Fact Checking Government claims about Reforms & Disinvestment
Sai Krishna Muthyanolla
March 15, 2019
The BJP government published an infographic on the 48-months portal. In this infographic, the government makes four claims about the reforms and setting up of institutions in the economy. This article is a fact check of these claims.
The BJP government published an infographic on the 48-months portal. In this infographic, the government makes four claims about the reforms and setting up of institutions in the economy. This article is a fact check of these claims.
Is the commercial Coal Mining sector open to private players now?
The first claim is that the government has ‘opened the commercial coal mining sector to private players’.
An answer in Lok Sabha from 2017 has stated that ‘the objective of commercial mining for sale of coal by private companies is to create a market place for coal with multiple producers to drive competition and adopt best practices in mining’.
A response in Lok Sabha from 2014 states that ‘in order to overcome acute shortage of coal in the country and augment its production, the Coal Mines (Special Provisions), Ordinance, 2014 was promulgated in October 2014. The Ordinance also amended the provisions of some existing Acts by inserting Section 3(A) in the Coal Mines (Nationalization) Act, 1973 and by amending Section 11(A) of Mines and Minerals (Development and Regulation) Act, 1957 thereby removing the restriction of end use from the eligibility to undertake coal mining, in the national interest. Under the said Ordinance, the word company shall have the same meaning as assigned to it in clause (20) of section 2 of the Companies Act, 2013’.
Another response from 2014 explains that ‘as per the provisions of the Coal Mines (Special Provisions) Ordinance, 2014, a company or a joint venture company formed by two or more companies are eligible to carry on coal mining operations in India, in any form either for own consumption, sale or for any other purpose in accordance with the permit, prospecting licence or mining lease, as the case may be’.
While the government took time to deliberate on the methodology of allocating coal mines to private players, a recent response in Lok Sabha from December 2018 informed that ‘the methodology for allotment of coal mines under the provisions of the Coal Mines (Special Provisions) Act, to Central/State Public Sector Undertakings (PSUs) for sale of coal was approved by the Government and order in this regard was issued in January 2016. The methodology for auction of coal mines/blocks for sale of coal under the provisions of the 2015 act has been approved by the Government and Order in this regard has been in February 2018’.
As per the latest information provided by the government in the Lok Sabha in February 2019, a total of 31 coal mines have been auctioned to Private/Government companies (30 to Private companies and 1 to a Government company) under the provisions of the new act. Of these 31 mines, 6 coal mines have been cancelled. The total revenue earned in the allocation (under the provisions of this act) of Mines till January 2019 is Rs. 6438.94 crores. Out of this revenue, revenue earned with auctioning of coal mines is Rs. 3999.54 crores.
Claim: Opened the commercial coal mining sector to private players.
Fact: The Coal Mines (Special Provisions), Ordinance, 2014 was promulgated in October 2014 and the act was passed subsequently. Hence, the claim is TRUE. As per the latest information provided by the government in the Lok Sabha in February 2019, a total of 31 coal mines have been auctioned to Private/Government companies (30 to Private companies and 1 to a Government company) under the provisions of the new act. Of these 31 mines, 6 coal mines have been cancelled.
Did disinvestment cross the target set?
The second claim is that ‘disinvestment crossed target of 72,500 crore rupees’.
The annual report  (2017-18) of the Ministry of Finance describes that ‘the Department of Disinvestment was set up as a separate Department in 1999 and was later renamed as Ministry of Disinvestment 2001.  From May 2004, the Department of Disinvestment is one of the Departments under the Ministry of Finance. The Department of Disinvestment has been re-named as Department of Investment and Public Asset Management (DIPAM) with effect from April 2016’.  The report also mentions that ‘the process of strategic disinvestment was initiated after a gap of approx. 12 years. The last strategic sale was done in 2003-04’. As per the report, ‘strategic divestment involves divestment of major shareholding of the Government along with transfer of management in the Central Public Sector Enterprises(CPSEs). It involves legal and financial issues having implications for the future performance of the CPSEs undergoing strategic divestment’.
A response in Lok Sabha from April 2017 confirms that ‘the budget estimate (BE) for disinvestment during the year 2017-18 is Rs.72,500 crore. This comprises Rs. 46,500 crore from disinvestment of Central Public Sector Enterprises (CPSEs) and Rs. 15,000 crore from Strategic disinvestment and Rs. 11,000 crore from listing of Insurance Companies’.
As per another response in the Lok Sabha from December 2018, the net proceeds from disinvestment in 2017-18 were Rs. 1,00,057 crores.
Claim: Disinvestment crossed target of 72,500 crore rupees.
Fact: As per available information, the net proceeds from disinvestment in 2017-18 were Rs. 1,00,057 crores. Hence, the claim is TRUE.
What is the RERA Act?
The third claim is that ‘home-buyers’ dreams and rights protected with Real Estate Regulation Act (RERA)’.
The website of the Ministry of Housing and Urban Development describes the act as ‘the Real Estate Act, 2016 that is aimed at protecting the rights and interests of consumers and promotion of uniformity and standardization of business practices and transactions in the real estate sector. It attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, set minimum standards of accountability and a fast-track dispute resolution mechanism’.
And the annual report (2017-18) of the ministry states that ‘the Real Estate (Regulation and Development) Act  was notified in March 2016’. The act mandates the establishment of Real Estate Regulatory Authority (RERA).
It has to be noted that the original bill was introduced in the Rajya Sabha in 2013, during the UPA. It was later referred to the standing committee which submitted its report.  Hence the conceptualization of the bill and the RERA authority was done during the UPA and the NDA improved upon the provisions of the original bill.
Below is the progress of RERA as of March 2019.
The above clearly shows that the claim is misleading in the sense that the bill was initiated and introduced in the parliament under the UPA and not the BJP government.
Claim: Home-buyers’ dreams and rights protected with Real Estate Regulation Act (RERA).
Fact: Though the act was notified in March 2016, it was originally introduced in the Rajya Sabha by the UPA government in the year 2013. The current NDA government improvised the bill.  The claim is MISLEADING as the credit for this does not just go the current government.
Is there transparent resource allocation in the coal mine allocation?
The fourth claim is that ‘transparent resource allocation with 89 coal mines allocated’.
A response in Lok Sabha from March 2018 states that ‘the allocation of coal blocks are made under the provisions of Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and the rules made thereunder wherein there is a process prescribed for allotment of coal blocks as per which State Government companies can apply as and when applications are invited by Ministry of Coal. Applications, if any, are considered as per the norms specified. Similarly, the allocation of 204 cancelled coal mines is made under the provisions of the Coal Mines (Special Provisions) Act, 2015 (CMSP Act) and the Rules made there under’.
The annual report (2017-18) of the Ministry of Coal states that ‘the allocation of 204 coal mines de-allocated by the Supreme Court is now made under the provisions of the Coal Mines (Special Provisions) Act, 2015. Under the provisions of the said Act, 89 coal mines have so far been successfully allocated. Of these 89 coal mines, 31 have been allocated through e-auction (30 to private companies and 1 to a Government company) and 58 have been allotted to Government Companies. Sector-wise allocation of these 89 coal mines are: 50 coal mines to the regulated sector i.e. power, 26 coal mines to the non-regulated sector i.e. iron & steel, cement and captive power and 13 coal mines for sale of coal’.
The report also informs that ‘Coal Blocks Allocation Rules, 2017 were notified in July 2017 which have repealed the ACBCM Rules 2012.”
A response in the Rajya Sabha from February 2019 also confirms the number of coal blocks allocated.
Claim: Transparent resource allocation with 89 coal mines allocated
Fact: 89 coal mines have been allocated under the provisions of the coal mines (special provisions) Act, 2015. However, only 31 of these have been allocated through e-auction. Hence, the claim is only PARTLY TRUE.
This story is part of a larger series on the 4-years of the Modi government. This series has been made possible with the flash grant of the International Fact Checking Network (IFCN). Read the rest of the stories in this series here