What is the issue?
- The government recently gave some details on coal mining to the Rajya Sabha.
- Given the ambition on phasing out coal in India, the figures call for policy measures to better control and regulate the coal sector.
What do the figures show?
- Two years ago, the government had announced that India does not need any imported coal and instructed states as well as NTPC to stop imports.
- However, coal imports have grown 15% in the first 7 months of the current fiscal year.
- States such as TN, Karnataka, Maharashtra and Gujarat, along with NTPC and some private units in Punjab and MP, have issued tenders totalling 12.5 million tonnes.
- This has happened because India’s domestic output has not been able to keep up with the country’s demand.
- The demand grew at 7.6% during April-September, the highest in the past 5 years. The power demand is set to rise further.
What are the drawbacks in the coal sector?
- The shortage of coal is just a symptom of a deeper problem.
- Almost 95% of India’s coal mining output is by the public sector.
- Within this, Coal India Ltd (CIL) alone accounts for four-fifths of India’s production, making it, possibly, the world’s largest coal producer.
- But CIL's monopoly status has yielded little in terms of production techniques, quality of output, and environmental footprint.
- Indian coal mining is lacking in efficient and safer mining technologies, pit-head dust mitigation, coal washing, regeneration of forests, and restoration of open-pit mines.
- Besides these, almost a year has passed since the coal sector was opened up for private players.
- But most of them are hampered by the network of clearances and permissions.
What is the need now?
- Even as India ramps up its renewable energy sector, coal-based thermal power will continue to be a major component of its energy portfolio for decades to come.
- Improved coal mining and processing technologies are therefore critical for both production and the environment.
- Globally too, mining practices have changed dramatically with significantly greater capital intensity than is the current norm in India.
- India needs a shift towards improved regulation monitoring and enforcement in coal mining, beyond private companies' entry.
What should be done?
- Enabling greater investment in coal mining is essential from all perspectives, be it safety, production or ecology.
- Coal miners need to be held directly responsible for safer and more humane mining practices and state-of-the-art environmental practices.
- There has to be a greater role of the private sector, including global players to achieve these objectives.
- Given that important mines are already locked in the public sector, Coal India can be divided into smaller entities which can be privatised.
- This will result in greater competition, investment and improved mining efficiencies as well as better safety.
Source: Business Standard
