If 2012 witnessed the explosion of the Coalgate scam, the year 2013 stood witness to its repercussions as the CBI which was given the charge of investigating the resultant muck that emanated from the controversy, went on an FIR filing spree against entities whose role it found suspect.
While the CBI went on with its probe, a cautious Coal Ministry pushed the pause button as far as offering coal blocks through competitive bidding is concerned. Despite announcing on several occasions that it would soon come out with the procedure for allotting coal blocks through competitive bidding, the process is still being finalised as the Government does not want to leave anything to chance.
At the same time though the ministry has gone ahead and offered several blocks to Government entities which required the reserves for end use purposes like power. Probably the promptness in addressing the needs of Government entities was driven by the fact that allegations were also levelled under the Coalgate scam where in some instances blocks were reportedly given to certain influential private entities while overlooking the requirement of State-owned firms.
Meanwhile, even as the probe continues under the watchful eyes of the Supreme Court (to whom the CBI has been regularly giving updates by filing status reports), the year saw several corporate bigwigs and former bureaucrats coming under the scanner for their alleged involvement in the controversy.
The CBI during the year filed FIRs against Aditya Birla Group Chairman Kumar Manglam Birla and former Coal Secretary PC Parakh.
The agency till October 2013 had registered 14 FIRs in connection with the alleged graft in allocation of coal blocks in which AMR Iron and Steel, JlD Yavatmal Energy, Vini Iron and Steel Udyog, JAS Infrastructure Capital Pvt ltd, Vikash Metals, Grace Industries, Gagan Sponge, Jindal Steel and Power, Rathi Steel and Power ltd, Jharkhand Ispat, Green Infrastructure, Kamal Sponge, Pushp Steel and Hindalco have been named as accused.
The Coal Ministry, under Sriprakash Jaiswal, maintained its oft-repeated stand that no wrong was done under the current dispensation (which had took over the reins in May 2009) and its top officials reiterated that they gave their full cooperation to the CBI probe.
Despite this, the investigating agency was at loggerheads with the ministry over certain crucial files, which could not be traced either in the ministry or in the offices of Coal India ltd (CIl) across the country. These files contained crucial leads regarding allegations levelled by the Comptroller and Auditor General (CAG) in its report that certain corporate bigwigs were reportedly openly favoured on grant of blocks during the meeting of the Screening Committee which in the mid-2000s used to decide on the allocation.
While the Coal Ministry claimed that it had given all the documents sought by the CBI, the agency countered this. Even as the year has drawn to a close, the status of these files, which contained detailed minutes of the meetings of the Screening Committee held in 2005, remained ambiguous.
On the policy front, the Coal Ministry, after much changes and amendments in its original format, approved the diluted Coal Regulator, which would advise the CIl in fixing the price of the dry fuel. Originally it was supposed to fix the price on its own and was even vested with the powers of awarding punitive measures like jail term for entities which failed to develop blocks on time. All those powers were divested from it.
The Bill for this purpose was introduced in the just concluded Winter session of the Parliament.
The Coal Ministry is also in the process of outsourcing mine development work of reserves owned by CIl to private entities. For this a committee has been set up under the chairmanship of Secretary (Coal) to recommend a framework for the public private partnership initiative.On the disinvestment front, the Government’s ambitious plan to divest its share in CIl is facing stiff opposition from its labour unions and it may now go for a special dividend route.
The overall mining sector of the country remained bleak owing to the prevailing ban on iron-ore mining during the whole of 2013. Many mines in Karnataka are yet to reopen for want of clearances, even though the Supreme Court in April had lifted nearly two-year old ban in the state with some stiff conditions.
The impact of the decisions on mining will continue to be felt in 2014, especially in Goa where the ban continues and the domestic economy to a large extent is dependent on mining and related activities.
Odisha - the largest iron ore producing state - is also facing issues like excess production and may possibly be heading for a ban in the new year due to a 5-volume explosive report of Justice M B Shah Commission that was submitted to the Union Mines Ministry in two parts - in July and October.
Contents of the report have not yet been made public but as had been reported by The Pioneer, which had exclusive access to its findings, it was found by the panel that some concessionaires have been running the mines despite their lease having long expired.
It had further noted that “all modes of illegal mining is being carried out” in Odisha and miners are “making super normal profits”.
The Indian economy also felt the tremors of the impact of mining bans in 2013. While the Indian GDP grew at the rate of 4.6 per cent in the first half of the current fiscal, the mining sector continued its negative growth trend of two previous fiscals and contracted by 1.6 per cent during April-September, 2013.
To bring back the mining sector on track, the Government contemplated reducing duty on iron ore exports during the August-September period after the official data showed that Indian GDP growth had plunged to a decade low of 4.4 per cent. However, it dropped the idea following opposition from the Steel Ministry and steel companies.Output of the mining sector, with a weight of about 14 per cent in Index of Industrial Production (IIP), had shrunk by 2.7 per cent during April-October as against a contraction of 1 per cent.
Also the Government failed to table the final Mines and Minerals (Development and Regulation) Bill, 2011 in Parliament, even though a Parliamentary Standing Committee had given its recommendations in way back in May.