PTI reported that the coal ministry has contested before the PAC the CAG calculation that coal block allocations led to financial gains to the tune of INR 1,85,591 crore to private players, saying that it is flawed on basic fundamentals related to the geological sector.

In its response to the CAG report, the Coal Ministry has told Parliament’s Public Accounts Committee that transparent procedures were observed while recommending allocations by following a “broad policy framework“.

It said “It is to be stated that the calculation of the said financial gains were flawed on certain basic fundamentals related to the geological sector. The financial gains to private parties have been computed on the basis of the difference between the average sale price and the production cost of the CIL, as well as estimated extractable reserves of the allocated coal blocks.”

The ministry said “This computation of extractable reserves based on averages would not be correct in the geological sector. Moreover, as the coal blocks were allocated to private companies only for captive purposes for specific end-uses, it would not be appropriate to link the allocated blocks to the market price of coal.”

It also said that the basic intent of the government behind such allocation of coal blocks was to induce rapid development of infrastructure by involving the private sector to invest in identified priority sectors.

Source - PTI

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