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Prime Minister Manmohan Singh has asked Coal Minister Sriprakash Jaiswal to ensure that the report of the Inter Ministerial Group -- which is reviewing the allotments of coal blocks -- is on his table on September 16.
Till that time there would be no cancellations as is being demanded by the opposition Bharatiya Janata Party, sources in Congress say. The government does not want to be seen as arbitrary or reacting in panic mode after the BJP stalled Parliament for much of the ongoing monsoon session.
It is learnt that both the prime minister and Congress chief Sonia Gandhi wanted quick action taken to diffuse the situation but senior ministers have explained to them that this would send the wrong signal internationally, as it would scare away investors who would perceive India as an unreliable destination.
At the same time it would open the government to litigation since many of the genuine allottees would be well within their rights to go to courts for relief in the event that the cancellations were made without proper review and investigation.
Also, some biggies of the corporate sector are allotted the coal blocks that includes Anil Ambani, Naveen Jindal, Laxmi Mittal and Ratan Tata, too.
While the Central Bureau of Investigation is already investigating the coal block allocations, the IMG has written to certain companies which were allotted coal blocks to explain the delay in operationalising the mines and they want this explanation by September 8.
The IMG has already been in touch with many of the allottees and had sent them show cause notices in April itself when the Comptroller and Auditor General draft report was ready and government knew that the trouble was brewing.
All the coal blocks given from 2004 to 2009 were reviewed and 58 were given show cause notices and they are being reviewed now. 26 blocks were de-allocated in 2010 itself.
Sources say that despite the pressure on the government from both the opposition and media, there is no immediate plan for the cancellation of 142 coal blocks. Succumbing to BJP pressure will be interpreted as the admission of guilt, sources in Congress say.
Interestingly, while Union minister Kapil Sibal had said there is no loss to the exchequer since no mining has been done, now P Chidambaram is giving a different set of figures.
Addressing the media from the All India Congress Committee platform, Chidambaram said that 30 coal blocks are operational and they are mining coal and 17 are likely to start soon. He said that 58 are in the no-go area and have yet to receive environmental clearances and get sanctions for mining before the coal blocks can become operational.
32 coal blocks are unsatisfactory, out of which 7 were allotted before the United Progressive Alliance came to power in 2004.
Chidambaram said that the CBI is looking at the entire issue so there is no need for a judicial enquiry by a sitting judge as has been demanded by some leaders.
For the government it is not easy to penalise some of the allottees as many of them are powerful business groups and individuals and a host of others who were allotted captive coal mines for power and steel plants.
The government is already in the process of preparing data on the 'coal gate' and it is likely they may bring out a booklet to educate their leaders and workers and give them talking points on how to defend the government.
Congress leaders say they will take the fight to the streets and hold multiple press conferences and meetings through the country to expose BJP's 'lie' and 'to put the entire issue in perspective'.
The government and the Congress party are expected to work in tandem on this. With the monsoon session of the Parliament coming to an end this week, the action will shift to how political parties handle this and how they can reach the people with their point of views.
BJP wants the issue to become as big as "Bofors" while Congress is trying to turn the table by pointing out the facts that, all along, "the state governments ruled by non-Congress government were overtly and covertly supporting their decisions of allotment of coal blocks".