Some months ago, when the first draft of the Comptroller and Auditor
General's (CAG) report on allocation of coal blocks came into the public
domain, the Coal Minister Mr.Sriprakash Jaiswal tried to dismiss the
auditor's findings as "notional and imaginary".

As is his wont, the Prime Minister Mr.Manmohan Singh ducked the bouncers for
some time but eventually spoke up. He too was dismissive of the CAG's
findings as "uninformed allegations". However, now that the CAG Report has
been tabled in parliament, the "uninformed allegations" have become informed
opinion of a constitutional authority and the government is running for

The CAG's findings on allocation of coal blocks constitutes the most damning
indictment of a government. The auditor says the government adopted a
non-transparent allotment process that resulted in undue gains amounting to
Rs 1.86 lakh crore to private parties. This conclusion of the CAG makes
Coalgate the biggest scam in India's history, but what does the man who
presides over the government have to say? He says silence is better than a
thousand replies! He is wrong, because of three reasons: India is a
democracy and you have to explain your conduct, however high you may be; as
head of government, Mr.Singh must take responsibility and explain why his
government did what it did; and finally, the Coal Ministry was under his
direct charge for some of the years when this non-transparent approach was
adopted to give away a valuable natural resource resource to private
companies without competitive bidding.

Following the leak of the draft report earlier this year, Team Anna demanded
an independent probe into the sale of these coal blocks.

Since the Department of Coal was under the direct charge of the Prime
Minister for three years between 2006-09, Anna & Co accused Mr.Manmohan
Singh of having abused his position to help private parties. Thus, the draft
report of the CAG had for the first time resulted in corruption charges
being hurled at the Prime Minister. The carefully cultivated "Mr.Clean"
image of Mr.Singh was being seriously challenged for the first time.

When the report was tabled last week, Finance Minister P.Chidambaram offered
the first official reaction from the government. He said the "presumptive
loss" in the CAG Report was flawed. "If coal is not mined, if it remains
buried in mother earth, where is the loss. The loss can arise only once the
coal is taken out of mother earth, mined and sold at unacceptable price or
value. But if the coal is not mined, where is the loss," he said. Does this
not amount to saying there is no loss to the public exchequer? However, when
his "zero loss" theory became a matter of public ridicule, he claimed that
his statement of the previous day did not amount to saying that there was
zero loss.

He, as is his wont, blamed the media for distorting his statement.

The Prime Minister too is trying to obfuscate the facts. The CAG has faulted
the government for not taking the competitive bidding route.
The sequence of events is as follows: The Secretary (Coal) recommended
competitive bidding in June, 2004 and even warned that if this was not done,
private parties would make "windfall gains". Further, the Law Ministry
opined in 2006 that the government should introduce competitive bidding. But
the government continued the ad-hoc process until 2012. The Prime Minister
concedes the point and says the Department of Legal Affairs did say in
August, 2006 that competitive bidding "could be introduced through
administrative instructions". But the government never introduced a
transparent bidding process. After conducting itself in a manner detrimental
to public interest, the government now accuses the CAG of selectively
reading the documents, implying thereby that this constitutional authority
has some axe to grind. The Prime Minister  claims that the CAG's conclusions
are "disputable".  This is unacceptable.  Even more laughable is his implied
claim that he ought to be complimented for trying (from 2004 to 2012) to
bring in a legislative amendment to enable competitive bidding. Instead,
there is "adverse audit scrutiny", he says.

The report's Executive Summary contains one paragraph which constitutes a
damning indictment of the selection process. It exposes the complete lack of
transparency in the allocation of coal blocks to private parties. The CAG
says the Screening Committee recommended the allocation of a coal block to a
particular allottee out of all the applicants for that coal block, as per
the minutes of the committee's meeting. "However, there was nothing on
record in the said minutes or in other documents on any comparative
evaluation of the applicants for a coal block which was relied upon by the
Screening Committee. Minutes of the Screening Committee did not indicate how
each one of the applicants for a particular coal block was evaluated. Thus,
a transparent method for allocation of coal blocks was not followed by the
Screening Committee". This is indeed shocking, because a comparative
analysis of the merits and demerits of every candidate is done and make part
of the record even in the appointment of peons in government. But, the
government has nothing on record to show why it chose a particular party for
a coal block in preference to other applicants. There is only deafening
silence from the government on this conclusion of the CAG. Needless to say
that both the Prime Minister and the Finance Minister have no explanation to
offer for such gross misuse of governmental authority while allocating a
precious natural resource.

We get another peek into the "efficiency" of this government  when the
report talks about the system of bank guarantees introduced by the Coal
Ministry to ensure timely production from the coal blocks. The ministry
de-allocated 24 blocks up to June, 2011 for lack of progress.

The Monitoring Committee also recommended deduction of Bank Guarantee given
by 15 allottees for delay in development of coal blocks.

However, the ministry "could not" encash the bank guarantees "as the
modalities for such encashment were still to be worked out". As of November,
2011, lapsed bank guarantees amounted to Rs 312 crore. Is it not strange
that some private parties are first favoured with coal blocks in the most
non-transparent system of allocations. Thereafter, when they default, the
government seems to baulk at the idea of encashing their bank guarantees.
Why? Here again the government has no explanation to offer as to why it
treated the defaulters with kid gloves and why it did not encash bank

The Prime Minister's response is full of contradictions. He offers a
detailed response to the CAG's findings in his statement which runs to
32 paragraphs. Yet, he makes this lofty declaration:  "Hazaron jawabon se
achchi hai khamoshi meri.....". If silence is better than response to a
thousand questions, why did you offer such a detailed response?

Secondly, Mr.Singh, the choice of the Shair is totally inappropriate in the
Indian context. The Prime Minister of the largest democracy in the world
cannot and does not have the luxury of not responding to questions. This is
a Shair that is fit for some one like Kim Jong-un, the Stalinist dictator of
North Korea! As they say, if you cannot take the heat, you must get out of
the kitchen.