The state monopoly in coal has been extremely inefficient and country is forced to import hundreds of millions of coal every year. To what extent, Commercial Coal Mining can be helpful towards this? Discuss elucidating current government policy towards commercial coal mining.
Coal mining has been the monopoly of Coal India Limited, ever since 1973 when coal blocks were nationalized. However, due to inefficiency in mining, the large amount of coal is imported every year.
There in order to speed up the domestic coal production, the government has decided to open up coal mining to private players. Presently government has identified ten coal blocks in four states for commercial mining. However, no timeline has been set for the auction.
Entry of private players will lead to economies of scale and therefore will be good for national interest. Apart from that, the private coal mining will generate additional revenues for the coal-bearing states.
However, merely entry of private players will not resolve all issues. Apart from that India to boost thermal efficiency and mandate ultra-supercritical and advanced ultra-supercritical boiler technology. Simultaneously India should focus on clean coal technologies, for better systemic integration with renewable energy.
India faces supply constraints due to inefficiency issues, opening the sector for private players will lead to efficient mining. Since Unions are hostile to such move, the government should frame modern safety codes along with the scheme for enforcement in order to bring unions on board. The commercial coal mining will entirely transform the structure of coal industry in India.
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