Rejecting the CAG report, the Government said Friday that coal block allocation to private firms were done in a transparent manner.

Defending the allocation, Coal Minister Sriprakash Jaiswal said, "There could not have been a better policy than this.”

The CAG has come to the conclusion that the Coal Ministry did not put in place a competitive bidding mechanism for allocation of coal. The policy was proposed in 2004. But the competitive bidding could not be taken up then due to conflicting legal opinions. Also States such as Rajasthan, Chhattisgarh and West Bengal had opposed the competitive bidding process then, Jaiswal said.

Stating that his Ministry was not in agreement with all aspects of the CAG report, Jaiswal said the assessment by the auditor was based on only a few aspects of coal allocation. Jaiswal sought to term the Rs 1.86 lakh crore loss to exchequer as estimated by the CAG as ‘notional’.

Of the 57 coal blocks allocated to private companies, only one has been operational, Jaiswal said. The Coal Ministry has started the review of the un-operative blocks since 2009 and has started de-allocating them, Jaiswal said. So far, 25 blocks allocated to various entities has been de-allocated, officials said.

The coal blocks, allocated in line with the recommendations of the screening committee that consisted of representatives from the various State Governments was aimed at boosting the economic growth. The private companies were roped in to develop the blocks as Coal India was unable to meet the fuel requirements of the growing economy. Justifying the two blocks allocated to Tatas and the Jindal Steel and Power Ltd for their coal-to-liquid projects, Jaiswal said they were aimed at narrowing the crude oil imports.

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