Ficci asks govt to end monopoly of Coal India

Industry body Ficci on Monday said that the government should take steps to end the monopoly of Coal India and allow private players in coal mining.

"Coal exploration has to be accelerated. Private players should be allowed in coal mining to create healthy competition," Ficci president RV Kanoria, who was in Hyderabad to attend the executive committee meeting of the industry body, said.

He said Ficci has suggested that the government should reduce its stake in PSUs to less than 50% which would be sufficient enough for it to be part of all major decision making processes in the company but at the same time would help make PSUs observe basic market discipline.

He said during the 12th Five-Year Plan (2012-17), import dependence for petroleum products is likely to be as high as 80%, while for coal, it would be 28%.

"As regards coal, today our imports are 15%. By the end of the 12th Plan, imports are going to be 28%," he said, adding that at present power plants with 22,000 MW capacity are suffering due to lack of availability of coal.

Criticising the tariff structure, he said distribution sector is the weakest link in the power sector and retail tariffs are irrational.

"Cross-subsidies prevail among consumer categories due to populism which leads to virtually giving free power for the agricultural sector. Revision of tariff is often guided by political pressures than economic reasons. Rationalisation of tariff for industry by reducing the gap between industry and domestic tariff is necessary," he said.

As regards natural gas, Kanoria said the development of natural gas industry in India was being stymied by distortions in pricing mechanism.

The share of natural gas in the overall energy mix is only 10% against the global average of 24%, he added.

First Published: May 07, 2012 21:26 IST