Mining a solution

The biggest casualty of the Comptroller and Auditor General's latest set of reports, especially the more politically damaging coal allocation audit, could be the embattled UPA government's resolve to take day-to-day decisions.

With its back to the wall, there is a clear possibility of the Centre falling back on the only defence mechanism it knows when faced with such situations — to just sit tight in a corner and let all work grind to a halt. As a result, policy implementation could hit a brick wall and few, if any, decisions are likely to be taken in the coming months, as was witnessed in the immediate aftermath of the tabling of the CAG's 2G spectrum report. While the allocation of coal mine blocks without auction is now a done deal, a complete roll-back of the decision might only serve to aggravate the already serious coal crunch facing key core sectors such as power, considering that generation capacity of close to 40,000 MW is in various stages of commissioning based on government-allotted coal blocks and linkages. Even as a crackdown on those squatting on these resources is definitely warranted, it is equally important to salvage the situation and move forward on the allocations made to the serious players, at least in the power sector.

Unlike the telecom spectrum scam, where the first-come-first-serve policy was deliberately tweaked to suit some players, in case of coal block allocations, no changes were made to the extant policy of allocating coal blocks through an inter-ministerial screening committee. The biggest flaw of this policy, though, was to offer blocks to a bevy of merchant project developers, who ultimately planned to sell the electricity generated from these plants at the highest possible rates. The other question mark is over the large number of first-time power and steel sector entrants who managed to corner some of the blocks on offer.

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