Prime Minister Manmohan Singh

Prime Minister Manmohan Singh

New Delhi 22 March 2012: The Comptroller & Auditor General (CAG) has revealed a major scam on allotment of coal blocks without auction in a draft report. The Auditor General says that the government lost $210 billion in revenue as a result of this improper allotment. This mind boggling number dwarfs $39 billion of the 2G spectrum scandal.

Even in a country which is used to corruption news like the daily weather report, this time the government seems to broken the all-time record.
The government gave away 155 acres of coal mines to commercial entities without auction between 2004 and 2009. 17 billion tonnes of coal reserve in 73 blocks were distributed to private companies. Legislation for auction of coal blocks was introduced in 2006 but was not passed till 2010 for obvious reasons.

Every year the finance ministry has a difficult time finding sources of revenue to balance the budget without raising the taxes. Why didn’t they notice this source of revenue? Was it because it came under the Prime Minister or collusion??? There will be more light shed on this as a precedence has been created in the 2G case.

Prime Minister Manmohan Singh will have a hard time explaining the scandal as he held the coal portfolio himself at the time of the scam. He also has a task  to find a scapegoat soon.

Bhartiya Janata Party (BJP) has taken advantage of this news to recover its waning influence by blaming the Congress. But pointed out that alleged beneficiaries of the scandal include mining companies run by the states of Chhatisgarh, Jharkhand and Madhya Pradesh – all three are run by the BJP.

This is a blow to Gandhi-Nehru dynasty which is reeling from Rahul Gandhi’s poor performance in the recent state elections.

FT subsequently updated its blog with this paragraph:
The prime minister’s office responded to the allegations with a series of tweets on Thursday, including this one with a link to a statement containing an extract from a letter from the CAG saying the leak was exceedingly misleading and had caused it great embarrassment and very deep anguish.
CAG’s letter to the PM: