State run and private firms to invest around Rs4 trillion in India’ coal sector: Amit Shah2 min read . Updated: 11 Jan 2021, 11:27 PM IST
The Union home minister said the coal sector will be largest contributor to India’s $5 tn economy target
NEW DELHI : State-run and private firms are expected to invest around ₹4 trillion in India’s coal sector this decade, Union home minister Amit Shah said on Monday. Of this, public sector undertakings (PSUs) will invest ₹2.5 trillion, in areas such as surface coal gasification, coal bed methane, new coal mining plans, and clean coal projects, Shah said.
“The roadmap is ready," Shah said at the launch of ‘single window clearance portal’ for all approvals required for starting a coal mine in India and the coal mine development signing agreements of 19 mines awarded in the first tranche of commercial coal mining auction.
Around 19 major approvals or clearances such as mining plan and mine closure plan, grant of mining lease, environment and forest clearances, wildlife clearance, clearances related to safety, environment, rehabilitation of project affected families and workers’ welfare among others are required before starting a coal mine in the country.
“More reforms are in the pipeline," Shah added. India has offered 116 coal mines for auction in the last 10 tranches. A total of 19 coal mines spread across Madhya Pradesh, Jharkhand, Odisha, Chhattisgarh and Maharashtra were auctioned in the country’s first commercial coal mine auction, with the winning bids quoting a 27% average revenue share or premium over and above the floor price. The highest premium bid was of 66.75%.
Speaking at the same event, Union coal minister Pralhad Joshi said the next tranche of commercial coal mining auction will be launched this month.
“Commercial coal mining has been made a part of the system now and will be conducted regularly. The next tranche of commercial mining auction would be launched in January 2021 and further tranches will continue thereafter," Joshi said.
India’s first commercial coal mine auctions began on 2 November. As part of the two-stage auction process, a bidder has to quote the percentage revenue share over the reserve price. There is no restriction on the sale and utilization of coal from these mines. Earlier, blocks were allocated to companies on the payment of fixed amounts per tonne.
While urging firms to expedite their mining operations, Shah said the coal sector will be the largest contributor to India’s $5 trillion economy target.
The National Democratic Alliance government has set an ambitious task of turning India into a $5 trillion economy by 2024-25. India is trying to revive economic activities on the backdrop of its economy slated for the sharpest annual contraction on record. The economy is projected to contract by a record 7.7% in the year ending 31 March, the first time in more than four decades, according to the National Statistical Office.
Shah added that India shall try to harness its coal reserves quickly, within the next three decades in the backdrop of rapid progress made by renewable energy sources. A case in point being domestic solar power tariffs that have hit a record low of ₹1.99 per unit, and are expected to fall even further.
“At the rate at which renewable energy sources have come, I am of the opinion that as soon as we are able to get the coal out and convert it into electricity, it will be beneficial to our country and economy," Shah said.