In a move that might put the Centre in a confrontation, not only with the Opposition but also with the judiciary, the government has decided to put its foot down against complete auction of coal blocks.

The finance ministry, which is now under Prime Minister Manmohan Singh, has decided to oppose the proposed policy to make auction the binding principle for dealing with coal blocks.

The finance ministry is of the opinion that auction could only be considered for surplus coal blocks and there was no question of auctioning the blocks meant for captive use by power projects.

This view would be brought on record by the ministry during the next meeting of the empowered group of ministers (EGoM) on coal, which is likely next week. The EGoM would be chaired by Home Minister P. Chidambaram.

Government sources told Headlines Today that "The top priority of government at this point of time is to produce cheap power. You cannot do so by allowing such high increase in input costs. Coal is the most important input for the country's proposed UMPPs (Ultra Mega Power Plants).”

They said that "Revenue maximization is not the sole objective of natural resources. It has to be balanced with larger national good.”

Taking on the Comptroller and Auditor General on the issue, sources said that "Making policy is not CAG's jurisdiction. CAG's observation on a matter outside its jurisdiction should not be the reason for government to shift its policy focus."

The government has been under major attack for its decision to go ahead with allocation of coal blocks without auctioning. Even the prime minister's role in the entire matter has been questioned. Former coal secretary, reacting to a Headlines Today story, said the prime minister had ignored the advice for auction and exercised undue hurry in going ahead with allocation.

The CAG, in its draft report, has said that not auctioning coal blocks caused a loss of INR 180,000 crore to the exchequer.

Source - India Today

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