Why are the Corporate Players Missing in Coalgate Dispute?

Why These Private Companies are Accused?

The first reason, why these private companies got involved in the matter is that they acquired coal reserves at a fraction of their true market price. Secondly, it is believed that there was an apparent conspiracy between the screening committee members and coal allottees. And the third reason is that some of these companies deliberately delayed starting production and a few sold off their coal blocks to bigger entities with a profit, as in the 2G spectrum allocation scandal.

Assocham Criticizes CAG Report

While the debate over the coal allocations rages, the Assocham has criticized the CAG reports.  In an advertorial appeared in the Business Standard it said, “The CAG’s conclusions over the 57 coal blocks allotment appears to have been arrived at without taking all the facts into consideration. Only one of the 57 coal blocks has gone into production. Several of the blocks were allocated to power, steel and cement companies for captive use. If the blocks were auctioned, the cost of these blocks would have pushed up the sale price of power, steel and cement. These are the basic industries crucial to the entire economic value-chain”

The advertorial added that there could have been some mistake in the selection of beneficiaries “but to extrapolate the current price to the prospective coal output from these blocks and then arriving at a figure of over Rs 1.87 lakh crore as the loss to the government, does not seem to be correct application of accepted principles of economic value assessment.” “When the government encourage private sector investment and remove constraints to it, the CAG reports by way of erroneous conclusion have made any liberal reform a political risk. The economic situation is so grim that the Government cannot afford the luxury of risk-aversions in the wake of the CAG’s questionable conclusions,” it said.