All About Coal Blocks Imbroglio

In India, the term “coal block” refers to the legal authority to operate a coal mine in a specific geographic area. In the United States and other nations, this is known as a coal lease.

Coal block allocation?

For months, coal has dominated national conversations. There is a need to look beyond the current debate and create a legal framework that will suit the long-term needs of our economy and even help it expand faster. For years, the government appears to have been pressured to increase transparency and revenue. 

Even though the first coal block has yet to be auctioned, the efforts, which began in mid-2004, appear to have been completed in 2011. The first deal in our economy occurred before the next election, which is quite unlikely. We have worked to fine-tune defective legislation in our haste to establish reliable arrangements. There was evidence that our economy’s compulsion was instilling a mindset of entitlement.

There were no criteria for awarding coal blocks until 1993. A committee was formed in 1993 to allocate land for captive coal block mining. The Screening Committee was in charge of all private company allocations. The minister made direct allocations for coal block mining for government enterprises. 

The Ministry of Power (Mop) has assigned some coal blocks for Ultra Mega Power Projects through a tax-based competitive bidding process (bidding for coal based on the tax at which power is sold).

Coal allocation Scam

The government opted in the early 1990s to allot coal blocks to private businesses that were not part of Coal India Ltd’s production plan. A list of 143 coal blocks was first generated, but it was later expanded to 216. Because coal mining was mostly not profitable for PSUs at the time, and many geographic regions were not ideal for lucrative mining, there were no strict standards for allocating blocks. 

Throughout Then, in Parliament, Manmohan Singh (PM Singh) rebutted the fraud claim and even questioned the CAG’s calculations. He had argued that West Bengal, Jharkhand, Orissa, and Rajasthan — all of which were then ruled by Opposition parties — were adamantly opposed to changing competitive bidding because they believed it would raise the cost of coal, have a negative impact on value addition and the development of industries in these states, and weaken their prerogative in lessee selection. 

According to him (PM Singh), the cost of producing coal varies greatly from mine to mine due to a variety of factors or conditions. The recommendations were updated on a regular basis in 1993, 1998, and 2003.

Between 1993 and 2005, 70 coal mines were approved. Then, between 2006 and 2010, another 146 blocks were assigned, increasing the total to 216. However, due to corporations that did not commence work, other blocks remained unresolved, raising the total number of blocks to 194.

A leaked copy of the CAG’s report from March 2012 revealed irregularities in coal block allocation and estimated a financial loss of Rs 10.76 lakh crore. Although the loss was lowered to Rs 1.8 lakh crore in the CAG’s final report, which was tabled in Parliament in August 2012, it was still one of India’s biggest scandals. The government has the right to sell coal blocks but not to choose which ones to auction, according to the CAG, resulting in a “windfall benefit.”

State of the probe:

The allotment of coal blocks cases are among the CBI’s longest-running investigations, with the most recent FIR being filed in January 2020. Since 2012, it has issued numerous complaint letters and even closed numerous cases due to a lack of evidence of guilt. In three separate incidents between 2017 and 2018, a special CBI court found Coal Secretary H.C Gupta guilty. In two of these cases, two more bureaucrats were found guilty. They were all sentenced to two to three years in prison.

Coal Shortage:  Rising power demand has sparked concerns about a coal shortage in the power industry, with officials claiming that coal stock at power plants is not increasing at the appropriate rate. Domestic coal continues to be burdened by unprecedented import coal costs of $200 per tonne, despite the fact that dependent power plants are scarcely working.

Conclusion

Fuel combustion and energy-related activities, emissions from captive power generation, mine fires, land-use change, and acquired products and services account for the majority of emissions in coal-mining sectors.