In order to give a boost to the coal sector of the country, the Modi government has launched a single-window clearance programme. So far, around 18 clearances were required for coal mining and this created a red-tape for the industries. In the last few years, the country imported coal from foreign countries despite having one of the largest coal deposits in the world.
Union Home Minister Amit Shah, who launched the single window clearance system, said that the coal sector would help India to reach a 5 trillion dollar economy by FY 2025. “Coal sector plays a key role in our economy; a boost in the coal sector will directly boost India’s economy. This platform will further our efforts by bringing huge investment and creating employment,” he said.
The Union Home Minister also applauded the Minister of Coal, Prallad Joshi for the efforts to boost the sector. In the last few months, the coal sector went through unprecedented reforms with commercial mining being allowed for the first time and the end of the monopoly of Coal India Limited, the inefficient public sector company which kept India backward in coal mining for decades.
Launch of the auction process of coal blocks for commercial mining is significant, as now private players will be allowed to extract coal without any restrictions on the end use of fossil fuel.
Earlier in June, the Modi government opened up its coal mines for the world, as Prime Minister Modi launched the auction process of coal blocks for commercial mining. However, the Central government issued a fresh set of guidelines in August, which states that Foreign Direct Investment in commercial coal mining from any country sharing a land border with India will be allowed only after government’s approval, which all but spells doom for Chinese companies looking to enter India’s coal industry. Therefore, the companies around the world except China and Pakistan are allowed to get involved in commercial mining in India.
In the last few years, the Modi government tried to increase the capacity of Coal India Limited and has succeeded to some extent. As per the data from the Ministry of Coal, the production of coal increased by 24 percent from 462.4 MT in 2013-14 to 573.8 MT in 2018-19. On the other hand, coal production increased by only 14.5 percent during the second term of the UPA government.
However, the demand for coal in the country is much higher compared to what state-owned companies are able to produce. Therefore, the thermal power plant companies and other industries which use coal are forced to import from the countries like China and Australia. And, these companies are forced to import not because there is lack of coal deposits in the country but due to lack of mining capacity of Coal India Limited, which had a monopoly over the sector till a few months ago.
Therefore, the Union government allowed commercial mining of coal. Given the fact India has fifth-largest coal reserves (106 billion tonnes) in the world, the country would be ‘Atmanirbhar’ in the coal sector as soon as commercial mining by private players picks up pace.
