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Wise way out of coal conundrum

The Modi government’s decision to sort out the coal sector mess by opting for electronic auctioning of the cancelled coal mines is a welcome development in favour of long-term accountability and transparency. Paying heed to the Supreme Court’s earlier order cancelling 214 of 217 coal blocks saying the method of allocation was ‘fatally flawed’, the Centre has now batted for short-term hard work and diligence that could pave the way for public benefits and proper distribution of the national asset and natural resource that is coal.

The decision to bring in an ordinance and fast-track the process is also well thought, since that would not only mean that the cancelled blocks will be reallocated in an open and completely transparent manner, but that as per Coal Mines Nationalisation Act, 1973, the interests of government-owned Coal India Limited, will be duly protected, even though decision on allowing commercial mining of these coal blocks could be taken at a later date. But the crux of the development, both the apex court order and the Central government’s move, lies in the fact that there’s wide-scale recognition that precious natural resources like coal, of which India is the third largest producer after the US and China, need to be shielded from predatory impulses of the private sector, and whatever commercial exploitation of our coal mines happen, must occur under strict governmental regulation for optimal utilisation.     

Besides the obvious thrust towards cleaning up operations in coal sector, the decision to e-auction and allow competitive bidding of the coal blocks, there’s also the push to rev up sinking economies of the poorer but mineral-rich eastern and central states, including Odisha, Jharkhand, West Bengal, Chhattishgarh, Madhya Pradesh, Andhra Pradesh, among others. Under the banner of Coal India, which controls 80 per cent of domestic production, these states can script a brand new chapter in economic revival, undoing the last decade of misgovernance and skewed centre-state relations. In addition, the trend of importing coal for power plants  and selling domestically produced coal in foreign markets for hefty profits could be suitably reversed with the Centre’s decision to e-auction the coal blocks. In sum, some rigour now can save a lot of hardships in power, cement and steel sectors, which are directly impacted by the upcoming coal auctions.

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