India loses US$ 210 billion in potential coal revenue

The Government of India has been criticised for losing billions of dollars from the exchequer by selling coalfields too cheaply. A draft report of the Comptroller & Auditor General (CAG) has accused the Government of distributing 155 coalfields to private and state-owned miners rather than auctioning them off, undervaluing the coal resources by an estimated Rs 10.7 trillion (US$ 210 billion).

The leaked draft, published by the Times of India, is in a “preliminary stage” but has highlighted poor policy and the poor management of India’s coal resources at a time when the country is failing to meet its ever-growing energy demand.

Industry analysts have indicated that only around 30 of the approximately 200 coal mines that have been assigned since 2006 are currently in operation. The country has the fourth largest coal reserves, but its power generation sector – which relies on coal more than half of its fuel – is stagnating due to inefficiency and alleged corruption. Pranab Mukherjee, the Indian finance minister, has suggested that the Indian Government will look to re-possess unused coal blocks.

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