Which sectors got the coal blocks? - Chart Of The Day 11 September 2012 - Equitymaster

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Which sectors got the coal blocks?
Sep 11, 2012

The coal block allocation scam is not the first is the list of scams that the UPA government's tenure has been endowed with. But unlike the CAG or the 2G telecom scam, this one has not been centered on few individuals. In fact it has embroiled a host of top policy makers including the Prime Minister. And it seems that believing in the government excuses is a far cry. Not just for the members of opposition but even general public.

The government has explained that auctioning coal blocks would have raised output prices in power sector. However, it seems a majority of the reserves were allocated for consumption in the unregulated sectors of steel, pig iron, sponge iron and cement. As per Business Standard, just 43% of the coal blocks were allocated to power sector. Since unlike power, the output prices of these commodities are not regulated, they ended up making abnormal profits. Which means that these entities made huge profits at the cost of the nation's limited resources. Whether the government or the corporates involved in the scam, the guilty certainly need to brought to book.

Data source: Business Standard
*Pig iron, Coal to Liquid and Commercial

This Chart Of The Day was published in The 5 Minute WrapUp - What is the most important thing in investing?

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