Manmohan Singh
Manmohan Singh Reuters

The Indian government has found itself ensnared in yet another massive scandal that threatens to topple the graft-scarred administration of Prime Minister Manmohan Singh.

Opposition members in parliament – particularly the right-wing nationalist Bharatiya Janata Party (BJP) -- are demanding that Singh step down in the wake of revelations that the government lost about $34-billion by selling off coalfield properties to private companies at vastly below-market prices.

“Nothing short of the prime minister’s resignation will satisfy us,” said senior BJP official Yashwant Sinha.

Parliament session adjourned on Tuesday, with members of both sides of the aisle accusing the other of malfeasance and corruption.

The auditor’s report, from the Comptroller and Auditor General (CAG), also revealed that coalfields were sold off in the mid-2000s without an auction process – meaning they lacked competitive bidding or transparency.

However, the CAG document also exonerated the Prime Minister, citing that the coalfield sales were done at the recommendation of state ministers. But opposition members declared Singh was to blame since he was the boss of the coal ministry at the time of the questionable sales.

“I leave the question of Singh’s resignation to his conscience,” said Gurudas Dasgupta, a leader of the Communist Party of India.

The Singh government has responded that it is ready to discuss the matter with opposition figures, but that Singh would not quit.

Pawan Bansal, parliamentary affairs minister, said: "Let them [opposition] come for a discussion... It is not right on their part. They know that there is nothing. Still they are trying to create a situation on an issue which is not there.”

Similarly, the information and broadcasting minister Ambika Soni thundered: "When there is no proof to support their [BJP] argument why do they demand this? In every session, the Opposition… keeps demanding the Prime Minister's resignation."

Bansal also indicated that the BJP was itself complicit in the coalfields transactions.

"What was the stand of BJP chief ministers when [the] coal block allocation took place…? BJP was also one of the parties [involved],” he said.
The validity of the CAG report has also come under fire from the Singh government.
“The CAG has submitted the report without proof, basing its information on some documents. I think the CAG has a certain mandate under the constitution. It is not following it," said V. Narayanasamy, junior minister in the prime minister's office, according to the Wall Street Journal.

In addition, the current Coal Minister Sriprakash Jaiswal has already criticized the CAG’s $34-billion loss estimate since the coalfields were unexplored and their true value is unknown.
He also defended the strategy of selling coal reserves without an auction.
"Auctions would have made coal costlier and thus also made electricity expensive," he said. "Coal blocks were allocated in the national interest with an aim to boost growth of the country."

Meanwhile, the image of Singh’s ruling Congress Party has taken another beating. His government has been linked in a number of scandals, including allegations that senior party members profited handsomely from the allocation of telecommunication licenses and received kickbacks in connection with the Commonwealth games, which New Delhi hosted in 2010.