Thursday, July 21, 2011


If the 2GSpectrum Scam took you by surprise, what Chauthi Duniya is going to reveal, will sweep the ground under your feet; you are about to feel giddy as you keep reading. Chauthi Duniya is going to reveal the mother and father of all scams in the history of India. In the name of captive coal block allotment the country has been robbed of 26 lakh crores. And most stupendous fact is that it did not just happen under the Prime-ministership of Manmohan Singh, it happened in his very own ministry. This, ladies and gentlemen, is the Coal Scam. Coal is called black gold and black diamond but this natural national resource of India has been gifted away for free by this government to its favourite corporate houses and middlemen who are so dear to it. Let us see how the biggest ever loot of Indian history take place.

Indira Gandhi had in 1973 nationalized coal. This had ended the black marketeering of coal and coal had become available at government notified rates all over the country. But Manmohan Singh has opened the coal coffers to private players thus harming the cause espoused above.

It was a minister who did the 2G scam. The PM was not even aware of it. Adarsh and Commonwealth loot too were others’ mire. But who will now take the fall for the Mega Scam in Coal while he was the Coal Minister? The public would surely want to know this from him.

This scam is registered in government files themselves and the figures therein are shouting from the rooftops that the swindlers have had the biggest day yet. This is the tale of 2006-2007 when Shibu Soren was in jail and the Prime Minister Manmohan Singh was holding the coal ministry. In this period Dasi Narayan and Santosh Bagdodiya were ministers of state for coal. It was under the Prime minister that the coal ministry gave out the maximum number of captive coal blocks free of cost. The most glaring and blatant fact is that the coal mines were given out free at the lower than nominal cost of Rs. 100 royalty per ton of coal that would be extracted. It was done at a time when the market price of coal was over Rs. 2000 per ton. When this issue was brought to the notice of the Parliament, the government ignominiously declared that it would not allocate coal blocks further without amending the Mines and Minerals Act, 1957, which would bring in the clauses pertaining to open bidding process. Also again when the Bill was moved in the Rajya Sabha it was agreed that no further allocation of coal blocks would be undertaken unless both the houses passed the Bill into an Act. Though it was passed in the Rajya Sabha, it was deliberately stalled in the Lok Sabha for four years, and it could become an Act only in 2010. In the meanwhile the government in the most sinister manner, breached its promise to the Parliament and the allocation of free coal blocks continued surreptitiously. Actually, there was a deep conspiracy behind this ploy to keep the Bill pending in the Lok Sabha. The amendment to the Bill unambiguously envisaged that from the date of its passage, allocation of mines or minerals would be brought under the umbrella ambit of a fair open bidding process. Thus, had the Bill not been kept hanging in a lurch, the government would not have been able to propitiate its favourite private companies. Thus, in this period coal blocks to the tune of proven reserves of 21.69 billion tons was given away free to private companies and also middlemen.

The Prime minister Manmohan Singh was the coal minister during this period and all this bungling and embezzlement happened under his very nose, maximum number of blocks were squandered under him only. Manmohan Singh gave away 63 blocks for free. But why did he do so? During these four years (2006-2010) almost 175 blocks were gifted to brokers and capitalists of different shades.

Actually apparently, the magnitude and the seriousness of the matter and scam do not catch the eye so Chauthi Duniya decided to estimate the monetary loss inflicted upon the exchequer because of this government largesse. What came out was numbing. Actually the act of giving captive coal blocks to private companies started in 1993. The pretext of this was that the private players, in search of profit, could be lured into investing in such blocks which for the government would prove both difficult and cost ineffective to mine. This would invariably take coal production to newer heights while fuelling the economy. From 1993 to 2010 208 blocks of coal were alloctaed for free. This tantamounts to coal reserves of 49.07 billion tons. Out of the 208 blocks 113 blocks were given to 184 private companies for free. This amounted to coal reserves equal to 21.69 billion tons. If the value of this coal is calculated at the market price of Rs. 2500 per ton, it comes out to 5,382,830.50 Crores. If out of this Rs. 2500, Rs. 1250 is deduced giving space for rRs. 850 as cost of production, transportation etc and Rs. 400 is deduced as profit, then also the country was inflicted a revenue loss of about 26 Lakh Crores. So this is the ‘Father and Mother of all Scams’. This is surely India’s biggest and scariest scam ever as also perhaps, the biggest ever in any country in the world.

During investigations Chauthi Duniya laid its hands upon a few documents that are astonishing. These documents reveal that even the CAG is aware of this scam. Question is why is the CAG silent till now?

The UPA government squandered the mineral resources of the nation to which all 120 Crore citizens have an equal right. The breath-bating sum of 26 Lakh Crores could have been used for the multitude of deprived and marginalized of this country.

The UPA government, since the day it has assumed power, has put out an all out specious policy faux pas. Apparently, it has been emphasizing that to propel India’s growth, it must be made self sufficient in energy resources. But the picture that has emerged is that the same government has gifted scarce natural reserves of the country to private companies and industrialists for free. This common national capital should have accrued to all the citizens but the government circumvented procedures and resorted to subterfuge in order to rob the Indian exchequer of 26 Lakh Crores. The Parliament was first kept in dark and when it did come to light the auspicious body was defrauded into believing that the government wanted to amend the relevant laws to include the process of open bidding. Actually the Parliament was taken for a ride for four years and in the intervening period the government, in sinister collusion with its crony industrialists settled all the dark deals. Looking at the amount robbed (26 Lakh Crores) it is pretty obvious how much money would have changed hands.

But the irregularities do not end here. Yet another startling fact has come to light. There are certain guidelines regulating the allocation of coal blocks which were again either circumvented or turned a blind eye to. There are certain conditions which cannot be violated in any case while allocating the coal blocks. A condition is that in case of underground mines production should mandatorily start within 36 months (a grace period of 6 months is allowed if the mine falls under forested area). If the mine is of the open cast type, this mandatory period of starting production is 48 months (and another 6 months is allowed if the mine falls under forested area). If production does not commence within this stipulated period, the license stands null and void. This clause has been added in order to keep out middlemen and brokers who themselves do not need coal but wait for the right industrialist to come and then sell the mine to the latter at exorbitant prices. But interestingly, the government has not cancelled any license under this clause even when the statistics of production are dismal. This is because the government had given away many a mine for this very purpose, that middlemen may make profit. If the government was and is not in collusion with the black marketers and middlemen, why at all, in the first place middlemen were allotted blocks and secondly, why at all no cancellation of licenses have occurred even when production period has been overshot? Latter is the job of Sri Prakash Jaiswal who made no amends whatsoever. Till 2003 40 blocks had been allocated. Out of this only 24 have started production. So why have the licenses of the rest of the 16 companies not cancelled? In 2004 4 blocks were allotted and none has started production. Similarly, in 2005 22 blcoks were allotted and only 2 have started production. In 2006 52, 2007 51, 2008 22, 2009 16 and in 2010 0ne block was allotted. But the report till 18th January says that none have started production. So first the government allots coal blocks to private interests. Then keep the Mines and Minerals Act pending in the Parliament, while the embezzlement keeps going on, then when mines allocated to middlemen does not start production (they were not meant to start production at all) then nobody cancels their licenses. Now none needs to be a rocket scientist to see behind the official maze and fathom what went on between the government and middlemen. Had there been no covert collusion and nexus, only 26 out of 208 mines would not be producing.

This UPA government has been ultimately specious in its dealings with the nation. First it gives the slogan of development and energy security and on the other hand squanders away one of the most important inputs of growth-coal. It gives it away for free, as gift, to its favourite capitalists and brokers. It is not so that the government did this under some unavoidable circumstances. It is indefensible. Mining Development Corporation of Maharashtra also got some free coal blocks from Coal India. These were Agarjhari, Varora, Marki, Jamni, Adakuli, and Gare palma etc. later the corporation sold these blocks to private companies thus earning a profit of 750 Crores for the state coffers. This too was a way in which the government could have gone about in the case of coal blocks but as it stands they were gifted free. It is not so that the presence of middlemen in this process is a matter of conjecture; actually a company in Maharashtra which has nothing to do with coal was allotted a free coal block which it sold for Rs. 500 Crores. Pure and simple profit without investing a penny. So the coal blocks were turned into Dalal Street wherein coal was bought and sold like shares with no accruing benefits to the people of India.

Pranab Mukjherjee declared that he was going to present a budget for the common man. But what came out of his red briefcase was a mockery of common man. Having a look at that demeaning budget it comes to light that social sector was given 1.6 lakh crores. Infrastructure got 2.14 lakh crores. Defence was given 1.64 lakh crores. The fiscal deficit of India stands at 4.12 lakh crores. Tax revenue of India is 9.32 lakh crores. The total expenditure for the year 2011-12 is 12 lakh 57 thousand and 729 crores. And this single scam is worth 26 lakh crores. It means that middlemen,blackmarketeers, industrialists and capitalists were given almost twice the amount that was allocated for whole of India for the year 2011-12. It means that three years’ tax on Indian peoples earnings was gulped up by this single scam. This means that Indian defence forces would have been supplied for by this amount for the next 25 years. This means that India’s infrastructure blues could have been fixed for ever in just a single year with the amount involved in this single scam. And India, in this period of slow recovery from global recession, could have paid off all its debts, domestic and international in just one go. Black money stashed in foreign banks has been a headache for the people of this country, but what about this money, who will bring this back in mainstream economy if India.


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