Fast-For­ward Coal Re­forms for Power

The Economic Times - - The Edit Page -

Prime Min­is­ter-elect Naren­dra Modi is re­port­edly keen to fast-for­ward re­forms long on the back-burner in the vexed coal sec­tor that is marred with de­clin­ing out­put, at­ten­dant short­ages, a stodgy pub­lic sec­tor mo­nop­oly and fast-ris­ing im­ports — the world’s third largest — de­spite the fact that In­dia has the fifth largest re­serves of what re­mains our main source of commercial en­ergy. The pro­posed move makes em­i­nent sense and brooks no de­lay. The game plan is to hive-off Coal In­dia Ltd into in­de­pen­dent sub­sidiaries, at­tract for­eign di­rect in­vest­ment into the sec­tor, and also make the re­spec­tive state gov­ern­ments eq­uity hold­ers. The Bill to re­peal the Coal Mines (Na­tion­al­i­sa­tion) Act, 1973 has been pend­ing in the Ra­jya Sabha for over a decade now and can be promptly made into law, if re­quired in a joint set­ting of both Houses. We have had cap­tive joint ven­tures in coal for two decades now, and the idea of con­tin­u­ing pub­lic sec­tor mo­nop­oly is plain out­dated and anachro­nis­tic. In any case, cap­tive coal mines sim­ply dis­cour­age scale economies and scut­tle trans­parency. In­stead, we need mul­ti­ple coal pro­duc­ers com­pet­ing for cus­tom, so as to have timely sup­ply and rev up fuel qual­ity. Note also that the pro­duc­tiv­ity in In­dia’s coal min­ing and evac­u­a­tion re­mains one of the low­est glob­ally, and we do need to so­licit for­eign ex­per­tise and in­vest­ment to shore up out­put. In tan­dem, we clearly need to over­haul the umpteen opaque, gov­ern­men­tal ap­proval pro­cesses for for­est, en­vi­ron­men­tal clear­ance and land ac­qui­si­tion. The way ahead is to put in place clear-cut norms in­clud­ing for af­foresta­tion, and go for time-bound ap­provals, junk­ing the case-by-case ap­proach. A thriv­ing coal sec­tor is vi­tally nec­es­sary to boost power pan-In­dia. And cre­at­ing it is fairly straight­for­ward.

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