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Government files affidavit in coal block scam: Everything you need to know about it

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The government has filed an affidavit in the Supreme Court in the coal block allocation case regarding all the 218 mining allocations that the apex court has brought under the scanner. The government has also filed an affidavit to give relief to the 46 coal mines, of which 40 are functional and six are about to be operational.

Here is everything you need to know about the Supreme Court verdict, the judgment that is expected and the companies that could take a beating.

Why did the Supreme Court term the coal block allocations illegal?

The Supreme Court observed that the coal blocks allocations from 1993 to 2010 were done in an arbitrary manner. It also observed that while allocating coal blocks, there was no transparency and the screening committee had flouted guidelines and recommended allocations on the basis of a pick-and-choose policy. 

How much money has been invested in the coal blocks?

So far, around Rs 2 lakh crore have been invested in the blocks. The court examined 218 allocations.

What will be the legal effect on the allocations now?

The Supreme Court may decide to deallocate all the mines allocated after 1993. The government is asking for an exemption on 46 mines, that are already operational or about to start operating.

How many blocks are operational now?

In total, there are 218 blocks, of which 80 have already been cancelled. According to the government, 40 coal blocks have started production while six will start production soon. 

Will the government ensure quick action?

The government may ensure a quick re-auctioning, if the Supreme Court decides so, to ensure that the target of one billion tonnes production by 2019 is met and all thermal power plants can have access to adequate and affordable coal.

Also Read: Coal Block Allocation: A chronology of events leading to the Supreme Court judgement

Which company is expected to be hit the most?

Jindal Steel and Power's three coal blocks with geological reserves of 2,341 million tonnes were allocated between 1996-2009. JSPL, along with other 19 other families, account for almost one-fourth of the total geological coal reserves across the country. As per Coal Ministry records, of the 43,346.35 million tonnes of reserves allocated, 20 companies got more than 10,000-million tons reserves.

Which are the other top companies that will be impacted?

The three big players expected to take a beating are JSPL, Essar power and Hindalco. Reliance Power could also suffer as the commercial exploitation of captive mines allocated for ultra mega power projects have also been barred. NTPC could lose three blocks, while players like JSW Steel and Tata Steel would not see any impact as of now.

The other companies to be affected, which will become clear only after the judgment comes, include: RPG Industries at the Sarisatolli coal block in West Bengal, Prakash Industries at a coal block in Chotia in Chhatisgarh and Usha Martin Ltd at a coal block in Katuria, Steel Authority of India Ltd ( SAIL), Monnet Ispat & Steel, Prakash Industries,  Electro steel Castings, Jaiprakash Associates, Sunflag Industries and state utilities of West Bengal and Karnataka. 

What does the Coal Mines Nationalisation Act, 1973 say?

The Coal Mines Nationalisation Act, 1973 makes some clear indications on who can carry out coal mining in India. It is clearly stated, referred to by the Supreme Court order as well, that mining can be carried out only for “production of iron and steel and generation of power, washing of coal obtained from mine or production of cement.”

Does the Supreme Court order have anything to do with the coal block allocation scam been enquired into by the CBI?

The two must not be confused. The court verdict, given with reference to a public interest litigation, says that the verdict should not have an impact on the CBI enquiry. The coal scam concerns the period of 2004-09 under the UPA regime, while the Supreme Court has said the process of allocation itself since 1993 has been illegal. The CBI, in the coal scam, is investigating 168 cases. Preliminary inquiry is over in 166 and the CBI has registered 14 FIRs, including against Naveen Jindal. The coal block allocation scam has caused a loss of Rs 1.76 lakh crore to the state exchequer, according to CAG estimates.

Also Read: Analogy of a scam and how can we avoid them

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