In 2014, the Supreme Court called it arbitrary and illegal.
CAG found it caused a loss of 1.86 lakh crore to the exchequer.
The opposition parties called it loot and plunder and demanded then Prime Minister Manmohan Singh’s resignation.
Media dubbed it “Coalgate” and then opposition party BJP used it to the hilt in election campaigns.
But it’s back. BJP, now the ruling party, has brought a new version of the much-criticised arbitrary and discretionary allocation of coal mines.
Documents reveal the Union government has quietly changed the coal auction rules, making it easier for companies to grab coal blocks even when they are the lone bidders at the auction.
The Modi government has given itself the discretionary powers to allot coal blocks when just one bidder turns up for auction—a euphemism for failed auctions.
Twelve private companies have benefited so far, including the Adani Group.
The rules have undermined the landmark 2014 Supreme Court order that annulled 204 such allocations by the previous UPA government. It also contradicts the assertive claims of transparency made by the Narendra Modi government when it came to power in 2014, which amid much hype, introduced new laws and regulations to auction coal blocks.
Seven years later the promise of ending discretionary allocation and replacing it with fair competition are tossed aside when auctions fail.
The then Congress-led government’s defence of discretionary allotment was that the country needed more coal back then and earning revenue from it was not a goal.
But the Modi government’s fire sale of coal mines comes despite the country not needing additional coal supply now, and having allocated enough coal blocks to take care of the country’s power requirements for the next decade.
With this allocation route, the country comes full circle back to the original problem that the Supreme Court and subsequent laws tried to solve: ensuring better price discovery.
Does the new loophole in coal allocations make it easier for companies to collude and undermine auctions? Did the government throw away cheap public resources?
Read part two of the investigative series by Shreegireesh Jalihal.