India’s constitutional body, the Comptroller and Auditor General (CAG), which has given the Unite Progressive Alliance (UPA) ruling coalition many headaches over the past three years, struck again today when it released three reports claiming the government lost tens of billions of dollars on contracts awarded to the coal, power, and aviation industries.
The CAG reports gave much-needed fodder to the Bharatiya Janata Party (BJP)-led opposition which wasted no time in demanding Prime Minister Manmohan Singh’s resignation.
BJP leader Sushma Swaraj said, "PM Singh is directly responsible." Coal Minister Sri Prakash Jaiswal staunchly defended the government’s process of allotting coal blocks to private firms by stating, "There couldn't have been a more transparent means of allocation. We followed an extremely transparent method.”Enjoying this article? Click here to subscribe for full access. Just $5 a month.
The CAG report on coal is the most damning of all the three reports. It says that the government followed an opaque and subjective method of allocating 100 private companies contracts for the development of 57 coal fields between the years of 2005 to 2009. The CAG report stated that these contracts should have followed a competitive bidding process but did not.
This verdict is particularly damning for Prime Minister Manmohan Singh who headed the coal ministry for much of the time in question. The CAG report specifically singles out the PM for allegedly allocating 44 billion tons of coal at throwaway prices in his capacity as the coal minister.
The CAG report on Power accused the government of favoritism and changing binding norms for the allotment of power projects in order to give the contract to favorite private firms like Tata Power and Reliance Power, which were allowed to acquire more land than required for the power projects. The CAG report on aviation lambasted the levy of a development fee on passengers at Delhi Airport which would give the private company, Delhi International Airport Limited (DIAL), an undue benefit of Rs 3,415 crore.