Under fire, India's prime minister defends no-bid coal awards

Indian Prime Minister Manmohan Singh, pictured here on August 15, 2012, was coal minister between 2006 and 2009.

Story highlights

  • New audit report says lack of auctioning of mines may have cost government billions
  • Opposition lawmakers are calling for Prime Minister Manmohan Singh's resignation
  • But PM calls report "clearly disputable," says "allegations of impropriety are without basis"
  • Singh's government is already under fire for a series of corruption scandals

India's beleaguered prime minister, Manmohan Singh, on Monday sought to defend allocations of coal fields without competitive bidding as opposition lawmakers called for his resignation over an audit report that says the exchequer may have lost up to $33 billion by not auctioning off the mines.

Singh's statement to parliament was drowned out by shouts of "the prime minister must resign" as members from the opposition alliance walked into the well of the chamber in protest.

At the same time, his office posted short excerpts from a statement on its Twitter account calling the report of the Comptroller and Auditor General (CAG) "clearly disputable."

Singh was the guardian of the coal ministry for part of the period reviewed by the CAG in its report, which was released last week.

According to the audit, private companies that were sold the coal blocs could have seen a potential profit of $33 billion.

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"A part of this financial gain could have accrued to the national exchequer ... ," the CAG wrote, noting delays in adopting bidding as the process to award coal mines could have caused the loss.

In his defense, Singh also cited a lack of consensus with several opposition-ruled states over switching to auction during the period assessed by the auditor.

"I want to assure hon'ble (honorable) members that as the minister in charge, I take full responsibility for the decisions of the ministry. I wish to say that any allegations of impropriety are without basis and unsupported by the facts," the prime minister said in his statement, whose full text was later published on the Indian government's website.

"The CAG report has criticized the government for not implementing this decision speedily enough. In retrospect, I would readily agree that in a world where things can be done by fiat, we could have done it faster. But, given the complexities of the process of consensus building in our parliamentary system, this is easier said than done," he said.

Singh also questioned the CAG's methods of estimating the loss to the government and profit to private companies.

India depends heavily on coal for power, and with its rising population and industrialization, it is struggling to meet demands.

Singh was coal minister between 2006 and 2009, when many of the sales assessed in the CAG report took place. The auditor, however, did not indict the prime minister.

Its findings, nonetheless, paralyzed the Indian parliament, with members from the opposition group led by the Hindu nationalist Bharatiya Janata Party mounting a vigorous attack on Singh, whose government is already under fire for a series of corruption scandals.

"The prime minister's statement didn't resolve our contention. Instead, it strengthened it," said Sushma Swaraj, the opposition leader in the lower house of the national assembly. She said Singh's government, now in its second term, took years to enforce a policy of competitive bidding that was conceived in 2004, when his government first came to power.

"We demand the prime minister should take moral responsibility and resign," Swaraj told reporters.

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