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CAG defends Rs 1.85 lakh crore figure in report

Vinod Rai says CAG has qualified professionals to conduct audits on any sector.

CAG Vinod Rai today defended the Rs 1.85 lakh crore figure in the auditor’s report on coal block allocations,saying the organisation would have failed in its duty by not mentioning the financial gain to private firms.

In a presentation before Parliament’s Public Accounts Committee (PAC) on CAG’s report on coal blocks,Rai also said the auditor neither advocated any particular policy nor commented on it.

During the presentation,most Congress members in the Committee blamed the report for a part of the financial problems alleging that the rupee devalued and FDI flows reduced after it was tabled in Parliament,sources said.

They also asked the CAG as to why the report covered the period between 2004 and 2009 and not 1993 onwards.

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During his detailed presentation,Rai also explained the methodology used by the auditor in arriving at the figure and scoffed at suggestions that terms including “windfall gains” were the auditor’s creations. He said the term was used by the Coal Ministry.

He said the calculation of gains in the final report was made on the basis of extractable quantity of coal from open cast mines only since the Ministry argued that underground mining was not as profitable. He also said the auditor relied

on the “reliable” figures made available by Coal India Ltd and did not go into the calculations of private mine owners.


At one point of time,Rai told the Committee that “we would not have done our duty if we had not mentioned the likely financial gain… We indicated the magnitude of the loss,” the sources quoting the CAG said.

Replying to questions on why the CAG chose to audit the period between 2004 and 2009,Rai said the year was a “watershed” period as several companies had bid for captive coal blocks for thermal power plants due to government’s ‘power for all’ programme.

He said the CAG also looked into the functioning of screening committees and gave examples that while between 1993 and 2003,the committee met 22 times and allocated 41 blocks,it met 14 times between 2004 and 2008 and allocated 175



When Rai was asked why the report had not mention of reasons which led to certain companies eliminated from the list,he blamed the Coal Ministry for not providing the reasons.

Later,Coal Secretary S K Srivastava,who appeared before the panel in the evening,said the minutes of the meetings where some companies were eliminated from the list were not available. He said since the issue related to “energy” it

should be available with the Power Ministry.

During the presentation,Congress members like Sanjay Nirupam accused the CAG report of creating sensation and giving out “imaginary figures”.

Nirupam also read out a letter of the Coal Ministry addressed to the CAG saying ministry does not agree with the draft report. Rai said though he does not dispute the letter,government often does not subscribe to CAG reports.

Srivastava is learnt to have been grilled by members for his ministry’s failure to put across its view before the auditor when the report was being finalised.


He was also asked about notings and a letter of the ministry in which the government has agreed that the coal allocation process was not transparent and “opaque”.

First published on: 21-09-2012 at 17:58 IST
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