Why Auction Is Not The Best Policy?

It is a wonder the Government moving again and again in the no-auction way and landing in troubles. It was the case with 2G and now the same issue had happened with coal allocation too. It is said that not only the 142 coal licenses under UPA2 government, but also many other licenses under the previous NDA rule too were given without auction. The BJP ruled state governments too opposed auction idea of Coal blocks. No auction means less transparency and more chances of corruption. And as per CAG reports, loss to nation because of no auction is a whooping 1.86 lakh crore.

As long as the present licenses to the coal mining parties are not cancelled, finance minister Chidambaram’s claims that there is no loss as no coal is mined out yet, won’t stand tall as an explanation.  But the question is still unclear – Why no governments follow the policy of auctions?

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