India: Plan panel suggests denationalising coaladmin
In a move likely to stir vehement opposition from Left parties, the planning commission has made a strong pitch for denationalising the coal sector in what could turn the clock back to the seventies.
Pressing the case for private investment in the coal sector ”” which is the exclusive domain of state-owned Coal India and its subsidiaries, Neyveli Lignite and Singraeni Colliery ”” the panel said: “If petroleum, which is much scarcer than coal, is open to private sector, there is no reason why coal should not be opened up, especially if we take a long-term view of energy constraints and the need to absorb new clean technologies.”
Coal production in private sector is allowed for captive mining by power, steel and cement firms ”” which often complain of bureaucratic interference to protect PSU interests.
The commission’s push for denationalisation, expressed in a report on the energy sector, has come amid the expectation of a spurt in coal demand in the coming years as higher growth is likely to translate into more investment in coal consuming sectors.
According to its estimates, in addition to coking coal, India may need to import 40-50 million tonnes of superior grade thermal coal by March 2012.
The plan panel has also recommended changes to the coal pricing and marketing system through greater use of e-auction, introduced recently, since the mode is likely to nudge consumers towards more rational pricing. Also, price of coal is proposed to be based on gross caloric value instead of useful heat value.
Pending decision on disinvestment, it said, efforts should be made to expand coal production through captive mines.