Under India's 'honest' PM .... Coalgate scam was real ... says former auditor P Sesh Kumar ::: From Mr Clean Rajiv to Dr Clean MMS .... Congress story on Corruption had come a long way !!

Truth is stranger than fiction. When it comes to corruption in India - the Congress party knows every art about it. They display the master-skills in every regime.

The media and the pro-dynasty shopkeepers called Rajiv Gandhi - Mr Clean. His stint saw Bofors. Dr Manmohan Singh was Dr Clean ... and the 'expertise' of Congress-led UPA came out in multiple scams -- about half a dozen.

In between P V Narasimha Rao was hardly better. Even it was alleged by stock broker Harshad Mehta that he bribed the top leadership. The Congress - experts and the party as a whole - said .... one crore currency notes cannot come in a suitcase. 

It's a fact that the Coalgate scandal is (was) a major test of the anti-corruption resolve of Narendra Modi’s government that came to power in 2014 pledging to extirpate cronyism.

This menace was aggravated by the Congress government. 

Modi’s predecessor, Dr Manmohan Singh, prevailed over the worst era of coal cronyism and was directly in charge of the coal ministry for part of his government’s time in office.

 The Rs 1.86 Lakh Crore Bombshell .... was real.

Contrary to the UPA’s claims of “speculative math,” a new book reveals that the figure of Rs 1.86 lakh crore loss due to Coalgate under Manmohan Singh was neither plucked from thin air nor politically motivated. 

It was grounded in data from Coal India Ltd., covering 57 out of 75 private coal block allocations. The auditors calculated extractable reserves, applied industry-standard price-cost data, and made conservative adjustments for expenses. Every assumption was disclosed transparently.

“The CAG disclosed its assumptions upfront. Anyone questioning the figure could test those assumptions,” says the book penned by former auditor P Sesh Kumar. 

The auditors never claimed that Rs 1.86 lakh crore was a direct loss. It was a foregone opportunity, a quantifiable measure of how much the exchequer could have earned had the coal blocks been auctioned transparently, as later upheld by the Supreme Court when it cancelled all such allocations.

Dr Singh as Finance Minister under Rao 

P Sesh Kumar’s new book, 'Unfolded: How the Audit Trail Heralded Financial Accountability and International Supreme Audit Institution', reveals, the price of integrity was humiliation.  

Kumar served as Director General of Audit in the CAG during the coal block audit.

He now says his team, tasked with one of the most consequential audits in India’s history, was assigned a small, dingy room next to a stinking toilet in the Coal Ministry. The intent was not lost on anyone. It was a message from the establishment: you are not welcome. 

“The audit was not welcomed. They saw us as a nuisance,” Kumar told News18. 

“We were given a small room next to a stinking toilet. Toilets may have improved now, but they were stinking then.”  

The now-famous phrase “windfall gain,” Kumar reveals, wasn’t even coined by the CAG. 

It came from an internal note by the then Coal Secretary, who admitted that the allocation process had the potential of conferring “windfall gains” on private firms. The CAG merely quantified what the government’s own files already acknowledged.

The Hidden Files and the Ministry of Stonewalls

The process of unearthing the truth, however, was anything but smooth. 

The auditors faced stonewalling, non-cooperation, and even missing records. Out of more than 200 Screening Committee meetings where crucial decisions on coal allocations were made, the CAG’s team got access to just two or three sets of minutes.

The message was clear: the government had much to hide. Kumar writes of how files mysteriously disappeared, delays were engineered, and bureaucratic obstacles were piled high to frustrate the audit.

And yet, the auditors persevered. Working through holidays like Durga Puja, the team continued to dig until one day, they stumbled upon a policy file that would become the cornerstone of the entire scandal.

All powerful - 'mom-son duo' of UPA regime

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Kumar also argues that blockchain technology—often dismissed as a byproduct of cryptocurrency hype—could serve as the foundational infrastructure for integrity in public finance. 

He demonstrates how blockchain’s tamper-proof ledger could make fund flows from the Centre to states, districts, and villages traceable in near-real time. Misuse, diversion, or delay of funds would no longer emerge years later in audit reports but could be detected as they occur. 

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In fact, it was also alleged that mining permits the government allocated between 1993 and 2009, 218 in all, had been granted in an “illegal and arbitrary” manner.

The government committee that oversaw the process was a regulatory vacuum in which cronyism thrived.

P V Narasimha Rao 

That discovery demolished the UPA’s defense that auctions were “legally impossible” at the time. The truth, as the CAG report exposed, was far simpler: the new system was designed to benefit the chosen few.

This file contained internal communications dating back to 2004, including notes by the Coal Secretary, the Law Ministry, and even the Prime Minister himself, who briefly held the coal portfolio. 

It revealed that as early as 2006, the Law Ministry had cleared the concept of competitive bidding for coal blocks. 

But the government sat on it for years, preferring the opaque and discretionary allocation route that benefited a few private players.  

History has been kinder to the auditors. The Supreme Court later vindicated the CAG’s findings, calling the coal allocations “arbitrary and illegal” and cancelling all 214 coal block allocations made between 1993 and 2010. 

The constitutional watchdog had been right all along.

Note:

In 2013, the Supreme Court had directed the Centre to provide "full co-operation" to CBI in its probe in coal block allocations scam by providing it with all necessary information and files without any delay. 

"As regards ongoing investigation by CBI, we have made it clear that all necessary information as required by CBI and all necessary files that may be needed for inquiry/ investigation has to be provided by all concerned," a bench headed by Justice R M Lodha said.

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