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Many Bright Spots in India’s Coal Sector

Being a coal-rich nation, India for a long time failed to utilize the potential of this sector properly. Till 2014, India’s coal sector was making headlines for mostly wrong reasons like scams and inefficiency. The agenda of reforms set by the Modi government seems to be paying in many ways now. Let’s examine some of the trends that are showing through recent media reports.

Efficiency in Working

There is certain efficiency that is evident among the public sector units managing the coal production in India. Here is a public sector unit that is meeting the target before the deadline.

There are other indicators that show that the public sector unit that faced challenges during the initial phase of the pandemic have promptly bounced back.

Investing in the Future

Public sector undertakings that are working in Coal sector such as Coal India and NTPC are betting big on renewable energy projects.

NTPC has emerged as one of the winners for the recent bids for solar projects, including a bid for 200MW, in a 500MW auction by Gujarat Urja Vikas Nigam Limited in December 2020. Similarly, in another more recent bid by GUVNL in March 2021, both CIL and NTPC have emerged as winners for 150MW and 100MW capacities, respectively.

Opening Up of Coal Sector

India has auctioned coal mines for commercial mining and eased many regulations so that the potential in this sector can be fully utilised.

The successful bidders/allottees have now been entitled to utilize mined coal in any of its plants or plants of its subsidiary or holding company. Amendments also provide for allocation of the coal mine to the next successful bidder or allottee, subsequent to termination of its allocation along with the matters incidental to it.

Environment and forest clearances along with other approvals and clearances shall automatically get transferred to the new owners of mineral blocks for a period of two years from the date of grant of new lease. This will allow new owners to continue with hassle free mining operations. During the period, they may apply for the fresh licence beyond the period of two years.

While all these measures ensure ease of doing business for the interested, the firms need to make an upfront payment which ensures money to the State’s exchequer.

You may like to read an article from the 2017 dateline which gives you a detailed account of how the transformation of coal sector started with various measures back then. Read BRINGING THE COAL SECTOR ON TRACK for the account.