Policy reforms in coal sector: Govt to allow private sector participation
New Delhi, May 16: Finance Minister Nirmala Sitharaman on Saturday said that the government would allow commercial mining of coal on revenue sharing basis to remove govt monopoly. This means, now, any party can bid for a coal block and sell in the open market.
The finance minister made the announcement as she continued to give the finer details of the Rs 20 lakh crore stimulus announced by Prime Minister Narendra Modi earlier this week, in the wake of the coronavirus pandemic.
"Government monopoly in coal mining being removed. This will be done based on a revenue-sharing mechanism instead of regime of 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 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," she said.
"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 is 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.
"Government will introduce competition, transparency, and private sector participation in the Coal Sector through revenue sharing mechanism instead of the regime of fixed rupee, tonne," she further said.