The Supreme Court has held that all coal blocks allocated since 1993—when the sector was opened up for captive mining by the power sector—are illegal because the process followed for allocation was non-transparent and dodgy. “There was no transparency by the companies as well as the central government,” Chief Justice of India R M Lodha, who headed the bench hearing a slew of petitions challenging the allocations, said. The allocation of licences has been the subject of a CBI investigation being monitored by the Supreme Court since 2012 when the Comptroller and Auditor General (CAG) said `1.83 lakh crore were lost because coal rights were not auctioned.
The Supreme Court order comes as a booster to the prestige of former CAG Vinod Rai and a strong indictment of the previous UPA government headed by prime minister Manmohan Singh, who had sought to rubbish the report in Parliament. While several governments headed by the Congress, the United Front, the National Democratic Alliance and the UPA are involved in the annulled allocations, the bulk of the coal blocks —166 of the total 218—were allocated under Singh’s watch when he had direct charge of the coal ministry.
The order will have far-reaching implications for policy-making and economic growth. In fact, it is likely to be even more damaging to the economy than the cancellation of 2G spectrum licences in February 2012. The Supreme Court has rightly blackballed the process and the new NDA government must lose no time in setting things right. While punishing those who took mala fide decisions by misusing their positions in power, it should follow the spirit of the law and put in place a transparent mechanism of auctioning public natural resources like coal, water, airspace and forestlands so that unscrupulous elements don’t influence the policy makers. It must ensure that the projects hampered by delay in availability of land, mines and coals and other natural minerals are not held up further due to legal or man-made road blocks.