Commercial coal mining opened for private sector

Commercial coal mining opened for private sector

Context:

• Opening up commercial coal mining for Indian and foreign companies in the private sector, the Cabinet Committee on Economic Affairs approved the methodology for auction of coal mines/blocks for sale of the commodity.

Introduction:

• The government described the move as the most ambitious reform of the sector since its nationalisation in 1973.
• Coal accounts for around 70% of the country’s power generation.

Benefits:

• This reform is expected to bring efficiency into the coal sector by moving from an era of monopoly to competition.
• It will increase competitiveness and allow the use of best possible technology into the sector.
• Public sector undertaking Coal India was so far the lone commercial miner in the country for over four decades.
• The company accounts for 84% of India’s coal output.
• It gives highest priority to transparency, ease of doing business and ensures that natural resources are used for national development.
• Entire revenue from the auction of coal mines for sale of coal would accrue to the coal bearing States, this methodology shall incentivise them with increased revenues which can be utilised for the growth and development of backward areas .