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NEW DELHI'S LATEST decision to permit coal and lignite mining by State government companies or their subsidiaries appears to be intended to facilitate a new tier for the development of the sector. The decision has to be seen against the backdrop of the poor progress in the implementation of the captive coal mining concept by involving the private sector in a big way. As a further measure of liberalisation, the ruling NDA coalition at the Centre mooted over a year ago an amendment in the Coal Mines (Nationalisation) Act, 1973 to allow coal mining per se — that is, without the captive end-use clause. But strong opposition by trade unions and the fact of the NDA not having a majority in the Rajya Sabha seem to be preventing the Union Government from moving the amendment Bill.

Withthe rather big gap between expected demand for coal (511 million tonnes) and the existing capacity (400 million tonnes) that the Planning Commission's Tenth Plan exercise has shown, the Centre has now thought it fit to throw open coal and lignite mining to State government companies or their subsidiaries. By any yardstick, it is a clever move by the Centre. Being deficient in investible resources and capabilities, the State government companies or their subsidiaries are bound to seek financially sound private sector collaborators who can organise coal and lignite mining on their behalf on mutually agreed terms, mainly to feed the thermal power plants. Thermal power plants account for over 70 per cent of the total coal consumption, and the sort of gap that the Planning Commission's demand-supply projections indicate is bound to affect them if coal output does not increase appreciably. Second, being the lessors for all mineral deposits, the State governments are responsible for a host of clearances, starting with the grant of leases. The ticklish issues involve land acquisition, rehabilitation of land losers, compensatory afforestation and environmental protection. Central projects have often been victims of time and cost over-runs because of the failure of the State governments concerned to discharge their responsibilities on time. Yet, the argument goes, when their own companies are involved, States may be expected to overcome or overlook the shortcomings and expedite matters.

NewDelhi's decision makes sense for other reasons too. The State directorates of mining and geology are engaged in detailed exploration of minerals, including coal. In a sense, therefore, there is already a degree of familiarity with the proven coal deposits that they may take up for mining. Then, they will be able to establish new linkages for coal supply to industries which currently come under the Centre's Standing Linkage Committee, whose decisions on the quantity and quality of supply often leave them sulking. If the initiative pays off, the responsibilities of the central coal and lignite companies should lessen over a period of time. That New Delhi wants to wash its hands off the ventures that State government companies may promote is clear from the conditions it has set — it will be for the States to see that all statutory provisions are strictly followed, the public sector outfits under the Centre's control will offer no financial help. Neither they nor the Centre will take over any State-run mine in the event of its closure or otherwise and they will also not absorb any employee of a State-run mine at any point of time. Will the States grab this opportunity?

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