The eclipse has ended- India’s coal sector witnessing rays of development
In the 75th year of independence, Hon’ble Prime Minister has given us a call to come together and celebrate Azadi ka Amrit Mahotsav and make it a mass movement. India has come a long way in the past 75 years. Coal sector of India, however, saw major development and reforms only in the last 8 years. India’s energy and industrial ecosystem are witnessing an extraordinary scenario today.With scorching heat waves, record-breaking temperature, and industries booming with a promising economic recovery after the global pandemic, there is an unprecedented growth in the power demand. Because of our positive reforms, today we are well equipped and confident to face this situation and turn challenges into opportunities.The achievements and contribution of the coal sector to fulfil India’s energy needs are significant. Coal is the very source from where India gains its strength.
Behind the record numbers of electricity connections provided in the last eight years, behind the industrial and manufacturing sector operating non-stop 24 x 7, behind the economy’s stellar performances, Coal has played the role of industrial backbone.
From darkness of opacity towards Boosting Transparency
A slew of policy interventions and bold steps, since 2014, have helped the Indian coal and mineral mining sector grow in a responsible, sustainable & industry friendly manner. The Coal Mines Special Provision Act was enacted in 2015, putting an end to the decades of malpractices and arbitrary allocation of resources. CMSP enactment played a vital role in ensuring availability of coal for sectors such as steel, cement, and power utilities, which are necessary for the development of the country and to augment coal production by transparent allocation of coal mines through auction.10 tranches of auctions have been held between 2015 to 2020. 35 coal blocks have been successfully auctioned through these tranches. A total of 85 coal blocks stand allocated – including auctioned and non-auctioned blocks, with a total Peak Rated Capacity (PRC) of 440.6 MT.
In order to ensure availability of coal to the power sector, the government introduced the Scheme for Harnessing and Allocating Koyala (Coal) Transparently in India (SHAKTI) policy in 2017. Coal linkage was extended to the power sector under SHAKTI policy for just and efficient distribution of coal.
Dawn of a New Era: Commercial Coal Auction
Hon’ble Prime Minister launched the auction for Commercial Coal Mining in 2020. Launch of the commercial coal auction was like a fresh breeze to the entire coal sector by bringing transparency, ease of doing business, investment opportunities, and helping open the sector.
End use restrictions for utilization of coal were removed, 100% FDI was allowed for more investment and healthy competition. The 2020 reforms resulted in creation of a free market for coal with private participation, bringing competition and greater efficiencies.A number of procedural changes were also introduced for the 1st time towards the development and regulation of coal sector, such as incentive of 50% rebate for early production, allowing single bid, liberal entry norms etc. Since the launch of Commercial Coal Auctions in June 2020, 4 tranches have been completed. 47 blocks have been auctioned so far with a peak rated capacity of 101.5 MTPA. These blocks will generate approx. Rs. 11,172 crore revenue and potential employment for more than 1.17 lakh people. Captive coal producers have been allowed to sell 50% of their production in the open market after meeting the demand of their end use plants.
Mining with Responsibility: Mission Coal Gasification & Green Initiatives
The government is also conscious about the fact that while coal is going to remain the most important source of energy in the country, clean coal technologies and diversification is the only way forward. We are committed to scaling up mining activities in the country in an environmentally sustainable way.
National Coal Gasification Mission took a definite direction with Hon’ble Finance Minister announcing 4 pilot projects, during her budget speech this year.In order to incentivize more participation and increase coal production, the rebate of 20% was increased to 50% for successful bidders using their coal for coal gasification and liquefaction. Coal PSUs have prepared an investment plan of almost Rs. 2.5 Lakh crore by 2030 in new business areas, clean coal technologies and new mine development projects. NLC India is the first CPSE in the country to achieve solar power generation capacity of more than 1 GW. Till now, Coal/lignite PSUs have planted almost 100 million trees/saplings.
Slew of reform continues
In a more recent step, one time window has been granted to PSUs for surrendering Non-operational coal mines without penalty. Around 16 coal blocks will be freed by Central/state PSUs. Another particularly important reform includes merger of e-auctions and offer of coal through a single e-auction window. 5 types of e-auction windows were merged together. Coal offered has been made transport mode agnostic with default option being through rail mode.
To utilise mined out land that is unsuitable for coal mining we approved the policy for optimal use of land acquired under CBA Act. The policy provides for utilisation of such land for the purpose of development and setting up infrastructure relating to coal and energy. The policy will unlock land for various coal and energy infrastructure development activities that would encourage investment in backward areas of the country. With this recent-most reform, and many more underway, Coal sector is ready to take all challenges coming its way and continue playing the parental role of fulfilling India’s burgeoning energy needs.
As a result of these slew of reforms the coal mining sector stands transformed today. In the last 8 years domestic Coal Production has increased by 37.3% and Domestic Coal Offtake has increased by 43%. Domestic Coal Production has increased from 716 MT in FY21 to 777 MT in FY22, a growth of 8.5%. Coal Production from Captive mines during the same period has increased from 66 MT to 86 MT, a growth of 30%. Domestic Coal Offtake has increased from 691 MT in FY21 to 818 MT in FY22, a growth of 18.4%.
In the 8 years of good under the leadership of Hon’ble PM, India’s Coal sector has seen unprecedented growth and emerged from an eclipse which was cast upon them for far too long. PIB
The writer is Union Minister of Coal, Mines and Parliamentary Affairs