The Supreme Court, on Monday, will decide the fate of the coal blocks that had been allocated since 1993. On August 25, the Court had declared all the allocations since 1993 as illegal though it had said that de-allocation of the blocks would need further hearing. The Supreme Court had said that the coal block allocations suffered from "illegality" and "arbitrariness."
It disallowed any exploitation of captive mines by ultra mega power plants (UMPP) and has said that commercial usage of captive mines cannot be allowed. It said that the government did not adhere to proper guidelines and no objective criteria were being followed either. It had gone on to say that the consequences of the illegality would be clear on September 1.
Arun Jaitley, in a press conference, that presented the financial report card for the first 100 days of the Modi government. He said, the Supreme Court judgement on coal block allocation will move the system towards a fairer system of allocation of resources. However, he said, "We cannot allow the fate of the coal blocks to hang in the air. They need to be utilised for what coal is utilised for. So whether existing allottees use the coal or fresh allotment is made, we have to wait for the SC decision to know that. But I cannot set a timeline for the court."
However, the court had said that its decision should have no bearing on the investigation on coal block allocation scam that was already ongoing. The judgement "clarified that consideration of the present matter shall not be construed, in any manner, as touching directly or indirectly upon the investigation being conducted by CBI and ED into the allocation of coal blocks."
The judgement is unlikely to deallocate all the coal blocks since 1993, as it might shatter a power sector that is already reeling under pressure. Many banks would also suffer heavily as some of these coal blocks are already functional and are used as collateral by the companies for the loans.
The markets seem careless and optimistic at this point with the Nifty breaching 8000 points for the first time.
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