NEW DELHI–India’s government may cancel as many as 41 coal blocks allocated toprivate companies unless environment clearances were obtained in the next six weeks, the federal government told the Supreme Court on Wednesday.
“The blocks are awaiting environment and forests clearances at various stages. If we don’t get the clearances in the mentioned time, we will proceed with cancellation,” Attorney General Goolam E. Vahanvati told reporters after a court hearing.
Mr. Vahanvati didn’t respond to queries as to why the companies may have to face cancellations for administrative delays.
The development comes as a blow to private companies, already facing a petition seeking cancellation of coal-block licenses because of alleged improper allocations.
The Comptroller and Auditor General, the federal auditor, has alleged in a 2012 report that the government lost $30 billion in potential revenues because the blocks were handed directly to companies rather than through auctions.
On the other hand, the government says that the method followed was aimed at increasing coal production quickly to resolve a crippling energy shortage.
It has so far allotted 194 coal blocks with total reserves of about 43 billion tons.
If all coal blocks are canceled, then the move would represent the second such development after 2012 when the Supreme Court canceled 122 licenses for mobile-phone services issued in 2008.
Last week, the Federation of Indian Chamber of Commerce and Industry voiced its apprehension saying that another such mass cancellation would hurt the economy.
“This may also put huge distress on the lenders and the banking sector that have funded these projects. This will have a spiraling effect on the entire economy as coal is feedstock to many of our core industries,” the industry body said.