The Uttar Pradesh Legislative Assembly recently passed a resolution calling for the division of Uttar Pradesh [U.P] into four States. But the procedure for formation of new States laid down in Article 3 of the Constitution provides that a State has no say over the formation of new States beyond communicating its views to Parliament. Article 3 assigns to Parliament the power to enact legislation for the formation of new States. Parliament may create new States in a number of ways, namely by (i) separating territory from any State, (ii) uniting two or more States, (iii) uniting parts of States and (iv) uniting any territory to a part of any State. Parliament’s power under Article 3 extends to increasing or diminishing the area of any State and altering the boundaries or name of any State. Two checks constrain Parliament’s power to enact legislation for the formation of new States. Firstly, a bill calling for formation of new States may be introduced in either House of Parliament only on the recommendation of the President. Secondly, such a bill must be referred by the President to the concerned State Legislature for expressing its views to Parliament if it contains provisions which affect the areas, boundaries or name of that State. As can be seen, the only role that the U.P. State Legislature [the Legislative Assembly and Legislative Council] will play in any future formation of new States is when the President calls for its views to be placed before Parliament. Parliament will not be bound by these views in the process of enacting legislation for the formation of new States.

The Comptroller and Auditor General (CAG) released a Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production, on August 17, 2012.  Some of the main findings and recommendations of the report are highlighted below:

  • There were no criteria for allocating coal blocks for captive mining till 1993.  The process of bringing in transparency and objectivity began in January 2004.  However, the process has experienced delays and had yet to materialise as of February 2012.
  • In the intervening period, 194 coal blocks with geological reserves of 44,440 million tonnes were allocated to private and government parties until March 31, 2011.  The report finds that the benefit to private allottees has been estimated at Rs 1.86 lakh crore for Opencast mines.  The report states that the government could have tapped some of this financial benefit by expediting the decision on competitive bidding for allocation of coal blocks.
  • The rate of increase in production of coal by Coal India Limited (CIL) during the 11th Plan period remained below the target set by the Planning Commission.  Capacity addition projects were delayed due to the lack of coordination of government agencies involved in statutory clearances and land acquisition.  There were mismatches in excavation and transportation capacities of mines, and suboptimal use of Heavy Earth Moving Machinery.
  • The CAG recommends that Ministry of Coal (MOC) should work out modalities to implement the procedure of allocation of coal blocks for captive mining through competitive bidding.
  • The CAG recommends that the MOC should constitute an empowered group along the lines of Foreign Investment Promotion Board as a single window mechanism for granting clearances, with representatives from central nodal ministries and state governments.

A one-page summary of the main findings and recommendations can be accessed here.  The full report can be accessed on the CAG website.