REFORM PUSH-- COAL ALLOCATION.

ESSAY FODDER—the hindu

THE SIGNIFICANCE OF MINES AND MINERALS AMDT. BILL AND COAL MINES BILL: 2015.

It marks a significant step forward in the Central government’s reforms push. 

 It effectively ends government monopoly over the extraction of coal, which has existed after coal mining was nationalised in 1973.

Allows for auction of coal blocks.

The auctions have lead to the windfall of revenues to the coal- bearing states.

It has opened up the path for foreign investments in the sector, since Indian arms of foreign companies are entitled to bid for blocks, as well as for commercial mining of coal, which can have a salutary effect on prices going forward. 

Despite having reserves of 301 billion tonnes of coal — the fifth largest in the world — India has been plagued by chronic coal shortages, leading to costly imports by power and metal producers. This has led to severe power shortages, with downstream impact on both industry and individual consumers. 

With 90 million tonnes of coal expected to be produced from just the 42 operational mines in the blocks auctioned so far, such shortages may well be a thing of the past.

The move is also beneficial to the state-owned Coal India Limited, which may now get the elbow room to bring in some much needed technology and best practices, while opening up prospects of a better future for millions of mine workers.

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