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Indian PM fights back over coal scandal

21:42 Mon Aug 27 2012

Indian Prime Minister Manmohan Singh has rejected a report by the official auditor that accused his government of missing out on billions of dollars of revenue by giving away coal rights.

Singh, who has been damaged by corruption scandals and policy paralysis during his second term in office, was shouted down in both houses of parliament on Monday as opposition MPs demanded he resign over the auditor's report.

"Any allegations of impropriety are without basis and unsupported by the facts," Singh said in a released text of the speech, which was his first reaction to the accusations made 10 days ago.

"The observations of the CAG (Comptroller and Auditor General) are clearly disputable," he said, adding that he took "full responsibility" for the coal policy developed while he was acting coal minister from 2004-2009.

Opposition parties in parliament have vowed to continue protests that have forced constant adjournments of business, with the government unable to pass any legislation.

On Monday, Singh's attempt to address parliament was met with a wall of noise drowning out his speech. He later spoke outside the building, issuing an appeal to opposition parties to end their protests and to debate the report.

"Let the country decide where the truth lies," the 79-year-old premier said.

The CAG report into coal allocation said private companies had made windfall gains of about $33.4 billion since 2004 after being given mining rights via a process that "lacked transparency and objectivity".

But Singh described the report as "flawed" in its analysis that competitive bidding for coal rights could have been introduced in 2006, and he criticised how it calculated the vast sums allegedly made by private companies.

"Postponing the allocation of coal blocks until the new system (of auctions) was in place would have meant lower energy production, lower GDP growth and also lower revenues," he added.

The disruption in parliament comes as India's economy is badly faltering, with investors and business leaders looking for decisive action from the government to restore confidence and spur expansion.

Quarterly economic growth slumped to its lowest level in nine years in the first three months of the year.

In his speech, Singh also said that the states ruled by the opposition such as West Bengal, Chhattisgarh, Jharkhand and Orissa had opposed competitive bidding.