These reforms are targeted at giving benefits to the coal mining states. However, what this effectively indicates is that the cancelled coal blocks, all 214 of them, could soon be nationalised and brought under government’s direct control.
Briefing mediapersons after the Cabinet meeting, union finance minister Arun Jaitley said, ‘Power, cement and steel are three priority sectors and government will bring in ordinance for reallocation of coal blocks. We will soon announce the re-allocation of the coal blocks through e-auction for captive use and the whole process will be completed within three to four months.’
Earlier, on 24 September, in a landmark judgement, the Supreme Court had revoked 214 coal blocks out of 218, allocated since 1993, terming the method of allocation as ‘fatally flawed’, and asked the concerned companies to wind up their operations by March 2015. Jaitley said, ‘Power and steel is going through a tough time and India is importing coal even though we have surplus natural resources. Predominantly, the eastern states including Jharkhand, West Bengal, Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra and Andhra Pradesh will reap the benefits of the coal auctions.’
On whether the Coal Mines Nationalisation Act, 1973 would be amended to allow commercial mining, union minister for power and coal Piyush Goyal said an enabling provision for future commercial use of mines would be there as an amendment. ‘This is only for the future,’ he said.
‘There will be an enabling provision for the future where under rules which are framed for commercial users of mines could also be decided by the Central government. This would lead to an optimal utilisation of the natural resource.’
‘This will financially empower particularly the eastern states (which have most of the coal mines) and lakhs of labourers would get employment while bank capital held up with the allottee companies would be fruitfully utilised,’ Jaitley added.
The FM also denied a suggestion whether the process could be termed as ‘de-nationalisation’ of the coal sector saying, ‘The original Nationalisation Act remains and will remain and Coal India Ltd will be fully protected.’ CIL at present accounts for over 80 per cent of the domestic production.
The government also decided to open up the coal sector by allowing private firms in coal mining, ending the previous monopoly. ‘As the state sector requirements are concerned, coal mines would be allocated to them and as far as the private sector is concerned a certain number of coal mines will be put in the pool and there would be an e-auction,’ the finance minister said. Concerned over coal worth Rs 20 billion dollar being imported despite having surplus amount, he said, ‘The mess created by UPA since 2005 will be cleared in next four months.’
Since the emphasis of the government is on manufacturing sector, an expeditious disposal of this process would give a huge impetus to the manufacturing sector, he said. India is the world’s third-largest coal importer despite having the fifth-largest coal reserves in the world and with the cabinet decision on coal reforms the power crises in the country is likely to be resolved soon.
The government is also planning go ahead with price-pooling of imported and domestic coal to bring down overall coal prices in the country. A decision on reforms in the coal sector came after the government announced linking diesel prices to market rates and hiked prices of domestic gas over the weekend. The government needs to address the deficit in coal supply urgently to reduce import dependence and provide uninterrupted power to fuel a growing economy.
Meanwhile, the cabinet also decided to form a Committee under the Chairmanship of TK Vishwanathan, former Secretary General, Lok Sabha and former Union Law Secretary, to study the corporate bankruptcy legal framework in India and submit a report by February next year. The Committee will examine the whole gamut of issues relating to bankruptcy.
Briefing mediapersons after the Cabinet meeting, union finance minister Arun Jaitley said, ‘Power, cement and steel are three priority sectors and government will bring in ordinance for reallocation of coal blocks. We will soon announce the re-allocation of the coal blocks through e-auction for captive use and the whole process will be completed within three to four months.’
Earlier, on 24 September, in a landmark judgement, the Supreme Court had revoked 214 coal blocks out of 218, allocated since 1993, terming the method of allocation as ‘fatally flawed’, and asked the concerned companies to wind up their operations by March 2015. Jaitley said, ‘Power and steel is going through a tough time and India is importing coal even though we have surplus natural resources. Predominantly, the eastern states including Jharkhand, West Bengal, Odisha, Chhattisgarh, Madhya Pradesh, Maharashtra and Andhra Pradesh will reap the benefits of the coal auctions.’
On whether the Coal Mines Nationalisation Act, 1973 would be amended to allow commercial mining, union minister for power and coal Piyush Goyal said an enabling provision for future commercial use of mines would be there as an amendment. ‘This is only for the future,’ he said.
‘There will be an enabling provision for the future where under rules which are framed for commercial users of mines could also be decided by the Central government. This would lead to an optimal utilisation of the natural resource.’
‘This will financially empower particularly the eastern states (which have most of the coal mines) and lakhs of labourers would get employment while bank capital held up with the allottee companies would be fruitfully utilised,’ Jaitley added.
The FM also denied a suggestion whether the process could be termed as ‘de-nationalisation’ of the coal sector saying, ‘The original Nationalisation Act remains and will remain and Coal India Ltd will be fully protected.’ CIL at present accounts for over 80 per cent of the domestic production.
The government also decided to open up the coal sector by allowing private firms in coal mining, ending the previous monopoly. ‘As the state sector requirements are concerned, coal mines would be allocated to them and as far as the private sector is concerned a certain number of coal mines will be put in the pool and there would be an e-auction,’ the finance minister said. Concerned over coal worth Rs 20 billion dollar being imported despite having surplus amount, he said, ‘The mess created by UPA since 2005 will be cleared in next four months.’
Since the emphasis of the government is on manufacturing sector, an expeditious disposal of this process would give a huge impetus to the manufacturing sector, he said. India is the world’s third-largest coal importer despite having the fifth-largest coal reserves in the world and with the cabinet decision on coal reforms the power crises in the country is likely to be resolved soon.
The government is also planning go ahead with price-pooling of imported and domestic coal to bring down overall coal prices in the country. A decision on reforms in the coal sector came after the government announced linking diesel prices to market rates and hiked prices of domestic gas over the weekend. The government needs to address the deficit in coal supply urgently to reduce import dependence and provide uninterrupted power to fuel a growing economy.
Meanwhile, the cabinet also decided to form a Committee under the Chairmanship of TK Vishwanathan, former Secretary General, Lok Sabha and former Union Law Secretary, to study the corporate bankruptcy legal framework in India and submit a report by February next year. The Committee will examine the whole gamut of issues relating to bankruptcy.