Coal mining sector may be opened to private players

According to sources in the ministry, a draft has been circulated for Cabinet approval. It is learnt, it will be presented in the coming session of the Parliament. The decision has been taken in order to lure the much-needed investments that are beyond the availability of public sector Coal India Limited (CIL) and its eight subsidiaries.

As per the existing laws, the public sector has majority control in public sector joint-ventures while the private sector is only allowed to use coal for captive consumption for power plants, cement production to the extent of 100 per cent and 74 per cent, respectively.

When contacted, the Union Minister of State for Coal, N T Shanmugam admitted that an amendment bill has been prepared, but declined to comment on the extent of equity for private parties. He said the fresh norms will definitely pave way for accelerating the pace of investments.

The bill seeks review of the levy structure and rationlisation of taxes in order to make the coal sector more attractive for the private sector and help overcome the anticipated demand-supply gap, the sources said.

Currently, the coal sector in the country is passing through a phase of transition, triggered by the major economic reforms during the last one decade.

In the changed scenario, there is a need to infuse more funds especially in coal mining, coal handling and cleaning and the public sector will not be in a position to meet the fund requirements on a scale needed to achieve the targets of production during 10th and 11th Plans, he added."An overall review of the regulatory framework within which the Indian coal industry operates has also been undertaken leading to further reforms in the near future," he said.

Also, increased infusion of funds in the domestic industry would help in reclamation and restoration of open-cast coal mine sites to resort the land to its original level of use and productivity for purposes of agriculture or forestry.