Plan panel for infrastructure status for coal

The Planning Commission has put forward a slew of proposals to kickstart reforms in the coal sector. Under the proposals, the Commission has...

The Planning Commission has put forward a slew of proposals to kickstart reforms in the coal sector. Under the proposals, the Commission has recommended that the coal sector be accorded infrastructure status and that the Mines Regulation Act be amended, which would allow coal blocks to be allocated to private parties.

Added to these measures, the Commission in the mid-term review of the Tenth Five Year Plan has also suggested that pending the amendment to the Coal Nationalisation Act, the government should encourage private sector participation in captive coal mining. The Commission has also suggested that the present holding company structure of Coal India Limited CIL should be done away with and individual companies under CIL should be made to compete with each other to bring in more efficiency in the sector.

It needs to be mentioned that reforms in the coal sector had been put on the back burner for over five years on account of pressure from the trade unions. PM Manmohan Singh, who also holds the coal portfolio, is to hold discussions with trade unions on this matter.

The panel has also suggested that coal should not be treated as an essential commodity and the pricing of coal should be linked to the gross calorific value GCV of the coal that is being supplied. The latter is an important suggestion as it could result in savings for power companies that source almost 300 million tonnes mt of coal annually from CIL.

Currently, CIL is unable match the rise in demand for coal as a result of which power utilities have started importing coal. Though the present imports are in the five mt range, the Commission has recommended that the Japanese model should be adopted and that plans need to made to import up to 50 mt of coal by the turn of this decade either through MMTC or through other entities. The panel has recommended that India should also explore the option of picking up coal equity to balance the long-term needs for coal in the country.