CAG Disowns Coal Blocks Scam Report, Calls Media Reports Misleading

The Comptroller and Auditor General (CAG) has come down heavily on media reports that the government has lost Rs 10.67 lakh crore by not auctioning coal blocks between 2004 and 2009. It said that the reports are misleading as its audit report is still under preparation.

The Prime Minister's Office (PMO) issued a press release stating that the CAG did not mention loss in the allocation of 155 coal blocks between 2004 and 2009. The CAG wrote a letter to Prime Minister Manmohan Singh stating that the media reports are misleading, as the audit report is still in preliminary stage.

"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," said the press release from the PMO.

"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," it added.

The Times of India had reported that the government incurred a loss of Rs 10.67 lakh by allotting 155 coalfields to commercial entities without auctioning between 2004 and 2009.

The 110-page CAG draft report said that both private entities and public utilities benefited from the scam. A sum of Rs 4.79 lakh crore is estimated to have gone to the private entities and Rs 5.88 lakh crore to the government utilities.