New Delhi:
The Prime Minister has reportedly told his ministers that he will not sanction the cancellation of 142 coal blocks listed by the national auditor for being sold at a fraction of their true market rate to private and state-run firms.
"The demand for cancellation of all 142 coal blocks allocated after 2004 is not founded on sound logic...It (cancellation) cannot be done through diktat or arbitrary orders," Finance Minister P Chidambaram said today. "There is a procedure for it and that procedure is underway," he added. Government sources say that a blanket cancellation would be interpreted as an admission of guilt; it would also end up in lawsuits by the affected firms. The government is also studying a proposal now to set up an independent authority to regulate and monitor the coal sector.
The auditor (CAG) says between 2004 and 2009, firms racked up gains of upto Rs. 1.86 lakh crores because the government did not use an auction to assign coal fields. The CAG report has been rejected by the government and seized by the opposition to demand the PM's resignation.
"I hope the Opposition will see sense. We are a parliamentary democracy. We have been elected by the people of India for a five-year term...I sincerely hope that the BJP will respect the verdict of the people and let the Government function... the majority has a right to rule," tweeted the Prime Minister's Office this evening, rejecting the BJP's demand for his resignation, as well as its strategy of disrupting Parliament till the PM succumbs. Late last week, the glimmer of a compromise appeared - senior BJP leaders said they would agree to a discussion in Parliament if the coal licences given to companies during 2004 and 2009 were cancelled, and a judicial inquiry dissects how companies were picked for coal fields.
The Congress also wants to counter the BJP through public campaigns. So after this Parliament session ends, senior Congress leaders will travel to different states to explain their point of view and attack the CAG report and BJP.
Simultaneously, the Prime Minister's Office has urged the Coal Ministry to cancel the licenses of firms who have been non-starters in mining. By de-allocating licenses for under-performance, the government hopes to prove that it is determined to correct any loopholes in its coal policy. But it is keen to signal that any problem areas lie in under-performance by private and state-run firms, and not in the way that these assignees were selected, because that could be incriminating of its own actions.
A committee that has representatives from different ministries has begun reviewing the licenses of 58 companies who were sent showcause notices in April for unsatisfactory progress. Among them are seven coal blocks assigned by the BJP-led NDA. The firms' replies have been studied by the inter-ministerial group, which is likely to recommend that their licenses be revoked. The companies will be asked to defend themselves between the 6th and 8th of this month. Bank guarantees will be used by the government as compensation if the firms have not achieved the required development. The committee has been asked to present its findings to the Coal Ministry by September 10.