Focus on coal

In the ongoing political furore, the urgent need for coal sector reform must not be lost sight of

In his detailed statement in Parliament on the allocation of coal blocks, Prime Minister Manmohan Singh did not say this: his government is in favour of allowing coal miners to sell coal without having to route it through Coal India, the public sector company that has a monopoly over all coal produced in India, except in captive mining in sectors such as power and steel. The PM did clearly state that he favours competitive bidding for the mineral. The logical extension of that argument would lead to the de-nationalisation of coal mining, which, given that the ministry of coal is already planning to bring in a regulator for the sector, should not be a problem. If reform could be initiated in these two areas — who can mine and to whom to sell — the Indian economy could end up the winner, whichever way the current furore over coal ends politically.

The method of doing it would be to allow the long-pending Coal Mines (Nationalisation) Amendment Bill 2000, now pending in Rajya Sabha, to be passed by both Houses in the ongoing session of Parliament. In principle, the passage of the bill should not present great difficulties as it was prepared by the BJP. The object and reasons for the legislation reiterate widely shared concerns over coal shortage and the inability of public sector-led mining to fill the gap. With a shortfall of nearly 30 million tonnes between the production and requirement of coal in 2012-13, it is even more urgently needed now. The prime minister referred to the bill in his reply, omitting to mention, however, that it was his own party, 2000 onwards, that had dallied, asking for an unnecessary round of consultations with state governments, for instance.

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