Coal scam? CAG calls own report ‘preliminary’,’exceedingly misleading’

Govt auditor tells PM that inputs by Coal Ministry 'have changed our thinking'; 'anguished at leak'.

Written by Express News Service | New Delhi | Published: March 22, 2012 3:13:26 pm

Government auditor CAG clarified to the Prime Minister today that its draft report on coal acreage allocation was ”at a very preliminary stage” and,therefore,”exceedingly misleading”.

Quoting this leaked CAG draft,media reported today that loss to the exchequer from coal acreage allocation to private companies was a mindboggling Rs 10.7 lakh crore. The loss had occurred because the 155 acreages were not auctioned,the media report noted.

The Prime Minister’s website put up the following release:

”With reference to the lead story published in the Times of India today titled ‘Government lost Rs 10.7 lakh cr by not auctioning coal blocks: CAG’,the Prime Minister has received a letter from the Comptroller and Auditor General of India at 1:30 pm today. Among other things,the letter clarifies that:

‘In the extant case the details being brought out were observations which are under discussion at a very preliminary stage and do not even constitute our pre-final draft and hence are exceedingly misleading.

…Pursuant to clarification provided by the Ministry in exit conferences held on 9.02.2012 and 9.03.2012,we have changed our thinking… In fact it is not even our case that the unintended benefit to the allocatee is an equivalent loss to the exchequer. The leak of the initial draft causes great embarrassment as the Audit Report is still under preparation. Such leakage causes very deep anguish.”’

Meanwhile,the Opposition made a case of this report in Parliament today forcing it to be adjourned in the first half.

Amid the uproar,Finance Minister Pranab Mukherjee said the CAG’s report was only a draft.

“This is not yet a CAG report. It is a draft report,” he told reporters here. Mukherjee further said,”CAG comes out with the draft report,then the ministry gives its comments. After that,there is a regular system through which the report is placed on the table of (both Houses) Parliament.”

The CAG’s draft report has estimated a Rs 10.7 lakh crore loss to the exchequer on account of allotment of coal blocks without auction,during 2004 to 2009,to 100 private and public sector companies.

The official auditor has estimated a “windfall gain” of Rs 6.31 lakh crore (PSUs — Rs 3.37 lakh crore and private parties — Rs 2.94 lakh crore) based on the prices prevailing during the year of allocation on constant cost and price basis as on March 31,2011.

The CAG report comes more than a year after its report on the allocation of scarce 2G telecom spectrum on first-come- first-service basis. It had estimated a presumptive loss of Rs 1.76 lakh crore to the exchequer.

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