Coal row: Govt says no trust vote, Oppn mounts pressure

Updated on Aug 27, 2012 09:44 PM IST

The government today ruled out bringing a trust vote in the wake of parliamentary deadlock over CAG report on coal blocks allocation but a relentless BJP alleged that the Congress had made "mota maal" (big money). Read: PM's 32-point statement | Poll: Should BJP now allow Parliament to function? | PM's statement is a list of excuses: BJP

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Agencies | By, New Delhi

Government on Monday ruled out bringing a trust vote in the wake of parliamentary deadlock over CAG report on coal block allocation and asserted that if the Opposition brings a no confidence motion, it will be defeated.

"There is no such plan," parliamentary affairs Minister Pawan Kumar Bansal said when asked if government's plans to bring a vote of confidence.

"Why should we bring it. If the Opposition wants to bring a no confidence motion. It will be defeated," he said.

Bansal also scoffed at suggestions that Parliament's monsoon session will be adjourned sine die due to the persisting deadlock much before September 7, when it is due to end.

The minister also said Lok Sabha would take up a discussion on the statement of the Prime Minister on the CAG report under Rule 193 which does not entail voting.

It has been learnt that RJD's Lalu Prasad, SP's Shailendra Kumar, CPM's Ramchandra Dome and BJD's B Mahtab have given notices in this regard.

The last time a confidence vote was brought was in July, 2008 when the Left had withdrawn support to UPA over the issue of Indo-US nuclear deal.

While government has no hopes of an end to the deadlock before the conclusion of the session, Bansal said there were no plans to suspend opposition members to ensure smooth conduct of business in both Houses.

Attacking the BJP, he said the opposition party has shown no inclination to participate in Parliament functioning.

Hitting back at the BJP for targetting the Prime Minister over the coal scam, the government on Monday said that the opposition stalling Parliament is a black spot for democracy and slap on the face of people who elect their representatives.

Speaking to the media, finance minister P Chidambaram said that Prime Minister Manmohan Singh has offered to debate the coal allocation and the Bharatiya Janata Party (BJP) should accept it.

"Every day that passes without Parliament meeting and transacting business is a day that adds a black spot for democracy. Not discussing in Parliament is a slap on the face of people who elect us," said Chidambaram.

He said that the place to continue the debate on coal allocation is not outside the Parliament but inside the Parliament.

"We are always ready for debate on coal allocation. If the opposition finds fault in the Prime Minister's statement, please do so, but in the Parliament," he said, during a media briefing (GoM Media) attended by human resource development minister Kapil Sibal and information and broadcasting minister Ambika Soni.

Chidambaram turned down BJP's demand for government to seek vote of confidence.

"There is no reason for the government to seek vote of confidence. The government enjoys the confidence of the Parliament," he said.

He refuted BJP's allegation that the Congress had made a lot of money - "mota maal" - in its coal blocks allocation, and said phrases like this should be avoided.

Earlier, Congress spokesperson Manish Tewari, addressing newspersons, said the United Progressive Alliance was ready for a debate in Parliament.

Whether there should be voting on the debate would be decided by the business advisory committees of the two houses, he added.

He said a debate on coal blocks allocation in Parliament would "expose" the Bharatiya Janata Party (BJP) and leave it with a "blackened face".

Prime Minister Manmohan Singh on Monday attacked the CAG report on coal blocks allocation and said that the allegations of impropriety hurled against him were baseless, but a relentless BJP alleged that the Congress had made "mota maal" (big money) from the allocation, pointing out that 142 coal blocks were given away in just four years (2006-10) compared to 70 over a 12-year period (1993-2005).

But a combative Bharatiya Janata Party (BJP) insisted that the Prime Minister should take moral responsibility for the presumptive Rs. 1.86 lakh crore ($37 billion) loss and resign.

With Parliament paralysed for a week, Manmohan Singh sought to defend himself and his government in both houses of Parliament, but the BJP again shouted him down. He then laid a statement on the table.

"I want to assure the members that as the minister in charge, I take full responsibility for the decisions. I wish to say that any allegations of impropriety are without basis and unsupported by facts," he said.

"The facts ... show that the Comptroller and Auditor General's (CAG) findings are flawed on multiple counts. The premise of the CAG is flawed. The observations of the CAG are clearly disputable," he added.

Later, speaking to the media outside Parliament, Manmohan Singh said Parliament was not being allowed to function "and BJP is determined to disrupt normal functioning of Parliament".

"We have a strong and credible case. They (CAG) will be challenged when the matter comes before the PAC (Public Accounts Committee)," he said.

The BJP was unrelenting.

Alleging kickbacks in the allocation of 142 coal blocks, BJP's Sushma Swaraj told the media: "We want him to accept moral responsibility. The PM is responsible for the revenue loss. That is why we want him to go."

She said all the coal blocks allocated without auction to private and state-run firms should be cancelled and these should be auctioned afresh.

She alleged that the Congress had made "mota maal" (big money) from the allocation, pointing out that 142 coal blocks were given away in just four years (2006-10) compared to 70 over a 12-year period (1993-2005).

BJP's Arun Jaitley asked the government to cancel all 142 coal blocks that were given away mainly to private parties and auction them afresh.

"Only then will the truth or otherwise of the PM's statement be known. In the 2G case, history vindicated CAG," he said of the second generation spectrum scandal.

"The rationale for cancellation is that nobody should be allowed to enjoy the fruits of a corrupt allotment at the cost of public exchequer."

Although the BJP's insistence that the Prime Minister should resign does not have the backing of the entire opposition, his comments Monday seemed to unify the opposition parties.

The Communist Party of India-Marxist (CPI-M) also asked the government to axe all allocations found faulty by the CAG and auction them.

The Congress and its allies again asked the BJP to give up its stand and let Parliament function.

Law minister Salman Khurshid said the BJP was unreasonable in demanding the Prime Minister's resignation.

CPI-M leader Sitaram Yechury refuted Manmohan Singh's claim that states like West Bengal wanted the coal blocks to be allotted and not auctioned.

He said West Bengal, ruled by the Left until last year, had never opposed auction of coal blocks but only insisted that the state's interests should not be bartered away.

Communist leader Gurudas Dasgupta called the Prime Minister's statement "lame duck" and faulted the Prime Minister for attacking the CAG.

But he clarified that he did not want Manmohan Singh to go, as this would lead to mid-term polls. He also attacked the BJP for stalling Parliament.

With the BJP not ready for a compromise and the Congress taking an aggressive stand, Parliament is expected to remain crippled well until the monsoon session ends Sep 7.

The BJP denied it was isolated on the issue.

"But if we have to fight it out alone, we will be do it. It would be a majestic isolation because popular opinion would always be with us," said Jaitley.

Making a statement in both Houses of Parliament amid uproar created by BJP members, Singh refused to be on the back foot, declaring that he takes "full responsibility" for the decisions taken as he contended that CAG's "observations" are "clearly disputable".

With BJP creating disruptions, he read out a few portions of his four-page statement before laying it in Lok Sabha and Rajya Sabha which were repeatedly adjourned because of uproar.

Conscious that the CAG reports are normally discussed in detail in the Public Accounts Committee of Parliament where the ministry concerned responds, Singh said he was departing from this established procedure "because of the nature of the allegations that are being made and because I was holding the charge of coal minister for a part of the time covered by the report."

Responding point-by-point to the CAG's observations, the Prime Minister said even if the government auditor's contention that benefits accrued to private companies were accepted, "their computations can be questioned on a number of technical points."

He asserted that aggregating the "purported gains" to private parties "merely on the basis of the average production costs and sale price of CIL (Coal India Limited) could be highly misleading."

As coal blocks were allocated to private companies only for captive purposes for specified end-uses, he said, it would not be appropriate to link the allocated blocks to the price of coal set by CIL.

The Prime Minister, whose resignation is being sought by the BJP, asserted that "any allegation of impropriety is without any basis and unsupported by facts".

Seeking to corner the Opposition over the issue, he said the policy of allocating coal blocks without competitive bidding existed since 1993 and previous governments also allocated "precisely in the manner that the CAG has criticised".

He also said major coal and ignite bearing states like West Bengal, Chhattisgarh, Jharkhand, Orissa and Rajasthan "ruled by Opposition parties" were "strongly opposed" to a switch over to competitive bidding process.

On the charge of delay in bringing the Coal Mines Nationalisation (Amendment) Bill, 2000 to facilitate commercial mining by private companies, Singh said it was pending in Parliament for a long time owing to "stiff opposition from the stakeholders" and government wanted broader consultations and consensus.

Singh said these state governments felt that a switch over would increase the cost of coal, adversely impact value addition and development of industries in their areas and dilute their prerogative in the selection of leases.

Citing instances, he said the then BJP chief minister of Rajasthan Vasundhara Raje had written to him in April 2005 opposing competitive bidding.

The Prime Minister quoted Raje as saying then that the competitive bidding was against the spirit of the Sarkaria Commission recommendations.

Singh also named another BJP chief minister Raman Singh (Chhattisgarh) saying that the latter had written to him in June 2005 seeking continuation of the extant policy of coal block allocation.

He said the Chhattisgarh chief minister had requested that any change in coal policy be made after arriving at a consensus between the central government and the states.

"The state governments of West Bengal (Left) and Orissa (BJD-led) also wrote formally opposing a change to the system of competitive bidding," Singh said.

The Prime Minister termed as "flawed" the premise of the CAG that the competitive bidding could have been introduced in 2006 by amending the existing administrative instructions and said it is "based on a selective reading" of opinions given by the Department of Legal Affairs.

Claiming that initially, the government had initiated a proposal to introduce competitive bidding by formulating appropriate rules, he said representatives of coal and ignite bearing states voiced their opposition to the proposed switch over in a meeting convened by the PMO on July 25, 2005.

Referring to that meeting, Singh said, " was further noted that legislative changes that would be required for the proposed change would require considerable time and the process of allocation of coal blocks for captive mining could not be kept in abeyance for so long given the pressing demand for coal."

The Prime Minister said it was, therefore, decided in the meeting to "continue with the allocation of coal blocks through the extant Screening Committee procedure till the new competitive bidding procedure became operational.

"This was a collective decision of the Centre and the state governments concerned," Singh said.

The Prime Minister noted that the issue was "contentious" and the proposed change to competitive bidding required consensus building among various stakeholders with divergent views, which is inherent in the legislative process.

Singh said the Ministry of Power felt that the auctioning of coal could lead to enhanced cost of production energy.

"In any case, in a democracy, it is difficult to accept the notion that a decision of government to seek legislative amendment to implement a change in policy should come for adverse audit scrutiny...The CAG report has criticised the government for not implementing this decision speedily enough ....But given the complexities of the process of consensus building in our Parliamentary system, this is easier said than done," he said.

Questioning CAG's computation of losses, the Prime Minister said coal blocks offered for captive mining are generally located in areas with more difficult geological conditions than those of the Coal India Limited.

"According to the assumptions and computations made by the CAG, there is a financial loss of about Rs 1.86 lakh crore to private parties. The observations of the CAG are clearly disputable," Singh said.

He noted that the CAG has computed financial gains to private parties as being the difference between average sale price and the production cost of CIL of the estimated extractable reserves of the allocated coal blocks.

"Firstly, computation of extractable reserves based on averages would not be correct. Secondly, cost of production of coal varies from mine to mine even for CIL... Thirdly CIL has been generally mining coal in areas with better infrastructure and more favourable mining conditions, whereas the coal blocks offered for captive mining are generally located in areas with more difficult geological conditions," he said.

Singh also said that a part of the gains would in any case get appropriated by the government through taxation as Mines and Minerals (Development and Regulation) Bill, presently being considered by Parliament and 26 per cent of the profits earned on coal mining operations would have to be made available for local area development.

"Therefore, aggregating the purported financial gains to private parties merely on the basis of average production costs and sale prices of CIL could be highly misleading.

Moreover, as the coal blocks were allocated to private companies only for captive purposes for specified end-users, it would not be appropriate to link the allocated blocks to the price of coal set by CIL," he said.

Singh also said that from 1993, successive governments continued with the policy of allocation of coal blocks for captive use and did not treat such allocations as a revenue generating activity.

Singh said the "idea of action was conceived for the first time by UPA government" in the wake of increasing demand for captive mines and action was initiated to examine the idea in all its dimensions.

"While the process of making legislative changes was in progress, the only alternative before the government was to continue with the current system of allocations through the Screening Committee mechanism till the new system of auction-based competitive bidding could be put in place.

"Stopping the process of allocation would only have delayed the much-needed expansion in supply of coal ... postponement of coal blocks until the new system was in place would have meant lower energy production, lower GDP growth and also lower revenue," he said adding it was "unfortunate" that the CAG did not take these aspects into accounts.

Singh also said the government has initiated action to cancel the allocations of allottees who did not take adequate follow-up action to commence production.

The Prime Minister also warned "due action against wrong doers" on the basis of the on-going CBI investigations into the allegations of malpractices.

He said it has always been the intention of the government to augment coal production by making available coal blocks for captive mining through transparent processes and guidelines, which fully took into account the legitimate concerns of all stakeholders, including the state governments.

Read: PM's 32-point statement

"The implicit suggestion of CAG that Government should have circumvented legislative process through administrative instructions, over the registered objections of several state governments including those ruled by Opposition parties, if implemented, would have been undemocratic and contrary to the spirit of the functioning of our federal polity," he said.

Maintaining that "CAG's findings are flawed on multiple counts", Singh said now that report is before the House, "appropriate action on the recommendation and observations contained in the report will follow through established Parliamentary procedures".

PM making excuses: BJP
The Bharatiya Janata Party (BJP), however, said on Monday that Prime Minister Manmohan Singh was making excuses to hide facts on the allocation of coal blocks.

"Country is upset with prime minister's statement. He is making excuses and is hiding the facts," BJP leader Prakash Javadekar told reporters after Manmohan Singh's statement in parliament on the issue that has seen adjournments of both houses during last week.

In the entire statement, Javadekar said, the only correct point is that the prime minister takes full responsibility for the decisions of the coal ministry.

"All the files related to coal allocation had his stamp as the coal minister and that is why we want him to resign," he added.


Manmohan Singh sought to make a statement in both houses of parliament on the controversial coal block allocation but the din raised by BJP members demanding his resignation drowned out his voice.

The Prime Minister was then compelled to table his speech in both houses.

(With PTI and IANS inputs)

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