NEW DELHI: The government on Friday rejected the Comptroller and Auditor General’s estimate of presumptive loss of Rs 1.86 lakh crore in allocation of 57 coal blocks, with finance minister P Chidambaram asserting there was no question of a loss when mining had started in only one block. “If coal is not mined, if it remains buried in mother earth, where is the loss? The loss can arise only once the coal is taken out of mother earth, mined and sold at unacceptable price or value. But if the coal is not mined, where is the loss,” Chidambaram said as he led a fresh government offensive to counter the opposition’s demand for the prime minister’s resignation on the issue that has stalled Parliament this week.

'Presumptive and flawed report'

Pointing to recent analysis in the media, he said, “This presumptive loss, I deeply regret to say, is so flawed.”

However, he strongly denied that he was echoing the “zero loss” thesis telecom minister Kapil Sibal put forward to dispute CAG’s estimate of Rs 1.76 lakh crore loss from the allocation of 2G spectrum.

Coal minister Sriprakash Jaiswal said that while finalizing the report, the CAG did not factor in coal ministry’s views on estimated undue gains to companies. “I have said it earlier also… I do not agree with CAG’s estimate. The gains cannot estimate the gains the way CAG has calculated… Our officers had explained to CAG and told them that please discuss with us before finalizing your report. But it was not done,” he said. Chidambaram, flanked by the coal minister and law minister Salman Khurshid, said the opposition was not allowing Prime Minister Manmohan Singh to make a statement, stressing that the coal ministry merely went by the recommendations made by the opposition-ruled states — Jharkhand, Chhattisgarh, Rajasthan and Odisha.

The finance minister said Singh will make a fresh bid to respond to the charges levelled by the opposition on Monday, and indicated that the government will then have no choice but to make a statement outside Parliament.

However, when asked why the government dragged its feet on moving to an auction-based system as recommended by the law ministry, Chidambaram acknowledged the “process could have been quicker”.

In its report, CAG has criticized the government for not moving to a system of auction-based allocation of coal mines, which had caused notional loss to the exchequer and benefited private companies. It also said the government did not push for a new regime despite a coal secretary suggesting a change in policy. BJP, the main opposition party, has said it will not let the House function until the PM resigns as the allocations took place when Singh held the portfolio.

Jaiswal and Chidambaram, however, countered the charge saying that a shift in policy followed since 1993 could not take place as all the states were not on board. They pointed to letters from BJP-ruled states such as Chhattisgarh, Jharkhand and Rajasthan that had opposed auctions. “How can you change the policy when the main coal producing states are not willing,” Jaiswal said.

While defending the UPA, Jaiswal said it was the UPA government which got states on board, got the law amended and is in the process of finalizing allocation through a bidding process, which is unlikely to be completed in 2012.