According to the observation of Parliament Standing Committee on Coal and Steel, the Indian government did not follow best practice in allocating coal mines in the past 20 years.
The allocation in this period was illegal and amount to abuse of power as the government alloted it to a privileged few.
It said the allocation of "huge national resources" did not generate enough revenue for the government and helped only the private players.
The non-development of coal blocks will mean a big loss to the state exchequer as no royalty will be paid to the states. It may be recalled that coal block allottees are required to pay royalties or cess to the concerned states on coal production.
The performance and efficiency of allottee companies is questioned as out of 218 blocks allocated, production began only in 30 coal blocks.
The allocation of coal blocks, however, is defended by the government on grounds that it is needed to develop mines to accelerate economic growth.
The government argues that there is no wrong-doing and that officials at various levels were involved in taking decisions in the matter.