Q. Consider the following statements : - Coal sector was nationalized by the Government of India under Indira Gandhi.
- Now, coal blocks are allocated on lottery basis.
- Till recently, India imported coal to meet the shortages of domestic supply, but now India is selfsufficient in coal production.
Which of the statements given above is/are correct? (UPSC Prelims 2019)
Answer:
1 only
Notes: The correct answer is
[A] 1 only. This question covers the historical evolution and current regulatory framework of the coal sector in India.
- Statement 1 (Correct): The coal sector was nationalized in two phases under the Prime Ministership of Indira Gandhi. The Coking Coal Mines (Nationalisation) Act was passed in 1972, and the Non-Coking Coal Mines (Nationalisation) Act followed in 1973. This was done to ensure scientific mining and social welfare for miners.
- Statement 2 (Incorrect): Coal blocks are not allocated on a lottery basis. Following the Supreme Court's 2014 judgment cancelling 204 coal blocks, the government shifted to a transparent e-auction process under the Coal Mines (Special Provisions) Act, 2015. In 2020, the government further opened the sector to commercial mining via competitive bidding.
- Statement 3 (Incorrect): India is not self-sufficient in coal production. While India has one of the world's largest coal reserves and has seen record-breaking domestic production recently, it remains one of the largest importers of coal globally. This is due to the high demand for coking coal (used in steel making), which is scarce in India, and the need for high-calorific value thermal coal for certain power plants.
Historically, Coal India Limited (CIL) held a near-monopoly after nationalization, but recent reforms have allowed private players to enter the market to reduce the import burden and modernize mining technology.