Coal auction earnings less than 3% of what PM Modi claimed; report
PM Modi’s claim that coal auctions earned ₹2,00,000 crore because of his corruption free policies have been exposed by a media report which shows coal auctions have got less than 3% of what he claimed
A year after the Narendra Modi government came to power, in March 2015, it boasted that revenue amounting to ₹3.35 trillion would flow to states through coal mines e-auctions and allotments. But almost 3.5 years later, the government has collected only ₹56.84 billion for the period of February 2016-July 2018.
A report in Business Standard has suggested how the Modi government exaggerated its revenue estimates, and endorsed the controversial theory of former Comptroller and Auditor General (CAG) Vinod Rai—who had accused UPA government of allocating captive blocks to private players without following norms, that had allegedly led to a notional loss of ₹1.86 lakh crore to the public exchequer.
“The total proceeds of ₹56.84 billion for the period of February 2016-July 2018 collected by the government, are from the auction of 31 and allotment of 58 coal blocks. This revenue is in addition to royalties that the states have always collected from coal mining,” the report stated.
“Revealed: In 2015, PM Narendra Modi said coal auctions have got ₹2,00,000 crore because of his corruption free policies. Reality: Three and a half years later it turns out coal auctions have got a mere ₹5,684 crore. Less than 3% of what he claimed,” said Nitin, sharing his report on Twitter.
Political leaders were quick to call the Prime Minister’s claims another ‘jumla’.
In fact through a press release, the government had claimed that "India has hit a gold mine with the recently concluded auction of 29 coal mines in two phases. The public exchequer continues to swell on revenue from coal block auctions. The total proceeds from the coal mines auctions have crossed ₹1.93 trillion surpassing CAG's estimate of ₹1.86 trillion losses on account of allocation of 206 captive coal blocks without auction since 1993."
The government had anticipated that a revenue of ₹3.35 trillion would likely flow to the states through coal mines e-auctions and allotments. By then, 67 coal mines had been auctioned and allotted.
"Fetching of over ₹2 trillion from auction of just 33 coal blocks has shown that policy-driven governance can rid the system of corruption," Prime Minister Narendra Modi was quoted as saying in the same press release, adding that these revenues would flow over a 30-year period while mining takes place.
Following an uproar over the CAG report, the Supreme Court had cancelled the allocation of 204 coal blocks made to the public and private sector in August 2014, that left the industry staring at an impending fuel crisis. Eventually, the NDA government brought the Coal Mines (Special Provisions) Act 2015 to handle the reallocation of cancelled coal blocks.
“Under this law, through auctions carried out since February 2015, the Union government offered 65 mines to companies for captive use. Some of these mines were put on the auction block repeatedly as auctions failed. Of the 31 coal blocks that finally got auctioned, six stand cancelled for failing to deliver against set deadlines,” the report said, adding, “Through the allocation route, the government has by now allotted 58 coal blocks to public sector companies.”
It also referred to a report of the Parliamentary standing committee in August 2018, which had also pointed out that the production from these captive mines had not taken off as promised.