NDTV | Updated On: October 21, 2014 12:58 (IST)
The Narendra Modi government has set in place building blocks for reforms in the coal sector with the cabinet recommending an Ordinance or executive order with a provision to allow commercial mining for domestic companies, though it has set no timeline for this. The move comes days after the government kicked off reforms in the energy sector by decontrolling diesel prices and hiking gas prices.
The union cabinet's decision yesterday is the most serious shift in 42 years towards allowing private players full participation in the sector, analysts say. The Sensex jumped over 150 points on these announcements in early trade today.
The Ordinance will also allow the government to take back coal-bearing land from private companies whose mining licences were cancelled by the Supreme Court in September.
The government will then hold an electronic auction of the mines for steel, power and other companies for their own consumption. The e-auction of coal blocks for private companies will be held in three to four months, Finance Minister Mr Jaitley said on Monday.
Companies that will give up some of mines after the Supreme Court order - such as Jindal Steel and Power Ltd, Sesa Sterlite and Hindalco - will also be able to take part in the auctions.
In the first round of bidding, 74 of the 214 cancelled coal blocks, which are producing or ready-to-produce or substantially developed, will be auctioned.
Mr Jaitley said requirements of the central and state governments would be met and coal mines would be allocated to public sector companies like NTPC or state electricity boards.
The finance minister said the proceeds of the auctions would go entirely to the state governments where the mines are located. States in eastern India like Jharkhand, West Bengal and Chhattisgarh will be the biggest beneficiaries, he added.
The government did not announce big ticket reform to end the monopoly of the state-run Coal India, which has been unable to meet its production target, turning India into the third largest coal importer despite having the fifth largest coal reserves in the world.
The government does not intend to impact the structure of the state-run Coal India, the finance minister said. A plan to increase production quickly remains in force, he added.
Coal India, the world's biggest miner, has been unable to ramp up production quickly but its huge workforce consisting of around 3.70 lakh employees has resisted attempts to introduce new technologies, fearing job losses.
| For Profit Update, |  |
No comments:
Post a Comment