Audit Reports

The audit reports of the Comptroller and Auditor General (CAG) of India on the issue of licences and allocation of 2G spectrum (2010)¹ and on allocation of coal blocks (2012)² also raise serious questions of governance, particularly the relationship between the political executive and the higher bureaucracy and the role and accountability of the secretary to the government.

In the coal blocks³ case, after the concept of allotment of coalfields of captive blocks through competitive bidding was made public in June 2004, the secretary put up a comprehensive note to the minister of state in July 2004 mentioning that, since there was a substantial difference between the price of coal supplied by Coal India and the coal produced through captive mining, there was windfall profit to the person allotted a captive coal block. This note also said that the bidding system would only tap a part of the windfall profit for public purposes. In subsequent submissions he highlighted the lack of transparency and objectivity in the existing screening committee procedure, the different kinds of pulls and pressures and stressed the need for an early decision on migration to the competitive bidding system. The views of the secretary seem to have been handled with a certain deftness and finesse, in a ding-dong manner, that permitted the continuance of the screening committee procedure over the years since, despite apprehensions of moral hazard and windfall gains to allottees, which were formally put on record by the secretary.