Thursday, March 22, 2012

The Coal Mining Scam in India

After 2G Scam of 2011, the fresh allegation for allocating valuable coal block to hundreds of private miners without auction has hit the UPA govt. even harder. As per leaked CAG report, the government of India has lost up to $210 billion or Rs.10.67 Lakh Crores in revenue by selling coal deposits too cheaply.

Opposition parties reacted with outrage in parliament on Thursday 22nd March 2012 to the report, which was leaked to a newspaper. The session was adjourned and the government said it would respond once it had verified the facts. BJP has demanded a CBI probe into the allotment of coal blocks and monitoring of the probe by a court.

According to the CAG draft report, the government extended undue benefits totalling a Rs 10.67 lakh crore to commercial entities by giving them 155 coal acreages without auction between 2004 and 2009.

The Coal scam if proved will the mother of all scams in India, which would tarnish the image of the country severely. Jindal Steel and Power is one of the company which has benefited significantly from the above coal mines allocation and hence has taken a significant knock since the news broke out.

In 2006, the government introduced the Bill for auction of coal blocks.But the government did not pass the Bill till 2010. 17 billion tonnes of coal reserve in 73 blocks were distributed to private companies.

A similar investigation over the allocation of telecom licences led to huge protests that rocked Singh's government last year and landed former telecom minister A Raja and several company executives in jail. In the telecom scandal, officials are accused of taking bribes to favour certain companies.

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