[New Delhi]Kapil Sibal Has Cross questioned The Government’s Gains In Coal Block Auction
Prominent Lawyer And Senior Congress Leader Kapil Sibal said Coal Block Auction has generated benefits for Manufacturers of aluminium and created Loss To The Nation
former Union Cabinet Minister, Kapil Sibal writes in his blog that In the backdrop of the windfall gains from the Coal block auctions claimed by the Modi Government, and no less than Shri Narendra Modi himself, that the Government may gain a windfall from these auctions, but in the long run, it is the people of India who will pay the price.
Pointing out the basic nature of economic dynamics and market forces, sh Sibal cautions that the auction of natural resources such as coal have to be done carefully. Businesses that pay huge sums of money to win these bids, will pass burden on to their consumer, which is eventually the “aam aadmi” who buys goods and services who’s prices are directly or indirectly influenced by the selling price of coal.
Sh Sibal also points out, that the purpose of auctions should go beyond earning revenue for the government, and also try to energize and encourage the industry.
“Most of the coal blocks have been won by industry that produces neither steel nor cement or power. The most successful bidders in the auction manufacture aluminium. The result is that the share of the steel sector, which was allocated 65 per cent of the coal blocks before the auction, has been reduced to 25 per cent after the auction. The aluminium industry, which had been allocated 2 per cent of the coal blocks, has increased its share to 45 per cent. The very purpose for which the ordinance was promulgated has been defeated. Manufacturers of aluminium have benefited. The steel, cement and power sectors have lost out.”
The Central govt has claimed that the revenue gain from the recently-held coal auctions of 32 mines which has surpassed the estimates of the Comptroller and Auditor General for 200 mines.