De-nationalise coal sector to boost growth: Montek Singh

Amid growing concerns over Indian economy not seeing any signs of revival, Planning Commission deputy chairperson Montek Singh Ahluwalia has argued for de-nationalisation of coal sector as a step to boost growth, which as per finance ministry's mid-term review has dipped below 6%.

Updated on: Jan 3, 2013, 23:46:03 IST

Hindustan Times | By Chetan Chauhan, New Delhi

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Amid growing concerns over Indian economy not seeing any signs of revival, Planning Commission deputy chairperson Montek Singh Ahluwalia has argued for de-nationalisation of coal sector as a step to boost growth, which as per finance ministry's mid-term review has dipped below 6%.

"Coal India's monopolistic position has not helped," Ahluwalia said on Thursday.

Former prime minister Indira Gandhi had nationalised coal in 1973 by setting up Coal India Limited, a holding company for all coal reserves in India, with a fear of mafia taking over the important mineral produce.

Since then, the government has allowed minor private participation in coal sector.

In mid-1990s, the government allowed private companies to mine for captive purposes only after the linkage for iron and steel, power and cements sectors was established. Still over 95% of coal mines are with Coal India or its subsidiaries.

The plan panel has said that 23,000 MW of power capacity added in the 11th Five Year Plan cannot be utilised because of absence of coal linkages. There is about 122 million tonne gap between the demand and supply of coal by Coal India.

Ahluwalia said that he believes that coal should be denationalised and private players should be allowed to commercially exploit the natural resource.

"If private players are allowed in other valuable natural resources such as gas and petrol, why not in coal?" he asked.

Coal is the only nationalized fossil fuel and source for about 70% of India's electricity need.

"I strongly support the move to de-nationalize coal mining in India as the move will usher competition and bring in the much needed latest mining technology," said Arvind Mahajan, partner and head for energy-infrastructure at advisory firm KPMG India.

Mahajan added that the de-nationalisation could also attract global mining firms into coal mining in India.

Critics of the proposal say that it would lead to huge increase in coal prices resulting in higher electricity cost for common person.

High energy cost would also add to inflation.

Experts cautioned that coal block allocation to private companies delinking it from captive usage may open up possibilities of speculative trading in the fuel.

The Plan Panel, however, says that Coal India has not been mine enough from its 475 coal mines despite the company being Rs 26,000 crore cash surplus.

The coal ministry officials, however, blame the environment ministry saying environment approval for 128 coal blocks are pending with the ministry.

With inputs from Vivek Sinha

ABOUT THE AUTHOR
Chetan Chauhan
Chetan Chauhan is the National Affairs Editor looking into all aspects of news and features from across India. A Chevening scholar with over three decades of experience in reporting and news management, Chetan has extensively covered all important aspects of the social sector, political economy, environment and climate change nationally and internationally. He did a journalism course at the Reuters Institute of Journalism in Oxford and Digital Media training at Nanyang Technological University in Singapore. He started as a reporter with The Statesman in 1996 and joined the Hindustan Times in 2000 in the metro bureau covering environment, crime and Delhi politics. He covered hot local news, from the Jessica Lal murder case to the rebellion of Delhi Congress MLAs against then Chief Minister Sheila Dikshit, to the replacement of toxic vehicle fuel with cleaner compressed natural gas (CNG) in the national capital. Some of his stories on air pollution became part of the Supreme Court’s landmark MC Mehta versus Government of India case in the National Capital Region (NCR), forcing the government to take corrective measures. As part of the national political bureau since 2004, he covered important central sectors such as environment, education, social justice, labour, rural development, water resources, renewable energy, agriculture, broadcasting and the Planning Commission for more than a decade producing several exclusive and investigative breaking stories. His specialisation is the environment, having covered at least a dozen United Nations global conferences on climate change, biodiversity and wildlife including climate summits in Paris, Copenhagen and Bali. He also covered India’s two five-year plans ---11th and 12th and reported on drafting and execution of right based laws such as Right to Education, Right to Information and rural job guarantee law, MG-NREGA, now being introduced in new format as VG-RAM-G Act. He has in-depth knowledge of social sector issues. He was one of the first to report on tigers vanishing from Sariska and Panna wildlife reserves in 2004 and 2008, respectively, leading to the setting up of the National Tiger Conservation Authority (NTCA) and the introduction of stringent penal provisions for poaching. He has written extensively on the rising human-animal conflict in India and the degradation of India’s biodiversity hotspots because of mining and other activities. Since 2004, Chetan has covered Parliament comprehensively and participated in training on the nuanced coverage of Parliament proceedings. He has travelled extensively across India to cover national and provincial elections since 1998, especially in the Hindi heartland states, considered India’s road to power. He writes a regular column for Hindustan Times, Ecostani, on important national politics, economy, Himalayan ecology and environmental issues. His other responsibilities include providing inputs for edits and edit page articles for the publication, apart from managing news flow from across India.Read More

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