Does the Net Revenue to the Government constitute truly the welfare of the people ? In reality, no ! When the Government leases the coal blocks to the exploration companies, it is the People who pay for the use of the downstream products – say power or steel.
So, People are paying for the use of the resources that are “owned” by them. The role of Government in the matter of national resources is therefore essentially allocatory, not mercantile. That is, the role of the Government in the matter of national resources is not to sell them to the highest bidder and deliver the proceeds to the People. That would be the case if the resources had no use for the People, but were sold to outsiders; then the maximum Net Revenue of the Government would mean maximum welfare of the People.
The object of allocatory function is to ensure that the usufruct of the national resources is equitably distributed among the People; that it is not usurped by a few. In that case the Net Revenue of the Government becomes not only an irrelevant variable, but may even go contrary to the goal of the function. In the case of the coal block allocation, if the price of the blocks is set at a level, which raises the cost of downstream products beyond the reach of the poorer segments of People, then it defeats the very object of government intervention in allocation of national resources.
Pricing of national resources, therefore, should be based on something like the principle of Pareto Optimality: the national resources should be so priced that the resulting allocation is such that the People are better off after the allocation than before the allocation. I have deliberately capitalized the first letter of people, to emphasize its sovereign importance.