The Hindu Business Line : Coal blocks

If New Delhi is serious about getting the Eleventh Plan targets for the coal sector off the ground, steering crucial Acts through Parliament must get urgent priority.

If wishes were horses, India would become the largest coal producer in the world and self-sufficient in power. But intentions are just the primary condition for policy change as the coal industry and those interested in putting their money into this potentially lucrative sector constantly discover. The Coal Ministry, for instance, is willing to auction coal blocks in the command areas of Coal India and Singareni Collieries Company Ltd to private steel and cement companies . The idea is to sell such mines as are not needed by the two to the highest bidder to develop through long leases. So far, two blocks have been identified. So what is stopping the Ministry from doing what it desires?

Quite simply, the Mines and Minerals (Development and Regulation) Act that is before Parliament promises the changes needed to enable a more speedy development of the sector. Yet till the Act is approved by Parliament, the auction of coal blocks, among other matters, can only move at a slow pace. Under some provisions in the existing Act, an empowered committee, usually chaired by the Coal Secretary, would screen bids and allocate the blocks. In the last few years, a number of coal mines have been allotted for captive mining to private sector power and cement firms. But the impact has been insignificant; of the total production of 460 million tonnes from all the mines allotted since 2004-05, only 30 million tonnes came from the private sector.

The Act promises to change that with a more transparent auction process through competitive bidding with attractive mining leases for capital investment and state-of-the-art technology. The fact that the amended Act is investor-friendly and proposes more relaxed foreign direct investment norms is one of the prime reasons why mining companies from South Africa, Canada and Australia are queuing up. Considering the importance of coal for power growth in the Eleventh Plan, the least the government can do is to push the amendments through. Much as the refurbished Act will help create an enabling environment, the expected growth in coal mining may still be a distant dream if the problems of land acquisition and displacement are not resolved. Most of the mineral-rich states such as Jharkhand and Chhattisgarh are also the hotbed of rural foment that derails the sincerest plans as NTPC has found in its first venture into coal mining in Jharkhand. Amendments to the Land Acquisition Act that go some way in addressing these issues are yet to be formalised.

If New Delhi is serious about getting the Eleventh Plan targets for the coal sector off the ground, steering the crucial Acts through Parliament must get urgent priority.

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