chairman of the group," an official said.ET reports.

The argument is that an applicant shouldn't be denied a licence over being named in a case that may eventually fizzle out as has happened in the past. Crucially, officials also said there won't be a blanket application of the 'fit and proper' norms for the 26 applicants seeking bank licences.

"RBI and the screening panel for bank licences have to use some amount of discretion and subjectivity while applying the fit and proper criteria," said an official. Experts said granting of licences will entail a certain amount of discretion, which is whyRBI has appointed an expert panel headed by former governor Bimal Jalan to make recommendations. This panel will provide an independent view on a process that will allow corporate houses into the banking space.

Aditya Birla Group has several businesses in the financial sector and Kumar Mangalam Birla is keen on adding a bank to the portfolio. The bank licence application has been filed by Aditya Birla Nuvo. Birla stepped down from the central bank board in July to avoid any conflict of interest.

Aditya Birla Financial Services Group, a wholly owned subsidiary of Aditya Birla NuvoBSE 2.16 %, is the umbrella company for most of the financial businesses including corporate finance, asset management and broking and will be the non-operating financial holding company, in line with one of RBI's main conditions. Aditya Birla Finance, a subsidiary of this company, will be converted into a bank if the application is successful.

A bumper apple crop saw prices crash to the despair of the fruit growers, obviously for them, the apple cart is upset. By as far as the corporate parliamentary democracy in India concerned, the apple cart is not to be upset whatever may come. We are the people, most inactive in democratic functioning, have to chose a government and it is just reduced to be religious ritual,to be performed again and again,without any significance.Without any consequence. No participation of the people. No representation at all. Mandate manipulated by religious nationalism,soft or hot. Minority governments have to continue ethnic cleansing all on name of inclusive development.The trickling economy is producing nothing but the overwhelming tools of mass destruction. All definitions modifies and all informations false.We are the most misinformed people on this earth despite most hyped RTI. Corporate media is engaged to create an atmosphere for the final kill, second generation of reforms. It is amnesty for black money.It is amnesty for all crimes against the people and humanity in general.

The Indian markets had a spectacular Friday day as the benchmarks surged over 2 per cent in trade after it appeared that the US Fed will not taper its stimulus program after raising debt ceiling. The easy liquidity from the US is heading to emerging markets, including India, for better returns. FIIs have pumped in over Rs 6,600 crore in Indian markets in October.

We have handed over the economy to foreign institutional investors. Now,Foreign institutional investors (FIIs) are trooping back to the Street, buying bagful of stocks in September and October, as they once again place their faith in Indian equity markets. They have slowly cut their hedging positions in derivatives markets and bought equities worth $2 billion in September, and nearly $1 billion in October in the cash segment so far, after pulling out $4 billion between June and August.Fund managers tracking the futures and options (F&O) markets say FIIs are not buying fresh protection for Indian markets, which they usually do by taking position in index put options in the derivatives segment, after buying in the cash market. Data suggests FII participation in the index put options are currently near one-year low, though they continue to add long positions in index futures.

Green revolution contributed more than dr. Manmohan Singh and his corporate religious teams. It happened in Punjab. The cost of production never returns. Punjab was thrown in fire. Punjab bore most of the agrarian crisis and paid the cost of agrarian crisis.We treat this issue as a terrorist challenge. The tribal world is suffering from the day one of democracy. Now,one third of Indian population is internal migrant. Most of it is tribal. Tribal world is ejected from its homeland and thrown into cities. No land reforms. No fifth, no sixth schedule. No PESA. No forest right. No civil right. No Human right. Segregation and segregation over again. Constitution irrelevant. Rule of law speaks corporate, builder, mafia language.The military state has declared a war against indigenous aborigine world. They scream for democracy. They do speak for inclusive development.They cry for justice and equity.In return ,they face inhuman repression for decades after decades.Intense mythical hate campaign justifies the killing in Indian Killing fields. And the Nation treats the land issue as either naxal or maoist challenge.

Bidarbh is paying the prices for long. All cotton producing state face the spree of suicide incidents constantly growing.The minister of agriculture Sharad Pawar plays the export import game in IPL style.The peasantry suffers.The masses in general suffers most.

Now , it is the turn of the Hills as Economic times reports:

A bumper crop in the apple capital of India—Himachal Pradesh—is usually reason for rejoicing, but this year, it led to a huge crash in prices between 50% and 80% in mandis, though this did not have a major impact in the retail space. Luckily, as the season nears its end, prices are looking up.

The weather played the first spoilsport. Premium Red Delicious apples of Himachal started hitting the market in mid July, earlier than usual, as the monsoons came in early which led to the early maturing of the fruit, forcing growers to rush the fruit to the markets.

Initially the apple sold at Rs 100/ kg but in August with more fruit flooding the market prices dropped to Rs 50/ kg across various major agri-marts in India. So even as consumers bought apples at Rs 50-100 a kg in July across the country, farmers in Himachal Pradeshsold the fruit for as little as Rs 15 a kg.

"It was a five year low price," said an upset Ravinder Chauhan, a progressive farmer and president of the Himachal Pradesh-based Apple Growers Association of India. According to him, farmers initially got stable prices but as the harvesting progressed the returns dropped to 40-50% less than previous years.

There was worse to come. In August the prices fell further. The excessive humid conditions from incessant monsoons rains led to creation of fungi (marsonnina and alternaria) in the trees that created premature leaf fall across apple orchards in Himachal.

This forced fruit growers to go for premature harvesting and sent more fruit into the market.

Considering the best quality entered the market, now a box of apples was being sold for Rs 30-40/kg where it is usually sold at about Rs 180 to Rs 200, while the lower grade apples were being sold at throwaway prices of just Rs 10-20/kg. The unusual harvesting led to a price crash with apples selling at a much lower price than onions or even brinjals across India.

This year, the state government had targeted a production of over 35 million apple boxes of 20 kg each, which is approximately 765,000 tonnes. In the previous year, over 20.4 million boxes were harvested which was 200% lower than the average annual production of 25 million boxes.

"In the month of September, it was a bad time for farmers due to the glut in the market. But as the festive season progresses and crop is less, farmers who are selling the apples are getting good price in October," Chauhan said.

Bulk buyers from Gujarat-based Adani Enterprises, which has a total capacity of 18,000 tonne and the Container Corporation of India (Concor), a subsidiary of Indian Railways however say there has been no distress sale by farmers.

"It has been a good apple buying year for Concor and we have procured 12,000 tonne compared to 7,000 tonne in the previous year as the quality and prices were very good," said P Alli Rani, director (Finance) Concor. She said they had been buying Shimla- royal and red delicious apples at a fixed price of Rs 53 a kg for the season, even as prices fell to as low as Rs 20 a kg.

All types of dark secrets disclosed,just to engage us on the operation table.No justice. No rule of law. Constitution made irrelevant. Supreme court orders violated. It is parrot tale all the way.

Even as he drew all round support from industry and some ministers,Kumar Mangalam Birla today broke his silence rubbishing CBI charges against him in a coal block allocation case saying he was not worried as no wrong has been committed.

Birla, Chairman of the Aditya Birla groupflagship firm Hindalco, met Finance Minister P Chidambaram and Revenue Secretary Sumit Bose and later told reporters that he had discussed the FIR issue with the minister.

"As of now I am not worried about it. There is nothing wrong (that) has been done. So why should one worry?"

He was asked whether the CBI FIR naming him and HindalcoBSE 3.15 % in the coalgate scam would cast a shadow on the Aditya Birla Group's application for a bank licence.

Meanwhile, industry body CII today joined others in slamming the FIR against Birla but issued a nuanced statement saying while CBI had the right to proceed against anyone it should be careful before taking action against reputed industrialists to avoid creating a sense of fear.

Without referring to the Birla case, CII chiefKris Gopalakrishnan said, "It is desirable to ensure that all facts of the case are laid upfront before proceeding against respected and reputed individuals."

He said that reputations of institutions and individuals take years to build and therefore, extreme caution needs to be exercised before any action is taken, which jeopardises reputation that institutions and individuals build for themselves.

Mind you,ET has already pointed out the dangerous absurdity of CBI's Coalgate FIR againstKumar Mangalam Birla. CBI's argument in this specific case stands up poorly to legal and logical scrutiny. But the FIR against Birla points to a bigger, systemic danger that needs to be identified and combated with even more vigour.

The bigger danger is this: part of India's establishment seems to have forgotten basic principles of economic liberty and entrepreneurship.

Those basic principles are: (a) Economic agents, businessmen, for example, work to maximise their gains. (b) Therefore, a businessman must do all he can, within the bounds of law, to grow his business; that's his dharma. (c) So, it follows that businessmen can, and indeed should, try to engage with and approach policymakers, because policy has huge, sometimes game-changing impact on businesses. (d) Hence, it's absurd to assume that when an industrialist meets, say, a minister, it's inherently wrong. In a democratic capitalist society, that's just natural. (e) The only caveat is that neither businessmen nor policymakers should break the law, through bribery, for example.

These basics are getting lost in the demonisation of business informing much of current discourse. So is an obvious implication. If businesses are constrained by bad policy, policymakers, not businessmen, should get the blame for "undue favours".

Take coal allocation. Government won't allow free mining and free pricing of coal. Under a state monopoly, businesses that need coal apply for captive coal mines. Coal is turned into ascarce resource to be doled out at official discretion. This system is guaranteed to produce "undue favours".

Babus and mantrishave loved this for decades. Businessmen have had to suffer it. But the Coalgate chatter is mostly on "crooked" businessmen.

How can policymakers be made to take the blame for bad policy? The usual answer — voters will punish bad policy — is inadequate. Voters rarely respond to policy outcomes that affect their lives indirectly. The coal policy does affect voters: it starves power producers of coal and makes electricity scarce and costlier. But the link is not simple and direct enough to generate popular anger.

That's the case with many bad policies. And that's why governments in democracies get away with so many terrible decisions. And that's also partly why businesses get demonised. When a "corruption" case hits headlines, it's easier to blame rich businessmen than try to fathom policy.

It is quite amusing to note economic indications whenever a cruel exposure of dark secrets surfaces. So,it is a direct reply to internal migrant story that retail inflation for farm and rural workers eased to 12.78% and 12.44% in September, respectively from 13.21% and 12.89% in August this year and interestingly at the same time,Economists suggest further hike in repo rate to check inflation!

Your PF is not safe at all as it is online and anybody may draw it for you.Technically it is cakewalk. Illegal, unconstitutional UID has become mandatory despite Supreme court decision to have essential services, salary and PF Pension which go happily to the market without information. UID is a tool to finish PDS as Food security act has to be> Now further twist to the story as Smart card technology can help India save around Rs 20,000 crore in the PDS by eliminating ghost beneficiaries who cause huge leakage in the system, a senior government official said today.Referring to the success of smart card based national health insurance scheme, Anil Swarup, Additional Secretary in the Cabinet Secretariat, said: "The technology can bring in transparency in the PDS and the country can save around Rs 20,000 crore per annum."

The technology helps keep a track on what is happening on real time basis.

"The data can be sent for periodic analysis to find how much grain is needed at which shop. The whole system takes a transparent shape," Swarup said.

IBNLive

PM says satisfied with coal block allocations

Reuters India-1 hour ago

The comments were the first attributed to Singh since a case was filed this week against three companies in a scandal, dubbed "Coalgate," ...

Top Indian industrialist Birla accused of conspiracy in 'Coalgate ...

The National-16-Oct-2013

The scandal, dubbed "Coalgate," concerns corruption and favouritism in the government's allocation of coal-mining rights between 2004 and ...

Coal-Gate: all files aren't missing, some never existed, says ...

NDTV-19-Sep-2013

The coal scandal is hyper-sensitive for the government because for ... The CBI ,whose investigation into "Coal-Gate" is being monitored by the ...

Firstpost

Coalgate is a matter of national interest: Court

NitiCentral-04-Oct-2013

Coalgate is a matter of national interest: Court A Delhi court on Friday said the controversy surrounding the Coalgate scandal is a matter of ...

Coalgate: CBI books Hindalco, ex-coal secretary for corruption

Indian Express-15-Oct-2013

Coalgate: CBI books Hindalco, ex-coal secretary for corruption ... After registering the fresh FIR, its 14th in the multi-crore scandal, coordinated ...

Coalgate and the befuddling logic of CBI Director Ranjit Sinha

Firstpost-17-Oct-2013

Coalgate and the befuddling logic of CBI Director Ranjit Sinha ... the recent Pawan Kumar Bansal "Railgate" scandal when the former Railways ...

Coalgate FIR: Bureaucracy shocked by action against 'honest' officer

Times of India-15-Oct-2013

Booked for corruption in a Coalgate case, former coal secretary PC ... had first blown the whistle on a likely scandal in coal block allocations by ...

Coalgate: Manmohan Singh cannot be kept out of CBI probe, says ...

Firstpost-18-Oct-2013Share

Coalgate: Manmohan Singh cannot be kept out of CBI probe, says Jaitley ... He said successive corruption scandals like the spectrum and coal ...

The Public Distribution System (PDS) is run jointly by the Centre and state governments.

To check diversion of foodgrains meant for poor people, states are deploying various technologies like food coupons, barcoded ration cards, etc for delivery of PDS commodities to the beneficiaries.

Speaking on multiple applications of smart cards, Rajat Moona, Director, CDAC Technology, said that there is an emerging need for a single card which serves the purpose for different services.

"We have not moved beyond providing identity solutions and digital signature. There is need to look for more applications," he said.

Apart from national health insurance scheme, the smart card technology is being used by the transport department for driving licence and vehicle registration certificates.

There are about 37 million driving licences and 41 million RCs have been issued in about 24 states on smart card technology, according to industry estimates.

Here you are! It is the reality of trickling economy.

Hinting at the clinching of a deal for setting up of two more reactors in theKudankulam Nuclear Power Project during his visit, Prime Minister Manmohan Singhhas expressed confidence that it would be "finalised shortly".

Asserting that cooperation in nuclear energy production will continue between the two countries, he has also offered to Russia an additional site in West Bengal for location of a reactor in case the originally proposed site in Haripur was not found feasible.

"Indian and Russian companies have been holding negotiations on finalising arrangements for Kudankulam Units 3 and 4 and I am confident that these contracts would be finalised shortly," Singh told the Russian media ahead of his two-day visit to Moscow beginning tomorrow.

Hectic negotiations are on between the two sides on clinching a deal on the two new reactors in Kudankulam against the backdrop of the Russian concerns over the civil liability issues arising out of the nuclear liability law in India.

Russia is opposed to liability provisions claiming it has an inter-governmental agreement on Kudankulam, which precedes the law.

India has suggested some parameters that will govern the liability issues on Kudankulam and has asked the state-owned insurer General Insurance Corporation (GIC) to work on an insurance policy that will also lay down guidelines of liability for suppliers equipment.

Officials are confident that the deal would be signed between the companies of the two countries during the visit.

Singh said India remained interested in expanding nuclear power production in cooperation with Russia and was committed to the full implementation of the Roadmap signed during the visit of President Putin to Indian in March, 2010.

On the other hand as ET invents, Investors holding shares of blue-chip public sector companies such as Coal India, NTPC, and ONGCBSE 0.87 %could expect another year of bumper dividend. Finance minister P Chidambaramon Friday told heads of public sector enterprises that their dividend should not fall below last financial year's level, as his ministry searches for every penny to ensure that the fiscal deficit target for the year is not breached.

"Dividend payments by PSUs will not be less than last year's. In no case will we accept dividend less than last year's," the finance minister told reporters after meeting heads ofOil & Natural Gas Corp, Indian Oil, GAILBSE 0.37 % India, Steel Authority of India (SAIL), NTPCBSE 1.39 % and Coal India, among others. All profit-making companies in which the government has majority stakes are required to declare a dividend of 20% of government's equity, or 20%, of profit after tax, whichever is higher.

In the case of state-run companies in petroleum, power, chemical and other infrastructure sectors, the minimum limit is higher at 30% after tax.

The government expects Rs 73,866 crore this year in the form of dividend, which includes the payout from the Reserve Bank of India as well.

Chidambaram, who has said the fiscal deficit target of 4.8% to the GDP is a red line that will not be breached, is not leaving any stone unturned to ensure that revenues and expenditure remain on track. His ministry has already announced austerity measures to contain non-plan expenditure in the current fiscal.

Higher dividend from PSUs would make up part of the shortfall from disinvestment and possibly lower tax revenues due to slowing economic growth. The ministry, according to an official, is hopeful of meeting the dividend receipt target in the current fiscal and has not sought any special dividend. The situation would be reviewed in January close to when the government finalises its accounts for the year, the official said.

The government received 55,443 crore as dividend and profit in the last fiscal. Chidambaram also discussed capital expansion plans of the PSUs with the objective of promoting investment and growth.

"Most of the PSUs will achieve their capex plan. Some half-a-dozen may not. We will revisit those cases in January," the minister said.

Most of the PSU heads assured the minister that they would meet the capex target for the current fiscal.

ONGC chairman Sudhir Vasudeva told reporters, "The finance minister was fully satisfied by the performance of ONGC. Our first half capital expenditure target was over Rs 14,000 crore. We have spent 99.3 %. We will spend this fiscal year's capex plan of Rs 35,000 crore. We have cash of around Rs 13,000 crore." SAILBSE 2.42 % was confident of achieving its capex target for the current fiscal, chairman CS Verma told reporters. "We have met 87% of capex target of first half of the year. We will meet capex target of whole year, which is Rs 11,500 crore," he said.

According to Michael Hartnett of BofA-ML, global investors are undisturbed by the events in Washington, and remain bullish onstocks and bearish on bonds and commodities.

High cash levels would result in emerging markets continuing with quiet contrarian rally and may see further upside into year-end.

Back home, the rupee has appreciated against the US dollar and the current account deficit situation is seen improving.

The rupee closed at 61.27 per dollar, down 4 paise, against its previous close of 61.23. It had breached 61 per dollar in early trade to hit over 2-month high of 60.92 in trade today.

The forex assets on October 11 stood at $250.85 billion, up $1.53 billion, week on week and forex reserves were up 1.51 billion at $279.24 billon, week on week.

"The worst for the Indian market is behind us. We are bullish on the market. In all likelihood, the US FED may continue with its easy-money policy till February and this is positive for us and global markets," said Varun Goel, Head of PMS, Karvy Private Wealth.

"We are of the view that CAD would be less than 3.5 per cent. There are concerns on GDPgrowth but the recent comments from the RBI suggest that it may revive by year-end. We maintain our Sensex target of 22,400 for March-2014," he added.

According to analysts, investors should now hold on to bluechips and at the same time start hunting for quality midcap stocks as the market is set to hit new highs on the back of strong liquidity.

"The investment strategy would be to continue to be with dominant leaders. While theeconomy itself may not turn around very much in the near term, you will see weak IIP numbers and credit growth. But the overall money flow into equities is positive. So, we need to hold the leaders and keep a broad basket. We must look at specific midcaps where the business fundamentals are very strong," said market expert Satish Ramanathan.

The Nifty closed at at 6,189.35 up 143.50 points or 2.37 per cent, its highest level since November 10, 2010. The index touched intraday high of 6,201.45 and a low of 6,070.90. The index shut shop near 2013 high of 6187.3 made on May 17, 2013.

The index is now only 170 points away from its all-time high hit on January 10, 2008.

The S&P BSE Sensex closed at 20,882.89, up 467.38 points or 2.29 per cent. It touched a high of 20,932.23 and a low of 20,486.78 in trade today. The benchmark is 325 points away from conquering all-time high levels.

According to analysts, the way things are looking positive for India and the liquidity force will soon take the Nifty to higher levels.

"The economic growth also is expected to pick up in the next one year. This is the time to invest. This is not a time to sit back and think whether the market will go down by 200-300 points Nifty or whether it will go up back to the 6200-6400 levels. My own expectation is it will go much higher from here," said investment advisor Gul Tekchandani in an interview to ET Now.

Mitesh Thacker, Technical Analyst, miteshthacker.com, is of the view that traders can trade with a positive as the market has not given any negative signals.

"We are at important levels. What has happened is that this time we have some strong buy signals on the individual stock charts as well. So, may be we will get past 6,150-6,200 towards 6,350. As of now the rally is not showing weakness," he said.

CBI's coal dilemma: Is PM 'Competent Authority' or the Minister-in-Charge?

The stewardship of the Coal Ministry continues to haunt Prime Minister Manmohan Singh and the CBI.

Sources told The Indian Express that CBI officials, working on the FIR against Kumar Mangalam Birla and ex-Coal Secretary P C Parakh had initially made references to the Prime Minister because he was Coal Minister when Hindalco got the Talabira II coal block.

In the final draft, approved by agency Director Ranjit Sinha, however, these references appeared as "competent authority'' and "unknown public servants.''

This isn't the first time that there has been an internal debate within the CBI on making a reference to the Prime Minister in the coal case.

As first reported by The Indian Express on September 4, the key CBI investigator had put on record what he called the "requirement'' to examine the Prime Minister among a lengthy list of "pending actions'' in the case. When that file reached Sinha, he is said to have clearly noted that "at this stage," the PM's examination wasn't required.

That the Prime Minister had approved of the allocation is a fact being repeatedly underlined by Parakh in several interviews after the FIR in which his refrain is that if he (Parakh) has been named as a ``conspirator'' by the CBI, so should the Prime Minister.

CBI officials clarified that the filing of the FIR was an "independent" decision and that no legal advice from any Government law officer was sought in the case. Interestingly, the CBI is expected to file a clutch of other FIRs in the coal block allocation case before October 29, the next hearing in the apex court.

Speaking to The Indian Express today, the CBI Director said that while he did not want to get into the details of proposals and drafts, the agency's case against Parakh and Birla was on a ``sound footing.''

http://www.indianexpress.com/news/cbis-coal-dilemma-is-pm-competent-authority-or-the-ministerincharge-/1184064/?google_editors_picks=true

Full text of letter released by PMO on coal allocation

Talabira Coal Block Allocation Matter

There has been extensive media coverage recently of the matter relating to the allocation of Talabira-II and III coal blocks in Odisha to Mahanadi Coalfields Ltd, Neyveli Lignite Corporation and Hindalco.

* Coal block allocations, including this one, are the subject of a CBI inquiry which is being monitored by the Supreme Court. However, the Talabira coal block allocation is a case where the final decision differed from the earlier recommendation of the Screening Committee, and this was done following a representation received in the Prime Minister's Office from one of the parties, which was referred to the Ministry of Coal.

* The Prime Minister is satisfied that the final decision taken in this regard was entirely appropriate and is based on the merits of the case placed before him. The details of the processing at different stages of the decision making are summarized in the Annexure to clarify the position.

* It is recognized that this allocation is subject to an ongoing investigation. No impediment is being placed on the CBI to continue the investigation and seek fresh information which may have a bearing on the case.

* The investigation on this and other matters must take their normal course under the law.

Annexure

1. The Prime Minister received a letter dated 7.5.2005 from Shri Kumar Mangalam Birlarequesting allocation of Talabira-II and III coal blocks in Odisha to Hindalco for its 650 MW captive power plant in its Integrated Aluminium Project in Sambalpur District, Odisha and for a 100 MW captive plant for the expansion of its Hirakud Aluminium plant in Odisha. The letter was acknowledged by the Prime Minister who noted on the letter- "Please get a report from Coal Ministry".

2. The Prime Minister's Office forwarded the letter to the Ministry of Coal on 25.5.2005 requesting it to look into the matter and send a report.

3. Shri Kumar Mangalam Birla submitted another letter to the Prime Minister on 17.6.2005 repeating the request. This letter was linked to the earlier reference and sent to the Ministry of Coal with a request to send their report on the matter.

4. In August 2005, Ministry of Coal sent its file on the matter to the Prime Minister. In the file, it was mentioned that the Screening Committee had considered three major contenders for allocation of Talabira-II and decided to allocate this block to Neyveli Lignite Corporation (NLC) as:

(i) adequate coal linkages had been provided to Hindalco from Mahanadi Coalfields Ltd. (MCL) a long time back and Hindalco had not used the coal,

(ii) Talabira-II & III blocks needed to be developed together to extract an additional 30 million tonnes of coal which would have gone waste otherwise at the boundaries of each block, (Talabira-III is a coal block which had been separately allocated to Mahanadi Coalfields Ltd.) and

(iii) NLC & Mahanadi Coalfields Ltd. can develop the two blocks together as one large mine through a Joint Venture (JV).

Shri Kumar Mangalam Birla had requested for allocation of Talabira-II to Hindalco as:

(i) Hindalco was the first applicant for it as long back as 1996,

(ii) the coal linkage granted earlier was not used as a bauxite mine lease relating to the aluminium plant had not materialized,

(iii) in view of the current shortage of coal, Mahanadi Coalfields Ltd. will not be able to supply coal as per the earlier linkage, and

(iv) the Government of Odisha favoured allocation of Talabira-II to Hindalco in preference to NLC.

5. While the file was being processed in PMO, the Prime Minister received a letter dated 17.8.2005 from the Chief Minister of Odisha on the allotment of Talabira-II to Hindalco. The CM's letter mentioned that the State Government had assigned topmost priority to the allocation of Talabira-II to Hindalco and had strongly supported the case in the Steering Committee meeting. The letter mentioned that aluminium plants should get higher priority over independent power plants as they generate more employment, create more wealth for the country and add to the growth of themanufacturing sector directly. Further, it stated that it is equitable to accord higher priority to units adding more value through manufacturing within the state where the coal mine is located. The letter urged that these special considerations be kept in mind and the matter examined expeditiously.

6. On 29.8.2005, the ministry of coal file on the matter was returned with the comment that while the file was being processed, a letter was received from Chief Minister, Odisha and the Ministry of Coal may please take this letter of CM, Odisha on record, re-examine the matter in light thereof and resubmit the file.

7. Ministry of coal resubmitted the file on 16.9.2005 with the proposal that

i) Talabira II & III be mined as a single mine with the mining done by a JV formed between MCL, NLC & Hindalco.

ii) The shareholding of the JV between MCL:NLC:Hindalco to be 70:15:15.

iii) Mahanadi Coalfields Ltd's equity shareholding of 70% would approximately equal Talabira-III's extractable reserves as a proportion of the total of the two blocks. Under the sharing arrangement, 70% of the total annual production will be handed over to Mahanadi Coalfields Ltd.

iv) The remaining 30% of the annual production will be shared equally between Hindalco and NLC with each getting 15%.

v) The satisfaction level of NLC would be 29% of its total requirement and of Hindalco, 81.5%.

8. The reasoning given by the ministry of coal was that:

i) Talabira-II & III combined have reserves of 553 million tonnes.

ii) The total requirement of coal from these blocks from the three main contenders is 503 million tonnes, with NLC seeking 280 million tonnes, Hindalco seeking 100 million tonnes and Orissa Sponge Iron Ltd (OSIL) seeking 123 million tonnes.

iii) Allocating the blocks to these three would leave little coal for Mahanadi Coalfields Ltd.

iv) NLC may not be dropped as it is a Central PSU already recommended by the Screening Committee. Hindalco's case for allocation has been strongly recommended by the State Government and it has also been an early applicant. OSIL can be accommodated elsewhere.

v) It was further brought out that the Government of Odisha have indicated a clear preference for allotment of the block to Hindalco in the interest of creating more employment and growth of the manufacturing sector in the state.

vi) It was also pointed out that while both Hindalco and NLC get the same amount of coal, Hindalco's satisfaction level is about 80%, whereas NLC's is much lower.. However, as NLC and Mahanadi Coalfields Ltd. are proposing to set up a JV power plant from the coal available from Talabira-II & III, NLC's full requirements could be met from Mahanadi Coalfields Ltd's reserves in Talabira-III. This would fully meet the coal requirement of the two CPSUs to set up their power project and protect the interests of the CPSUs.

9. While processing this proposal in PMO, it was noted that the ownership ratio in the JV ownership was not in congruence with the guidelines approved by PM on 09.06.2005 which required this ratio to be in proportion to the assessed requirement of coal of each allocatee. As per this guideline, the NLC:Hindalco ratio in their 30% share should be 22.5:7.5 and not 15:15 as was proposed.

10. While recommending the case to the Prime Minister, it was clearly brought out that:

i) The state government of Odisha has strongly recommended allocation of Talabira-II to Hindalco and supported it in the Screening Committee. Chief Minister, Odisha had reiterated this position assigning topmost priority to the allocation of Talabira-II in favour of Hindalco.

ii) Under the MMDR Act, the mining lease for coal is granted by the State Government with the previous approval of the Central Government. Thus, under the federal framework of sharing mining rights as provided under the Act, both the Central and State Governments need to concur before an allocatee can be granted a mining lease. Accordingly, the strong recommendation of the Government of Odisha is important and has to be given due consideration while taking a decision in the matter.

iii) The ministry's suggestion for allocation of 30% share of production in the JV for Talabira-II & III combined to NLC & Hindalco, with the remaining 70% of the total production taken by MCL has merit and may therefore be considered for acceptance.

iv) As for the NLC:Hindalco equity ratio in the JV, this would require relaxation of guidelines that were approved by PM earlier, but this could be considered as NLC and Mahanadi Coalfields Ltd. are sister PSUs and NLC's requirements of coal could be met from Mahanadi Coalfields Ltd's 70% share of production. This would fully meet the coal requirement of the two CPSUs to set up their power project and protect the interests of the CPSUs.

11. Based on these arguments, and also on the reasoning of the Ministry, it was proposed that Prime Minister may approve:

i) Allocation of Talabira-II & III to a JV owned jointly by MCL:NLC:Hindalco in the ratio 70:15:15 with the other aspects as proposed by the Ministry.

ii) The existing long term coal linkage of Hindalco may be reviewed and suitably reduced after taking into account Hindalco's requirement of coal for the project and the share of Hindalco in the coal mined by the JV in Talabira-II & III.

12. The Prime Minister approved the proposal on 1.10.2005.

(Source: pmindia.gov.in)

Over 62 lakh people in UP still live in slums

Slum-dwellers are people living in compact areas with a population of at least 300, in unhygienic environment with inadequate infrastructure and lacking proper sanitary and drinking water facilities.

LUCKNOW: Although the slum population of UP dropped from 11% to 9.5% in a decade (from 2001-2011), over 62 lakh people in the state still live in slums. The state, according to primary census data 2011, do not attain the top position in terms of households, but it ranks fourth in ascending order when it comes to the absolute number of slum-dwellers. In UP, 62,69,965 people live in 10,66,363 households. Nationally too, the slum population has come down to 22.4% in 2011 as against 23.5% in 2001, though 6.54 crore still live in slums in India.

Out of 648 statutory towns, 293 are slum-reported towns in UP. While 46,78,326 slums are recognized by the UP government, only 5,62,548 are notified and 9,99,091 are identified as slums. The census data on slums identified slum-dwellers as people living in compact areas with a population of at least 300, in unhygienic environment with inadequate infrastructure and lacking proper sanitary and drinking water facilities. Earlier, only people in areas notified or recognized as slums by state or local authorities were counted.

Child population (0-6 years), according to the census, living in UP slums has come down drastically in a decade. The proportion of child population to the total slum population, in census 2011, lies between 13.1-14 which was above 15.1 in the census 2011.

UP has, however, witnessed a decline in the child sex ratio. Though it doesn't occupy the bottom fifth position, the child sex ratio is between 876-900 girls per 1,000 boys. The census of 2011 shows that the child sex ratio in the state was 901-925 girls per 1,000 boys. India's slums have a far better child sex ratio of 922 girls per 1,000 boys than the non-slum urban population, for which the figure is 902. The sex ratio is at par with the last census, that is, more than 900 women for every 1,000 men.

On the literacy front, no significant improvement is visible in UP slums. With 69% literacy rate, UP slums come in the worst five states. While literacy rate in slums in Arunachal Pradesh is 69.4%, Bihar slums have 68.2% literates. The worst is Chandigarh with 66.4% literacy rate. Countrywide, the literacy rate in slums has gone up to 78% compared to the overall urban literacy of over 84%. The jump in female literacy in slums (from 63% to 72%) is higher than the increase in male literacy from 80% to 84%.

http://timesofindia.indiatimes.com/india/Over-62-lakh-people-in-UP-still-live-in-slums/articleshow/24397159.cms

A seer dreams gold, ASI digs, Narendra Modi mocks

BJP's PM candidate Narendra Modi said that the black money stored in Swiss banks is worth more than 1,000 tonnes of gold. Get that back.

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KOLKATA/DAUNDIYA KHEDA: The Archaeological Survey of India (ASI) is trying to play down its latest excavation, which began on Friday. Its experts are hoping to unearth clues to India's antiquity at the Daundiya Kheda site near Unnao in Uttar Pradesh. The last thing they want to find, it would seem, are pots of gold.

"We already have a 10-member team in place and they will begin work at the site. We will undertake a trial excavation at first, at the top and the bottom of the mound. The entire process will take about a month and a half to complete," Syed Jamal Hasan, director (exploration and excavation), said at ASI's headquarters in Delhi.

But steering public interest away from the dig has been futile, given that 'historical' reasons have been supplanted by 'mystical' ones. The story goes that local seer Shobhan Sarkar was informed in recurrent dreams of 1,000 tonnes of gold buried near Rao Raja Ram Baksh Singh's abandoned fort.

Local folklore has it that Rao Raja Ram Baksh Singh was a small talukdar and gold trader who amassed his wealth by looting the British. He was caught and hanged after the 1857 mutiny, and his buried treasure lay forgotten. Followers of Shobhan Sarkar say similar treasures are waiting to be unearthed at other places such as Adampur village in Fatehpur district.

Sarkar wrote to the Reserve Bank of India about the gold and convinced central minister Charandas Mahant of the authenticity of his visions. Mahant represents Korba Lok Sabhaconstituency and is Union minister of state for agriculture and food processing besides being president of the Chhattisgarh State Congress Committee.

Bharatiya Janata Party's prime ministerial candidate Narendra Modi was forthright in his opinion about the affair: "The whole world is making fun of us. Someone dreamt and the government has gone hunting for gold," he said, adding: "The black money stored in Swiss banks is worth more than 1,000 tonnes of gold. Get that back."

Hasan clarified ASI's interest in the site, when asked about the treasure. "In this case, we are more interested in finding out the antiquity since it holds more value than any gold or silver," he said. Such sites have previously been discovered in the Gangetic basin since settlements usually flourish along the banks of rivers, the ASI director said. The villagers of Daundiya Kheda have occasionally stumbled upon ancient artefacts such as statues and coins in and around the abandoned fort and are convinced something of historical importance is buried there.

http://economictimes.indiatimes.com/news/politics-and-nation/a-seer-dreams-gold-asi-digs-narendra-modi-mocks/articleshow/24361728.cms

Indian coal allocation scam

From Wikipedia, the free encyclopedia

This article needs attention from an expert in Indian politics. The specific problem is:Incomplete. WikiProject Indian politics (or its Portal) may be able to help recruit an expert.(August 2012)

Coal allocation scam or Coalgate,^[1] as referred by the media, is a political scandal concerning the Indian government's allocation of the nation's coal deposits to public sector entities (PSEs) and private companies by Prime Minister Manmohan Singh.^[2] 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.^[3]

The essence of the CAG's argument is that the Government had the authority to allocate coal blocks by a process of competitive bidding, but chose not to.^[3] As a result both public sector enterprises (PSEs) and private firms paid less than they might have otherwise. In its draft report in March the CAG estimated that the "windfall gain" to the allocatees was {INR|10,67,303|c}.^[3] The CAG Final Report tabled in Parliament put the figure at {INR|1,85,591|c}^[4] On 27 August 2012 Indian prime minister Manmohan Singh read a statement in Parliament rebutting the CAG's report both in its reading of the law and the alleged cost of the government's policies.^[5]^[6]^[7]

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. These FIRs accuse them of overstating their net worth, failing to disclose prior coal allocations, and hoarding rather than developing coal allocations.^[8]^[9] The CBI officials investigating the case have speculated that bribery may be involved.^[8]

The issue has received massive media reaction and public outrage. During the monsoon session of the Parliament, the BJP protested the Government's handling of the issue demanding the resignation of the prime minister and refused to have a debate in the Parliament. The deadlock resulted in Parliament functioning only seven of the twenty days of the session.^[10]^[11] The Parliamentary Standing Committee report on Coal and Steel states that all coal blocks distributed between 1993 and 2008 were done in an unauthorized manner and allotment of all mines where production is yet to start should be cancelled.^[12]^[13]

[hide]

1972–2010. Background to Coalgate: history of coal allocations In India[edit]

The coal allocation process[edit]

"In July 1992 Ministry of Coal, issued the instructions for constitution of a Screening Committee for screening proposals received for captive mining by private power generation companies." The Committee was composed of government officials from the Ministry of Coal, the Ministry of Railways, and the relevant state government.^[14] "A number of coal blocks, which were not in the production plan of CIL and … SSCL, were identified in consultation with CIL/SSCL and a list of 143 coal blocks were prepared and placed on the website of the MoC for information of public at large."^[15] Companies could apply for an allocation from among these blocks. If they were successful, they would receive the geological report that had been prepared by the government, and the only payment required from the allocatee was to reimburse the government for their expenses in preparing the geological report.^[16]

Coal allocation guidelines[edit]

The guidelines for the Screening Committee suggest that preference be given to the power and steel sectors (and to large projects within those sectors). They further suggest that in the case of competing applicants for a captive block, a further 10 guidelines may be taken into consideration:

status (stage) level of progress and state of preparedness of the projects;
net worth of the applicant company (or in the case of a new SP/JV, the net worth of their principals);
production capacity as proposed in the application;
maximum recoverable reserve as proposed in the application;
date of commissioning of captive mine as proposed in the application;
date of completion of detailed exploration (in respect of unexplored blocks only) as proposed in the application;
technical experience (in terms of existing capacities in coal/lignite mining and specified end-use);
recommendation of the administrative ministry concerned;
recommendation of the state government concerned (i.e., where the captive block is located);
track record and financial strength of the company.^[17]

Results of the coal allocation program[edit]

The response to the allocation process between 2004 and 2009 was spectacular, with some 44 billion metric tons of coal being allocated to public and private firms.^[18] By way of comparison, the entire world only produces 7.8 billion tons annually, with India being responsible for 585 million tons of this amount.^[19] Under the program, then, captive firms were allocated vast amounts of coal, equating to hundreds of years of supply, for a nominal fee.

Year of allocation	Government Companies		Private Companies		Power Projects		Total
	No. of blocks	GR (in MT)	No. of blocks	GR (in MT)	No. of blocks	GR (in MT)	No. of blocks	GR (in MT)
Up to 2005	29	6,294.72	41	3,336.88	0	0	70	9,631.6
2006	32	12,363.15	15	3,793.14	6	1,635.24	53	17,791.53
2007	34	8,779.08	17	2,111.14	1	972	52	11,862.22
2008	3	509.99	20	2,939.53	1	100	24	3,549.52
2009	1	337	12	5,216.53	3	1,339.02	16	6,892.55
2010	0	0	0	0	1	800	1	800
Total	99	28,283.94	105	17,397.22	12	4,846.26	216	50,527.42

Out of the above 216 blocks, 24 blocks were de-allocated (three blocks in 2003, two blocks in 2006, one block in 2008, one block in 2009, three blocks in 2010, and 14 blocks in 2011) for non-performance of production by the allocatees, and two de-allocated blocks were subsequently reallocated (2003 and 2005) to others. Hence, 194 coal blocks, with aggregates geological reserves of 44.44 billion metric tons, stood allocated as at 31 March 2011.

Source: Draft CAG Report, Table 5.1.^[20]

Given the inherent subjectivity in some of the allocation guidelines, as well as the potential conflicts between guidelines (how does one choose between a small capacity/late stage project and a large capacity/early stage project?) it is unsurprising that in reviewing the allocation process from 1993 to 2005 the CAG says that "there was no clearly spelt out criteria for the allocation of coal mines."^[14] In 2005 the Expert Committee on Coal Sector Reforms provided recommendations on improving the allocation process, and in 2010 the Mines and Minerals (Development and Regulation) Act (MMDR Act), 1957 Amendment Bill was enacted, providing for coal blocks to be sold through a system of competitive bidding.^[21]^[22]

The foregoing supports the following conclusions:

The allocation process prior to 2010 allowed some firms to obtain valuable coal blocks at a nominal expense
The eligible firms took up this option and obtained control of vast amounts of coal in the period 2005–09
The criteria employed for awarding coal allocations were opaque and in some respects subjective.

March 2012. Coalgate explodes: the Draft CAG Report[edit]

Overview

The CAG report, leaked to the press in March as a draft and tabled in Parliament in August, is a performance audit focusing on the allocation of coal blocks and the performance of Coal India in the 2005–09 period. The Draft Report, stretching to over 100 pages—far more detailed and containing more explosive allegations than the toned-down Final Report of some 50 pages—was the document that sparked the Coalgate furor. The Draft Report covers the following topics:

Overview (pp. 1–2)
Audit Framework (pp. 3–4)
Institutional Framework (p. 5–10)
Gaps in Supply and Demand (p. 11–17)
Coal Blocks-Allocation and Production Performance (p. 18–55)
Production Performance of CIL (p. 56–83)
Conclusion and Recommendations (pp. 84–88)
Annexures (pp. 89–110)

As far as Coalgate is concerned, the key passages of the Draft Report are in Chapter 5, where the CAG charges that:

In 2005 the Government had the legal authority to allocate coal blocks by auction rather than the Screening Committee, but chose not to do so.^[23]
As a result of its failure to auction the coal blocks, public and private companies obtained "windfall gains" of 1067303 crore(US$160 billion), with private companies obtaining 4795 billion (US$73 billion) (45%) and government companies obtaining 5078.03 billion (US$78 billion) (55%).^[24]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

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. The answer to this question turns on whether the Government could institute competitive bidding by an administrative decision under the current statute or whether it needed to amend the statute to do so.

The CAG devotes ten pages of its report to reviewing the legal basis for an auction, and comes to the following conclusion:

"In sum there were a series of correspondences with the Ministry for Law and Justice for drawing conclusion on the legal feasibility of the proposed amendments to the CMN Act/MMDR Act or through Administrative order to introduce auctioning/competitive bidding process for allocation of coal blocks for captive mining. In fact, 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."^[23]

Other parts of the report, however, suggest that while an administrative decision might be sufficient legal basis for instituting competitive bidding, the "legal footing" of competitive bidding would be improved if the statute were amended to specifically provide for it. i.e. there were some questions around the legality of using an administrative decision as the ground for an auction process under the current statute. Quoting the Law Secretary in August 2006:

"there is no express statutory provision providing for the manner of allocating coal blocks, it is done through a mechanism of Inter-Ministerial Group called the Screening Committee ... The Screening Committee had been constituted by means of administrative guidelines. Since, under the current dispensation, the allocation of coal blocks is purely administrative in nature, it was felt that the process of auction through competitive bidding can also be done through such administrative arrangements. In fact, this is the basis of our earlier legal advice. This according to the administrative Ministry has been questioned from time to time for legal sanction. If provision is made for competitive bidding in the Act itself or by virtue of rules framed under the Act the bidding process would definitely placed on a higher level of legal footing."^[25]

So while the CAG certainly makes the case that the Government had legal grounds on which to introduce competitive bidding into the coal allocation process, saying that there was "no legal impediment" to doing so perhaps overstates their case.

Second CAG charge: "windfall gains" to the allocatees were 1067303 crore (US$160 billion)[edit]

If the most important charge made by the CAG was that of the Government's legal authority to auction the coal blocks, the one that drew the most attention was certainly the size of the "windfall gain" accruing to the allocatees. On pp. 32–34 of the Draft Report, the CAG estimates these to be 10673.03 billion (US$160 billion) with details in the following table:

**Windfall Gains to Allocatees (in crore)**
Calendar Year	Government Companies			Private Companies			Government + Private Companies
	90% of GR in MT	Windfall gain historic rates	Windfall gain Mar 2011 rates	90% of GR in MT	Windfall gain historic rates	Windfall gain Mar 2011 rates	90% of GR in MT	Windfall gain historic rates	Windfall gain Mar 2011 rates
2004	1,709	45,807	56,949	0	0	0	1,709	45,807	56,949
2005	1,388	34,056	45,561	1,776	39,146	85,523	3,163	73,203	131,084
2006	8,660	185,119	259,547	3,011	62,085	111,764	11,671	247,204	371,311
2007	7,000	64,066	207,098	1,747	38,284	51,502	8,746	102,350	258,599
2008	288	6,704	7,364	2,682	54,445	80,137	2,970	61,149	87,501
2009	303	2,438	11,285	4,605	99,735	150,574	4,908	102,174	161,859
Total	19,349	337,471	587,803	13,820	293,695	479,500	33,169	631,166	1,067,303

The table employs the following calculations for windfall gain:

windfall gain/ton = market price/ton – production cost/ton

windfall gain = windfall gain/ton x number of tons allocated x 90% (to reflect 90% confidence in the geology of the reserve)

Note that while the windfall gain/ton is fairly modest 322 (US$4.90), because of the vast size of the coal allocations, the total figure for the windfall gain is very large. Note also that the figure stated as a windfall gain would in fact accrue to the allocatee over the life of the reserve, which would likely exceed 100 years. Thus, using any reasonable discount rate, the Present value of the windfall gain will be dramatically smaller (perhaps one tenth) of the windfall gain stated in the CAG Report.^[26]

While the headline number of 10673.03 billion (US$160 billion) was sure to attract the attention of the public, in the Annexures to the report the CAG listed the windfall gains by company, allowing readers to see who exactly benefited from the allocation program, and by how much. The resulting list, a veritable Who's Who of Indian commerce, ensured that the topic of coal allocations would be one of the most written about stories of 2012.

March–August 2012. Coalgate grows: the media, the BJP, and the CBI and Income Tax investigation[edit]

On 22 March, the Times Of India, broke the story on the contents of the Draft CAG Report:

NEW DELHI: The CAG is at it again. About 16 months after it rocked the UPA government with its explosive report on allocation of 2G spectrum and licences, the Comptroller & Auditor General's draft report titled 'Performance Audit Of Coal Block Allocations' says the government has extended "undue benefits", totalling a mind-boggling Rs 10.67 trillion (short scale), to commercial entities by giving them 155 coal acreages without auction between 2004 and 2009. The beneficiaries include some 100 private companies, as well as some public sector units, in industries such as power, steel and cement.The Income Tax Department was also roped in to look into the financial frauds and follow the money trail.^[27]^[28]

The story listed the following companies as the leading beneficiaries of the coal allocations:

**Windfall Gains to Allocatees (in crore)**
Private Sector		Public Sector
Company	Gains	Company	Gains
Strategic Energy Tech System (Tata-Sasol)	33,060	NTPC Limited	35,024
Electro Steel Casting	26,320	TNEB & MSMCL	26,584
Jindal Steel and Power	21,226	NTPC	22,301
Bhushan Power & Steel Ltd & others	15,967	JSEB & BSMDC	18,648
Ram Swarup & others	15,633	MMTC	18,628
JSPL & Gagan Sponge Iron Ltd	12,767	WBPDCL	17,358
MCL/JSW/JPL & others	10,419	CMDC	16,498
Tata Steel Ltd	7,161	MSEB & GSECL	15,335
Chhattisgarh Captive Coal Co Ltd	7,023	JSMDCL	11,988
CESC Ltd & J&S Infrastructure	6,851	MPSMCL	9,947

Allegations against S Jagathrakshakan[edit]

Allegations against Subodh Kant Sahai[edit]

Allegations against Ajay Sancheti and his link with Nitin Gadkari[edit]

Ajay Sancheti's SMS Infrastructure Ltd. was allegedly allocated coal blocks in Chhattisgarh at low rates.^[36] He is a BJP Rajya SabhaMP and is believed to be in close relation with Nitin Gadkari. According to the CAG, the allocation of the coal block to SMS Infrastructure Ltd. has caused a loss of Rs.10 billion.^[37]

Allegations against Vijay Darda and Rajendra Darda[edit]

Vijay Darda, a Congress MP and his brother Rajendra Darda, the education minister of Maharashtra, have been accused of direct and active involvement in the affairs of three companies JLD Yavatmal Energy, JAS Infrastructure & Power Ltd., AMR Iron & Steel Pvt. Ltd, which received coal blocks illegally by means of inflating their financial statements and overriding the legal tender process.^[38]^[39]

Allegations against Premchand Gupta[edit]

UPA partner Rashtriya Janata Dal's leader Premchand Gupta's sons' company, new in the steel business applied for a coal block when Premchand Gupta was the Union minister for corporate affairs and bagged it about a month after his tenure ended along with that of his government. The company in question is IST Steel & Power – an associate company of the IST Group, which is owned and run by Premchand Guptas two sons Mayur and Gaurav. IST Steel, along with cement majors Gujarat Ambuja and Lafarge, was allocated the Dahegaon/Makardhokra IV block in Maharashtra. The company, which applied for a block on 12 January 2007, and was awarded it on 17 June 2009, is sitting on reserves of 70.74 million tonnes. The reserves it controls are more than the combined reserves held by much larger companies – Gujarat Ambuja and Lafarge. Gupta, who belongs to the Rashtriya Janata Dal headed by Bihar leader Lalu Prasad Yadav, was the minister of state for corporate affairs in UPA-I when his party was a constituent of the Congress-led coalition with 21 seats in Lok Sabha. However Mr Gupta maintains he had no involvement in IST Steel and denies influencing the coal-block allocation process.^[40]

Allegations against Naveen Jindal[edit]

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.

On 27 February 2009, two private companies got huge coal blocks. Both the blocks were in Orissa and while one was over 300 mega metric tones, the other was over 1500 mega metric tones. Combined worth of these blocks was well over Rs2 trillion (short scale) and these blocks were meant for the liquification of coal. One of these blocks was awarded to Jindal. Naveen Jindal's Jindal Steel and Power was the company which was allotted the Talcher coal field in Angul in Orissa in 2009, well after the self-imposed cut off date by the Centre on allocation of coal blocks.

The Opposition alleged that the Government violated all norms to give him coal fields. Naveen Jindal, however, denied any wrongdoing.^[41]^[42]

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.^[43]^[44]

On June 11, 2013, CBI has booked former Minister of State for Coal Dasari Narayan Rao and Congress MP Naveen Jindal for alleged cheating, graft and criminal misconduct in its 12th FIR in the coal blocks allocation scam.^[45]

BJP Response[edit]

In response to the Times of India story there was an uproar in Parliament, with the BJP charging the government with corruption and demanding a court-monitored probe into coal allocations:

"'The CWG scam is (to the tune) of Rs 700 billion, 2G scam is Rs 1.76 trillion (short scale). But, now the new coal scam is Rs 10.67 trillion (short scale). It is a government of scams... from airwaves to mining, everywhere the government is involved in scams,' party spokesperson Prakash Javadekar told reporters."^[46]

CBI and Income Tax Investigation[edit]

On 31 May 2012, Central Vigilance Commission (CVC) based on a complaint of two Bharatiya Janata Party Member of ParliamentPrakash Javadekar and Hansraj Ahir directed a CBI enquiry.Income Tax Department also started an enquiry based on the reference by the two BJP MP's.^[47]^[48]

There were leaks of the report in media in March 2012 which claimed the figure to be around 10600 billion (US$160 billion).^[49] It is called by the media as the Mother of all Scams.^[50]^[51] Discussion about the issue was placed in the Parliament on 26 Aug 2012 by the prime minister Manmohan Singh with wide protests from the opposition.^[52]

According to the Comptroller and Auditor General of India, this is a leak of the initial draft and the details being brought out were observations which are under discussion at a very preliminary stage.^[53] On 29 May 2012, Prime Minister Manmohan Singh offered to give up his public life if found guilty in this scam.^[54]

Formation of Inter-Ministerial Group (IMG)[edit]

At the end of June 2012, coal ministry decided to form an Inter-Ministerial Group (IMG), to decide on either de-allocation or forfeiting the Bank Guarantees (BG) of the companies that did not develop allotted coal blocks. Zohra Chatterji, additional secretary, coal ministry was named as Chairman of the IMG. Other IMG members include representatives from power, steel, departments of economic affairs, industrial policy and promotion, and law and justice.^[55]

Significantly, the decision was taken after the CVC had already ordered a CBI enquiry into alleged irregularities.^[55]

As of 26 September 2012, the IMG has reviewed 31 coal blocks. Out of these, it has recommended de-allocation of 13 coal blocks and encashment of bank guarantees of 14 allottees.^[56]

Sr No	Name of Company	Location	Recommendation (Cancellation or deduction of BG)	Remarks	Source
1	Castron Mining Ltd	Bramhadih, Jharkhand	Deallocate	Was allocated in 1996	^[57]
2	Field Mining and Ispat Ltd	Chinora and Warora (Southern part), Maharashtra	Deallocate	Was allocated in 2003	^[57]
3	Domco Smokeless Fuels Pvt. Ltd	the Lalgarh (North) West Bokaro, Jharkhand	Deallocate	Was allocated in 2005	^[57]
4	Monnet Ispat & Energy Ltd.	Utkal B2, Orissa	Asked to submit BG of 3 years' royalty, failing which the block may be de-allocated	Was allocated in 1999	^[57]
5	Shri Virangana Steels Ltd	Marki Mangli-II, III and IV blocks in Maharashtra	Deduction of BG		^[57]
6	Adhunik Metaliks, Adhunik Corporation, Orissa Sponge Iron, Deepak Steel & Power, SMC Power Generation Ltd, Metaliks Ltd, Visa Steel Ltd.	New Patrapara, Orissa	Deallocate		^[58]
7	SKS Ispat	Rawanwara North, Madhya Pradesh	Deallocate		^[58]
8	Tata Sponge	Radhikapur East, Orissa	Deduction of BG		^[58]
9	Bhushan Steel	Bijahan, Orissa	Deduction of BG		^[58]
10	Himachal EMTA Power Ltd & JSW Steel Ltd	Gourangdih ABC	Deallocate	Was allocated in 2009	^[43]
11	Gupta Metaliks & Power Ltd & Gupta Coalfields Ltd	Nerad Malegaon	Deduction of BG		^[43]
12	Usha martin Ltd	Lohari	Deduction of BG		^[43]
13	Electrosteel Castings	North Dhadu	Deallocate		^[59]
14		Choritand Telaiya	Deallocate		^[59]
15	Maharashtra Seamless	Gondkhari	Deallocate		^[59]
16	ArcelorMittal and GVK Power	Seregarha	Deduction of BG		^[59]
17	Jayaswal Neco	Moitra	Deduction of BG		^[59]
18	Neelachal Iron & Steel	Dumri	Deduction of BG		^[59]
19	DB Power	Durgapur II/ Sariya	Deduction of BG		^[59]
20	IST Steel and Power Ltd, Gujarat Ambuja Cement and Lafarge India	Dahegaon-Makardhokra IV, Maharashtra	Deallocate	The block was allocated on 17 June 2009. IST Steel and Power is owned by Mayur and Gaurav Gupta, sons of former Union corporate affairs minister Prem Chand Gupta.	^[60]
21	Electrotherm (India) Ltd and Grasim Industries	Bhaskarpara, Chhattisgarh	Deallocate	The block was allocated on 21 November 2008	^[60]

August 2012. Coalgate reaches Parliament: the Final Report and Manmohan Singh's rebuttal in Parliament[edit]

The CAG Final Report[edit]

Overview[edit]

On 17 August the CAG submitted its Final Report to Parliament.^[61]^[62] Much less detailed than the Draft Report, the Final Report still made the same charges against the government:

The Government had the authority to auction the coal blocks but chose not to.^[63]
As a result allocatees received a "windfall gain" from the program.^[64]

The Final Report had the following outline:

Preface (pp. i–ii).
Executive Summary (pp. iii–viii)
Chapter 1. Coal—An Overview (pp. 1–6)
Chapter 2. Audit Framework (pp. 7–8)
Chapter 3. Augmentation of Coal Production (pp. 9–20)
Chapter 4. Allocation of Captive Coal Blocks (pp. 21–32)
Chapter 5. Productive Performance of Captive Coal Blocks (pp. 33–42)
Chapter 6. Conclusion and Recommendation (pp. 43–45)^[65]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

In Chapter 4 of the Final Report, the CAG continued its contention that the Government had the legal authority under the existing statute to auction coal by making an administrative decision, rather than needing to amend the statute itself. Pages 22–27 chronicle key correspondence between the Secretary (Coal), the Minister of State (Coal), the prime minister's Office, and the Department of Legal Affairs from 2004 to 2012. From this record, the CAG draws the following conclusions:

The Government decided to bring transparency and objectivity in the allocation process of coal blocks, with 28 June 2004 taken as the cutoff date.
The DLA advice of July 2006 was sufficient grounds upon which to introduce competitive bidding, by means of an administrative decision.
Despite this DLA advice, there was prolonged legal examination as to whether an administrative decision or amendment of the statute was necessary for competitive bidding to be introduced. This stalled the decisionmaking process through 2009.
In the period between July 2006 and the end of 2009, 38 coal blocks were allocated under the existing process of allocation, "which lacked transparency, objectivity, and competition."^[63]

Second CAG charge: "windfall gains" to the allocatees were 185591 crore (US$28 billion)[edit]

The biggest change from the Draft Report was the dramatic reduction in the windfall gains from 10673.03 billion (US$160 billion) to 1855.91 billion (US$28 billion)^[66] This change is due to:

windfall gain/ton decreased 8% from 322 (US$4.90) in the Draft Report to 295 (US$4.50) in the Final Report
number of tons decreased 81% from 33.169 to 6.283 billion metric tons of coal. This is because the Final Report considers "extractable coal" (i.e. coal that could actually be used in production) as against the Draft Report, which considered coal in situ (i.e. coal in the ground without taking into account losses that occur during mining and washing the coal).^[67]

Particulars	Extractable Reserves of OC	Average CIL Sale Price/Tonne	Average CIL Cost Price/Tonne	Financing Cost/Tonne	Net Benefit/Ton	Net Benefit
OC Mines	3,970	1,028	583	150	295	117,275
Mixed Mines, mine plan avail	1,011	1,028	583	150	295	29,853
Mixed Mines, mine plan unavail	1,302	1,028	583	150	295	38,463
Total	6,283	1,028	583	150	295	185,591

Source: CAG Final Report, p. 31.

Note, these are still huge coal volumes compared to India's annual production and represent many decades of the actual coal needs of the captive firms. The headline number of 185591 crore (US$28 billion) is the gain that would accrue to captive firms over these decades, and there is no attempt to derive a Present value of the gain. However, considering inflation rate equalling discount rate, the gain calculated reflects the nearly accurate value.

Manmohan Singh's Rebuttal in Parliament[edit]

Overview[edit]

Typically once a CAG Report has been tabled (submitted to Parliament) it is received by the Public Accounts Committee (PAC). The PAC then calls in the relevant minister to discuss the report, and the PAC prepares its own report, which is then discussed in Parliament as a whole. In an unusual step, on 27 August, the prime minister bypassed this process and made a statement to Parliament directly, addressing the findings of the Final CAG Report.^[68] Hereafter, Prime Minister's Statement.

Stretching to 32 paragraphs, Singh's argument makes three main points:

From a policy perspective, he agrees with CAG that all parties consented to a move from allocation by screening committee to competitive bidding should begin.
From a legal perspective, he disputes the CAG's understanding of the law, and says, indeed, that such a conclusion could only have been arrived at by a selective reading of the evidence.
From a practical perspective, he notes that even were the legal path clear, it was not simply possible to introduce the competitive bidding process by fiat. There were multiple parties whose consensus was required in the transition to competitive bidding with varied, and sometimes divergent interests.

The major coal and lignite bearing states like West Bengal, Chhattisgarh, Jharkhand, Orissa and Rajasthan that were ruled by opposition parties, were strongly opposed to a switch over to the process of competitive bidding as they felt that it would increase the cost of coal, adversely impact value addition and development of industries in their areas and would dilute their prerogative in the selection of lessees.^[69]

The CAG, Singh argued, had simply ignored the practical realities of policy implementation in their accusation that the Government did not move fast enough in transitioning to competitive bidding.^[70]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

Singh addresses the question of legal authority in paragraphs 14–18 of his Parliamentary statement:

14. The CAG says that competitive bidding could have been introduced in 2006 by amending the existing administrative instructions. This premise of the CAG is flawed.

15. The observation of the CAG that the process of competitive bidding could have been introduced by amending the administrative instructions is based on the opinion expressed by the Department of Legal Affairs in July and August 2006. However, the CAG's observation is based on a selective reading of the opinions given by the Department of Legal Affairs.

16. Initially, the Government had initiated a proposal to introduce competitive bidding by formulating appropriate rules. This matter was referred to the Department of Legal Affairs, which initially opined that amendment to the Coal Mines (Nationalisation) Act would be necessary for this purpose.

17. A meeting was convened in the PMO on 25 July 2005 which was attended by representatives of coal and lignite bearing states. In the meeting the representatives of state governments were opposed to the proposed switch over to competitive bidding. It was further noted that the legislative changes that would be required for the proposed change would require considerable time and the process of allocation of coal blocks for captive mining could not be kept in abeyance for so long given the pressing demand for coal. Therefore, it was decided in this meeting to continue with the allocation of coal blocks through the extant Screening Committee procedure till the new competitive bidding procedure became operational. This was a collective decision of the centre and the state governments concerned.

18. It was only in August 2006 that the Department of Legal Affairs opined that competitive bidding could be introduced through administrative instructions. However, the same Department also opined that legislative amendments would be required for placing the proposed process on a sound legal footing. In a meeting held in September, 2006, Secretary, Department of Legal Affairs categorically opined that having regard to the nature and scope of the relevant legislation, it would be most appropriate to achieve the objective through amendment to the Mines & Minerals (Development & Regulation) Act.
^[71]

Second CAG charge: "windfall gains" to the allocatees were 185591 crore (US$28 billion)[edit]

26. Let me humbly submit that, even if we accept CAG's contention that benefits accrued to private companies, their computations can be questioned on a number of technical points. The CAG has computed financial gains to private parties as being the difference between the average sale price and the production cost of CIL of the estimated extractable reserves of the allocated coal blocks.

Firstly, computation of extractable reserves based on averages would not be correct.
Secondly, the cost of production of coal varies significantly from mine to mine even for CIL due to varying geo-mining conditions, method of extraction, surface features, number of settlements, availability of infrastructure etc.

Thirdly, CIL has been generally mining coal in areas with better infrastructure and more favourable mining conditions, whereas the coal blocks offered for captive mining are generally located in areas with more difficult geological conditions.

Fourthly, a part of the gains would in any case get appropriated by the government through taxation and under the MMDR Bill, presently being considered by the parliament, 26% of the profits earned on coal mining operations would have to be made available for local area development.

Therefore, aggregating the purported financial gains to private parties merely on the basis of the average production costs and sale price of CIL could be highly misleading. Moreover, as the coal blocks were allocated to private companies only for captive purposes for specified end-uses, it would not be appropriate to link the allocated blocks to the price of coal set by CIL.^[72]

Role of Sonia Gandhi[edit]

On August 31, Manmohan Singh met UPA chairperson Sonia Gandhi and communicated to her that his office had cleared the coal block allotment on the recommendation of her political secretary Ahmed Patel. Washing his hands of the tainted coal block allotment, Dr Singh made it clear to Sonia Gandhi that he had no role or interest in determining who the beneficiaries should be. PM explained that his then principal secretary T K A Nair had merely coordinated the allotment decision as desired by Ahmed Patel. Ahmed Patel is one of Sonia Gandhi's closest aides — he has been her political secretary since 2000, and she is known to rely on him greatly in the running of the Congress Party.^[73]

September 2012. Coalgate reaches Supreme Court of India[edit]

You may have well laid down policy but was it implemented? Is it a sheer coincidence that a large number of beneficiaries were either politicians or their relatives or associates?

Justice R M Lodha and Justice A R Dave, Supreme Court of India^[74]^[75]

Advocate M L Sharma filed a Public Interest Litigation (PIL) in the Supreme Court seeking to cancel the allotment of 194 coal blocks on grounds of arbitrariness, illegality, unconstitutionality and public interest. Defending the CAG, a Supreme Court bench of Justices R M Lodha and A R Dave dismissed the Solicitor General Rohinton Nariman's objections that petition relies heavily on the CAG report by saying, the CAG is a "constitutional authority" and that its report is "not a piece of trash".^[74]

Moreover, the court ordered the government to inform it of reasons for not following the 2004 policy of "competitive bidding" for coal block allocation. The apex court wanted to know not only the steps that have been taken but also proposed against companies that have breached the agreement. On March 13, 2013 Supreme Court bench responded to rare display of divergence between center and premier investigation agency CBI by asking its director not to share details of coal block scam investigations with political executives and report only to the court. It further ordered the CBI DIRECTOR to file an affidavit by April 26 stating that probe status report filed before it had been vetted by him and its contents were not shared with the political masters and "the same arrangement shall follow in future".^[75]^[76]

Two applications were filed by NGO Common Cause and Manohar Lal Sharma on 13 April 2013.Activist lawyer Prashant Bhushan, sought creation of a special investigation team to probe the case as it involved "very powerful personalities in the present government who were either in charge of the allocation process or who influenced the process to get allocation to their favoured entities"."There has been mounting evidence... for the last one year as to how major corporate groups like Jindals were able to garner huge blocks with millions of tonnes of coal, as was the case with shady companies linked with other politicians. Despite that CBI has neither filed any chargesheet nor made an arrest."the application said.. The Naveen Jindal Group had allegedly "misrepresented" facts and was shown favour by the Jharkhand Government which dropped other firms from its recommendation for allocation of coal blocks in the state in 2007, the CBI has said in its FIR filed before a court here in Coalgate.The FIR is categorical that Ministry of Power was against the proposal for allocating Amarkonda Murgadangal coal block to Jindal Group firms -- Jindal Steel and Power Ltd (JSPL) and Gagan Sponge Iron Pvt Ltd (GSIPL) -- which have been named as accused along with Congress MP Naveen Jindal. However, former Minister of State for Coal Dasari Narayan Rao, also an accused in the FIR, had written a note to the then Coal Secretary and showed "undue favour" to Jindal's firm which had misrepresented the facts regarding its "preparedness in setting up their proposed end used plant (EUP)"."Enquiry further revealed that Government of Jharkhand vide its letter dated June 20, 2007 recommended the allocation of Amarkonda Murgadangal coal block to three companies namely (1) M/s Lanco Infratech Ltd (40 per cent), (2) M/s JSPL (30 per cent) and (3) M/s GSIPL (30 per cent)."However vide its letter dated July 30, 2007, Government of Jharkhand changed its recommendation and recommended the allocation of Amarkonda Murgadangal block to only the two Naveen Jindal Group companies i.e. JSPL (70 per cent) and M/s GSIPL (30 per cent)," the CBI said in its 12th FIR filed till date in the coal blocks allocation scam before the Special CBI Court.The agency alleged that both SPL and GSIPL misrepresented the facts to the Coal Ministry but the Screening Committee, which used to recommend for allocation of coal blocks to the shortlisted applicant companies, in its meeting held on September 13, 2007, had recommended allocation of Amarkonda Murgadangal coal block jointly to these two firms."Enquiry further revealed that both M/s JSPL and M/s GSIPL misrepresented in its application/feed back form on the count of their preparedness in setting up their proposed EUP as well the previous allocation of coal blocks to their group companies," it said. The FIR further said, "Despite not being recommended by the Ministry of Power and the companies having misrepresented on the aforesaid counts, the Screening Committee in its meeting held on September 13, 2007 recommended the allocation of Amarkonda Murgadangal coal block jointly to M/s JSPL and M's GSIPL."The CBI said that Power Ministry had not recommended allocation of coal blocks either to JSPL or GSIPL as they did not "meet the criteria of preparation adopted by Central Electricity Authority which shortlisted the companies on behalf of Ministry of Power." Regarding Rao, the agency said that in order to influence the decision of the Screening Committee in favour of JSPL and GSIPL, the then Minister of State for Coal had written a note on July 27, 2007 to the Coal Secretary, who was also Chairman of the Screening Committee.Referring to the note, CBI said, "He (Rao) mentioned that he had come to know through the media reports that Ministry of Power/CEA had been appraising various applications received in the Ministry of Coal on the criteria of networth of applicant, progress regarding land acquisition and water tie up etc.""However, the Screening Committee should evaluate various applicants as per the past practicesIt said on a representation by another firm Bhushan Energy Ltd (BEL) seeking 50 per cent share in Amarkonda Murgadangal coal block, Rao "again showed undue favour" to Jindal's firms and justified the decision of Screening Committee recommending the allocation of coal blocks to the two companies.It said that JSPL had submitted its application for coal block allocation in January 2007 to the Coal Ministry for securing few blocks earmarked for power sector, including Amarkonda Murgadangal coal block in Jharkhand for its proposed 1000 MW captive power plant to be set up at Patratu.GSIPL also submitted its application dated January 10, 2007 to the ministry for its 1000 MW independent power plant in Dumka district in Jharkhand, the CBI said, adding that the allocation letter was issued to the two firms on January 17, 2008. Besides Jindal, Rao, JSPL and GSIPL, the accused named in the FIR, lodged under provisions of the IPC dealing with the offence of conspiracy to cheat and under the relevant sections of the Prevention of Corruption Act, are -- members of the 35th Screening Committee, Jindal Realty Pvt Ltd, New Delhi Exim Pvt Ltd, Sowbhagya Media Ltd, Directors of GSIPL and other unknown persons. ^[77]

2013[edit]

Role of Prime Minister Manmohan Singh[edit]

In 2004, coal secretary P C Parakh informed PM the potential fraud inherent in the discretionary allocation of the captive coal fields and objected to it in writing. Still all the 142 coal blocks were allocated without auction during the Prime Minister's tenure in the coal ministry.^[78] BJP on April 19 demanded the resignation of Prime Minister Manmohan Singh alleging that he was using the law ministry to save himself from the probe.^[2]^[79]^[80] The Supreme Court observations on April 30 are undoubtedly harsh. No other government in India has been criticized in such words. The legalities of the case have proved troublesome for Manmohan Singh and the UPA.^[81]P C Parakh who is considered the whistleblower for the coalgate said that he clearly pushed for auctions, but was overruled by the PM.^[82]^[83]

Parliamentary Standing Committee Report[edit]

Standing Committee on Coal and Steel tabled in Parliament on 23 April 2013 stated in its latest report that all coal blocks distributed between 1993 and 2008 were done in an unauthorized manner and allotment of all mines where production is yet to start should be cancelled. It recommended that all "personnel" who have been involved "directly or indirectly" in the allocation process "should be investigated for their role".There was no transparency in the allocation process and the exchequer did not get any revenue from allocation of the blocks. It has pointed out that the allocations between 1993 and 2004 were done without any advertisement or public information.^[12] It accused both the UPA and NDA for perpetrating massive corruption.^[13]

Supreme court hearing[edit]

On April 26 the CBI director Ranjit Sinha submitted an affidavit in the Supreme Court stating that the coal scam status report prepared by the investigating agency was shared with the law minister Ashwani Kumar "as desired by him", joint secretary-level officers from the Prime Minister's Office (PMO) and the coal ministry before presenting it to the court on March 8^[84] It contradicts the claim made by CBI counsel in SC that the coal scam scam report was not shared with any member of the government.^[85] On April 29, CBI stated to SC that 20% if its original report was changed by Government.^[86] Additional Solicitor-General Harin Raval resigned for having misled the Supreme Court.^[81]

Ranjit Sinha said SC that CBI is part of government and hence not autonomous.The three-judge Bench of Justices R.M. Lodha, Madan B. Lokur and Kurian Joseph directed the CBI to file an affidavit by May 6 regarding the changes that were made in the status report, at whose instance the changes were made, and the effect of these changes on the entire investigation. Counsel Prashant Bhushan said there were efforts to shield PM. He said "the Central Vigilance Commission can at least be asked to direct the CBI to show the final report. If the CVC feels there are a few things left out and if there are things not done then it can ask the CBI to change the Investigating officer. The reason why the CVC can interfere is because of this administrative control. The CBI Director who has statutory status can be pressurised by promising post retirement jobs etc. Thus government manage to control the CBI." Adv Prashant Bhushan said "companies are trying to operationalise and then they can say so much investment is being done. Every delay will lend them the contention of equity."

He requested court to appoint a retired judge and police officer of impeccable integrity to overlook the investigation.SC said that it will liberate CBI from political interference to make CBI credible, impartial and independent.^[87]

Missing files[edit]

Coal Allocation (I & II) sections are responsible for maintaining all records pertaining to allocation of coal blocks.The number of missing files was initially pegged at 157 – the number of applications for coal blocks allocation.Nearly 150 are related to the period between 1993 and 2004 in which 45 coal blocks were allocated. Missing files benefit three sets of people– the beneficiary companies (and individuals) who received coal block allocations; the screening committee (based on its deliberations) and the minister and his office (bureaucrats and officials).The BJP says that the bulk of the questionable allocations took place while PM Manmohan Singh held charge of the coal ministry. ^[88]

People in office during the allocations[edit]

TKA Nair, Former Principal Secy, PM and now Adviser to PM DC Garg (Chief, Western Coalfields Ltd) under CBI scanner^[89]

Ministers[edit]

Sriprakash Jaiswal (incumbent since 2012) Manmohan Singh (PM) (four months in 2004 and from 2007 to 2012)

UPA-I coal minister – Sibu Soren, May 2004 to 2007, except July 24 – November 27 2004 2003 – Ministry of coal separated from ministry of mines

Ministers of mines[edit]

Mamata Banerjee (January 2004 – May 2004) AITC Ram Vilas Paswan (September 2001 – April 2002) LJP Syed Shanawaz Hussain (2001 minister of coal) BJP Sunder Lal Patwa (2000-2001) BJP Naveen Patnaik (minister of mines – 1998 – 2000) BJD ^[90]

References[edit]

Constructs such as ibid., loc. cit. and idem are discouraged by Wikipedia's style guidefor footnotes, as they are easily broken. Please improve this article by replacing them withnamed references (quick guide), or an abbreviated title. (September 2012)

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"Colors Under The Coal" is a shot film which tells a story of a garbage collector boy from India struggling to earn his basic needs, in the same period when Coal allocation scam takes place. This film has been made by a student film maker Shreeram R. Upadhyay from India. The film is available on YouTube .

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Saturday, October 19, 2013

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Indian coal allocation scam

Contents

1972–2010. Background to Coalgate: history of coal allocations In India[edit]

The coal allocation process[edit]

Coal allocation guidelines[edit]

Results of the coal allocation program[edit]

March 2012. Coalgate explodes: the Draft CAG Report[edit]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

Second CAG charge: "windfall gains" to the allocatees were 1067303 crore (US$160 billion)[edit]

March–August 2012. Coalgate grows: the media, the BJP, and the CBI and Income Tax investigation[edit]

Allegations against S Jagathrakshakan[edit]

Allegations against Subodh Kant Sahai[edit]

Allegations against Ajay Sancheti and his link with Nitin Gadkari[edit]

Allegations against Vijay Darda and Rajendra Darda[edit]

Allegations against Premchand Gupta[edit]

Allegations against Naveen Jindal[edit]

BJP Response[edit]

CBI and Income Tax Investigation[edit]

Formation of Inter-Ministerial Group (IMG)[edit]

August 2012. Coalgate reaches Parliament: the Final Report and Manmohan Singh's rebuttal in Parliament[edit]

The CAG Final Report[edit]

Overview[edit]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

Second CAG charge: "windfall gains" to the allocatees were 185591 crore (US$28 billion)[edit]

Manmohan Singh's Rebuttal in Parliament[edit]

Overview[edit]

First CAG charge: the Government had the legal authority to auction coal blocks[edit]

Second CAG charge: "windfall gains" to the allocatees were 185591 crore (US$28 billion)[edit]

Role of Sonia Gandhi[edit]

September 2012. Coalgate reaches Supreme Court of India[edit]

2013[edit]

Role of Prime Minister Manmohan Singh[edit]

Parliamentary Standing Committee Report[edit]

Supreme court hearing[edit]

Missing files[edit]

People in office during the allocations[edit]

Ministers[edit]

Ministers of mines[edit]

See also[edit]

Other scams and corruption[edit]

Anti corruption efforts[edit]

References[edit]

External links[edit]

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