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The Coal Story


Coal allocation scam or Coalgate, is a major political scandal concerning the Indian government’s allocation of the nation’s coal deposits to public sector entities (PSEs) and private companies. In a draft report issued in March 2014, the Comptroller and Auditor General of India (CAG) office accused the Government of India of allocating coal blocks in an inefficient manner during the period 2004–2009. Over the Summer of 2012, the opposition BJP lodged a complaint resulting in a Central Bureau of Investigation probe into whether the allocation of the coal blocks was in fact influenced by corruption.

  • The allocation process prior to 2010 allowed some firms to obtain valuable coal blocks at a nominal expense
  • The eligible firms took up this option and obtained control of vast amounts of coal in the period 2005–09
  • The criteria employed for awarding coal allocations were opaque and in some respects subjective.


  • The government has already garnered over Rs 2 lakh crore by auctioning just 33 blocks, surpassing the Rs 1.86 lakh crore loss estimated earlier by government auditor CAG for allotment of mines without auction.
  • Govt sells 3 mines for Rs 12,591cr.
  • Government all set to auction 15-20 coal mines next month.
  • The government is also likely to allot 43 mines to central and state PSUs this week.
  • Parliament last week approved Coal Mines (Special Provisions) Bill, 2015, which forms part of NDA government’s reforms agenda, in the nick of time on the last day of the first half of Budget session and the ordinance on this were to lapse on April 5.
  • The government initiated the e-auctions within 4 months of Supreme Court’s decision to cancel the allocations of 204 coal mines in the last week of September 2014.
  • Goyal said potential revenue of Rs 2.09 lakh crore from e-auction of 33 mines so far will accrue directly to coal-bearing states.
  • The auction will benefit Chhattisgarh, Jharkhand, Madhya Pradesh, West Bengal, Odisha and Maharashtra enormously over the years.


  • This will have a game-changing impact on state finances of Coal bearing states and ensure that development in these states occurs on a fast track.
  • The Make in India programme will receive an impetus and millions of jobs will be created.
  • It will also assuage the concerns of bank NPAs.
  • Cheaper power will be available to people 24X7.

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