Recently, the Centre has opened up commercial coal mining for the private sector. Discuss the possible effects of this move on Indian coal sector. (200 words)
Refer – The Hindu
Enrich the answer from other sources, if the question demands.
IAS Parliament 7 years
KEY POINTS
· Commercial coal mining is currently not open to private players at present.
· The Centre has now opened up commercial coal mining for the private sector and approved the methodology for auction of coal mines for sale of coal.
Current demand scenario
· Despite an aggressive push for renewable and nuclear sources, India has a high dependence on coal for power generation.
· Currently, 70% of electricity generation is through coal-fired thermal plants.
· Despite its rich coal-bearing belts and increased output, Coal India Ltd is unable to keep pace with demand from new power plants.
· Consequently, there has been a significant surge in coal imports lately.
Impacts
· This privatising move will ensure –
a) assured coal supply to the power sector
b) affordable power for consumers
c) accountability in allocation of coal mines
· This move is expected to move the sector from an era of monopoly to that of competition.
· This will help in meeting the surging local demand for coal.
· The approved methodology for auction of coal mines / blocks for sale will prioritise on transparency and ease of doing business.
· It is expected to bring in
a) higher investment
b) boost energy security
c) best possible technology
d) greater efficiency
e) more employment in coal-bearing areas especially in the mining sector
· It would also lead to more revenue that can be used for development of the area and inhabitants around the mine by the State.
Way Ahead
· It is also important to ensure the integrity of the auction process and the checks needs to be placed to dissuade unviable bids.
· These are highly critical to ensure that a reliable and continuous coal supply is ensured for the power sector.
