In a move that will put an end to the absurdity of India, with the world’s fourth-largest reserves of coal, importing billions worth of the stuff and domestic economic agents in desperate need of coal bending rules to lay their hands on captive mines, the government has finally opened up the country’s coal mines to commercial mining, without restrictions on end-use, exports, trading, beneficiation or other value addition.
Thermal coal has been in short supply, on account of an inefficient State monopoly that cannot mine the stuff fast enough, and missing transport infrastructure for opening up mines in remote areas. The Railways’ cooperation is being sought to amend the logistical deficit. Another hurdle in the path of mining coal has been environmental clearance, which tosses around between the Centre and the states for months that could stretch into years, before it finally lands in the lap of the would-be miner. That, too, has been streamlined. Coal India and its unions should welcome these reforms, in the national interest, and compete with newcomers. A few more reforms are in order. Environmental clearance should be for a mine and a mining plan, and that should survive any change in ownership, so that a new buyer is not required to chase clearances all over again.
A greater proportion of coal should be beneficiated before shipping, preferably using dry techniques, and domestic R&D must be stepped up in gasifying coal. The path to a low-carbon economy can be paved with coal itself. The green cess on coal should be utilised for these measures that would reduce climate-unfriendly emissions, at least after the desperate scrounging for resources with which to compensate states for GST shortfalls is over. The use of coal cess for GST compensation should be temporary.
This piece appeared as an editorial opinion in the print edition of The Economic Times.
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