The Print in reported that just about three months before the Lok Sabha elections, the NDA government finds itself with little reason to cheer when it comes to the coal sector. Coal accounts for 70 per cent of the power generated in India, and Narendra Modi’s administration had promised to end coal imports by 2016 by increasing domestic supply. The announcement was made in 2014 by Piyush Goyal, the then-Minister of State with Independent Charge for coal. But in 2017-18, India imported 208 million tonnes of coal, higher than the 191 million tonnes imported in 2016-17. The coal import bill also went up to USD 22,901.23 million (approx INR 1.63 lakh crore) in 2017-18 from USD 15,759.93 million (INR 1.1 lakh crore) the previous year.
The figures are still rising in 2018-19. In the April to December period, the quantity of coal imported stands at 171.81 million tonnes compared to 161 million tonnes in the corresponding period last year, to a PTI report quoting Mjunction Services, a B2B e-commerce joint venture by Tata Steel and SAIL. The April-November coal import bill has risen by 23 per cent over the corresponding period last year — USD 17,555.75 million (approx. INR 1.25 lakh crore) compared to USD 14,271.30 million (INR 1.01 lakh crore).
One of the Modi government’s top priorities when it took charge was to announce e-auction of coal blocks. But that exercise has not managed to generate any significant response.
India is the world’s fourth largest coal producer but continues to face a huge shortage in its supply, primarily due to faulty mining policy and the cancellation of coal block allocations in 2014, following the Comptroller and Auditor General’s (CAG) report.
On 20 February 2018, the government decided to throw open the sector to private participation, which was touted as a historic move that reversed the nationalisation of the sector under Indira Gandhi in 1973. The Cabinet Committee on Economic Affairs approved the methodology for the auction of coal mines and coal blocks.
The move was aimed at boosting healthy competition, increasing supply, thereby reducing imports and ending the monopoly of Coal India Ltd. But, 11 months on, the proposal is still on the drawing board.
An industry analyst said that “It’s time the government walked the talk and opened up commercial coal mining to the private sector. This will not only attract global coal mining majors, but will also bring new technology and best practices to a sector that has been a public sector monopoly. If the process is started now, India will have self-sufficiency in coal in the next decade.”
Besides power generation, coal is a critical resource for steel and cement production, among other things. A shortage of coal, therefore, has huge ramifications for the economy.
Another analyst told ThePrint that “Now, with a combination of higher global coal prices, higher imports and a depreciated rupee, the coal import bill in the current financial year is likely to surpass last fiscal’s bill by a wide margin.”
The Reserve Bank of India has already raised concern over the impact of coal imports on the current account deficit.
Source :- Steelguru.com