Coalgate scam

It was an eventful year in the world of finance and business, one that actively involved all three actors: the government, people and even the common man. From violent employee agitations to controversial reform proposals and volatile economic indicators, we compile the twelve defining news events of 2012.

Image via Reuters

The scam’s name may pun with a popular toothpaste brand, but there is nothing to smile about. The scandal exposed by The Times of India came as another shock to a nation outraged by financial misdeeds during the UPA’s rule.

In a draft report issued in March 2012, the Comptroller and Auditor General of India (CAG) office accused the Government of India of allocating coal blocks in an inefficient manner during the period 2004-2009.

According to CAG, the Government had the authority to allocate coal blocks by a process of competitive bidding, but chose not to.

As a result both public sector enterprises (PSEs) and private firms paid less than they might have otherwise. The CAG Final Report tabled in Parliament estimated that the "windfall gain" to the allocatees was at around Rs 185,591 crore (US$35.08 billion).

Indian Prime Minister Manmohan Singh rebutted the CAG's report both in its reading of the law and the alleged cost of the government's policies.

While the initial CAG report suggested that coal blocks could have been allocated more efficiently, resulting in more revenue to the government, at no point did it suggest that corruption was involved in the allocation of coal.

However, the question of corruption has come to dominate discussions since it is still being argued whether the issue is one of deliberate mismanagement, criminal intent or pure negligence.

The war of words between the CAG and Congress party continues – and the tax payer has no choice but to wait and pray that the guilty will be brought to justice.

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