The Comptroller and Auditor General (CAG) has criticised Neyveli Lignite Corporation India Limited (NLC India) after an audit found that a lignite mine was being operated without a valid environmental clearance.

The audit report identified shortcomings in the process followed by the company and raised concerns about adherence to statutory requirements. It noted that operations had continued despite the absence of up to date approvals from the competent authority.

The report set out the regulatory framework governing environmental clearances and emphasised the requirement for companies to secure and renew approvals before commencing or continuing mining activities. The CAG recommended remedial action including suspension of unauthorised operations, formal regularisation of permissions and strengthening of internal compliance systems.

NLC India is a state owned mining and power generation company with operations concentrated in lignite extraction and related power projects. The audit highlighted the environmental risks associated with mining activities, including potential impacts on land and water resources, and the need for robust mitigation measures. The report suggested that the company should prepare a detailed compliance plan and that auditors should examine financial liabilities arising from regulatory breaches.

The audit said regulatory authorities needed to ensure prompt follow up and transparent reporting of remedial measures to uphold public interest and environmental safeguards. It recommended that the company publish a timeline for obtaining required approvals and detail steps taken to mitigate impacts. NLC India was expected to respond to the audit recommendations with an action plan and documentation of corrective measures. Continued oversight by independent regulators and auditors was urged to restore compliance and maintain accountability.