On Saturday Finance Minister Nirmala Sitharaman stated the fourth tranche of her ₹20 lakh crore economic package focusing on structural reforms. that the government would permit commercial mining of coal on profit sharing basis to remove govt monopoly which means that from now any party can bid for a coal block and sell in the open market.
The FM stated that around 50 coal blocks will be offered instantly. This will be done through a revenue-sharing mechanism rather than the regime of a fixed rupee per tonnes. This is contrary to the earlier norm in which only captive consumers with end-use ownership could bid.
“Government monopoly in coal mining being removed. This will be done based on a revenue-sharing mechanism instead of a regime of a fixed rupee per tonne. Any party can bid for a coal block and sell in the open market,” said Sitharaman.
“India has the third-largest valued coal availability in its untapped mines, and yet we still import coal and emerging sectors suffer because the raw material is not available. Regulations are required when there is a shortage. But this country has abundant coal. Coal bed methane will also be auctioned,” Sitharaman added.
This is being proclaimed to reduce the import of substitutable coal and Aintree self-reliance in coal production.
The government will also invest Rs 50,000 crore for constructing evacuation infrastructure.
“Coal beds will also be auctioned. Coal bed extraction will also happen through auctioning. Rs 50,000 crore will be spent by the government for creating evacuation infrastructure, to evacuate mined coal,” the minister said.
“The investment of Rs. 50,000 crores are for the evacuation of enhanced CIL’s (Coal India Limited) target of 1 billion tons of coal production by 2023-24 plus coal production from private blocks,” the finance minister added.
Meanwhile, the FM also proclaimed the privatisation of power utilities in union territories. It would reduce cross-subsidies, the FM said.
“Government will introduce competition, transparency, and private sector participation in the Coal Sector through revenue sharing mechanism instead of the regime of the fixed rupee, tonne,” she further said.