The Comptroller and Auditor General’s office has released scathing reports on several government deals. Its reports, which were tabled in Parliament on Friday, look at three critical issues- the allocation of coal blocks, big power projects, and deals concerning Delhi airport. They effectively bring corruption back into focus. Starting with coal, CAG says private companies made a financial gain of Rs 1.86 trillion when they received mining concessions. Its report urges the coal ministry to carry out competitive bidding for captive coal blocks. The government allocated 85 coal blocks to more than a hundred companies between 2004 and 2008.
CAG has also brought to attention the linkage between coal supplies and so-called ultra-mega power projects or UMPPs. It says the government hurt bidding processes by allowing Reliance Power to use extra coal from three blocks linked to the Sasan UMPP.
CAG’s third big target is another government showpiece- the modernized Delhi airport. It says authorities violated their own norms by offering post-contractual benefits to the Dial consortium that runs the airport. CAG says Dial was allowed to use 240 acres of land for commercial purposes against an equity contribution of Rs2,450crore. The report says the land was valued at Rs 24,000crore. CAG estimates the revenue loss over the 58-year license period would be around Rs1.64 trillion. The Dial consortium is led by infrastructure company GMR.
Moving to the economy, most independent analysts expect India to grow at less than 6% this year, but the government is a lot more optimistic. On Friday the Prime Minister’s economic advisory council forecast a GDP growth of 6.7% this fiscal. But it also stressed the need to rein in inflation and the fiscal deficit. India only grew at six-and-a-half percent of GDP in 2011-12. But C. Rangarajan, the chairman of the council says growth could actually pick up this year.
In corporate news, Maruti Suzuki is on its way to resume production at its Manesar factory. It has announced it will begin work on Tuesday, 21 August. Maruti will make 150 cars every day with a 300-strong workforce. It has also sacked 500 permanent workers after initial investigations. On 18 July, a riot broke out at the Manesar plant, leaving one manager dead and more than a hundred others injured.