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January 18, 2019
1 year

What is the issue?

  • The government recently gave some details on coal mining to the Rajya Sabha.
  • Given the ambition on phasing out coal in India, the figures call for policy measures to better control and regulate the coal sector.

What do the figures show?

  • Two years ago, the government had announced that India does not need any imported coal and instructed states as well as NTPC to stop imports.
  • However, coal imports have grown 15% in the first 7 months of the current fiscal year.
  • States such as TN, Karnataka, Maharashtra and Gujarat, along with NTPC and some private units in Punjab and MP, have issued tenders totalling 12.5 million tonnes.
  • This has happened because India’s domestic output has not been able to keep up with the country’s demand.
  • The demand grew at 7.6% during April-September, the highest in the past 5 years. The power demand is set to rise further.

What are the drawbacks in the coal sector?

  • The shortage of coal is just a symptom of a deeper problem.
  • Almost 95% of India’s coal mining output is by the public sector.
  • Within this, Coal India Ltd (CIL) alone accounts for four-fifths of India’s production, making it, possibly, the world’s largest coal producer.
  • But CIL's monopoly status has yielded little in terms of production techniques, quality of output, and environmental footprint.
  • Indian coal mining is lacking in efficient and safer mining technologies, pit-head dust mitigation, coal washing, regeneration of forests, and restoration of open-pit mines.
  • Besides these, almost a year has passed since the coal sector was opened up for private players.
  • But most of them are hampered by the network of clearances and permissions.

What is the need now?

  • Even as India ramps up its renewable energy sector, coal-based thermal power will continue to be a major component of its energy portfolio for decades to come.
  • Improved coal mining and processing technologies are therefore critical for both production and the environment.
  • Globally too, mining practices have changed dramatically with significantly greater capital intensity than is the current norm in India.
  • India needs a shift towards improved regulation monitoring and enforcement in coal mining, beyond private companies' entry.

What should be done?

  • Enabling greater investment in coal mining is essential from all perspectives, be it safety, production or ecology.
  • Coal miners need to be held directly responsible for safer and more humane mining practices and state-of-the-art environmental practices.
  • There has to be a greater role of the private sector, including global players to achieve these objectives.
  • Given that important mines are already locked in the public sector, Coal India can be divided into smaller entities which can be privatised.
  • This will result in greater competition, investment and improved mining efficiencies as well as better safety.


Source: Business Standard

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