SC cancels licences of 214 coal blocks
SC in a landmark judgement has cancelled 214 coal blocks issued since 1993 to bring in more transparency in the system. The apex court has granted a 6-month window to companies involved in the businesses to wind up their operations. In addition the companies will be required to pay Rs. 295 per tonne of coal they extract and the also for the one which has been already extracted. The verdict has been based on the irregularities with the set procedure which is to be followed in case of auctions. The court has mentioned that the whole process of allocations has been mired in serious corrupt practices as it suffers from the vice of arbitrariness and glaring legal flaws. The bench headed by CJI RM Lodha stated that, “the Screening Committee has never been consistent, it has not been transparent, there is no proper application of mind, it has acted on no material in many cases, relevant factors have seldom been its guiding factors, there was no transparency and guidelines have seldom guided it.”
The Indian industry has however not taken the decision in the right light and has warned with serious implications for Indian economy which operates on coal. It has expressed concerns about the accentuation of the power crisis and the economic slowdown. The dependence on outside coal will increase. The investments in the sector will be badly affected and the key sectors of power, steel and mining will also bear the brunt.
Despite the drastic responses from the industry the judgement has paved way for the next level of reforms and for inviting more private investments and entry of foreign players. It gives a bright opportunity for government to develop a more competitive market.