- The right to extract coal bed methane from Coal India's mines will be auctioned
- There will be no qualifying condition for the auction of the block. Only advance payment will be sought
May 16, 2020, 10:34 PM IST
new Delhi. Finance Minister Nirmala Sitharaman on Saturday announced bold reforms in the coal and minerals sector, releasing the fourth batch of the details of the self-sufficient India package announced by Prime Minister Narendra Modi amidst a campaign to save the economy from the Kovid-19 pandemic. He opened up the coal sector to commercial mining. Along with this, the government announced to spend Rs 50,000 crore on infrastructure development of the coal sector.
This announcement by the Finance Minister will end the government's monopoly in the coal sector. This means that now the government will not only decide the use of coal, but the coal producing companies will now be able to produce coal for their benefit as well. Coal generating companies will have to share revenue with the government. Here we will know what reforms have been done in the coal and mineral sector, what will be its benefits and how much will the government spend on it.
India will become self-sufficient in coal sector
The Finance Minister said that India has the third largest coal reserves. Despite this, India imports coal. The Finance Minister said that India will remain self-sufficient in the coal sector and will import as much coal, which cannot be produced in the country.
What will the government do: The competition will increase transparency and ensure private sector participation by the government.
How much will it cost 50,000 crores. Under this, Rs 18,000 crore will be spent on improving the infrastructure to bring coal from the mine to the railway siding.
What happened: Commercial Mining. The government's monopoly ends. Conditions will be easier to enter the sector. Companies will share revenue with the government. Coal gasification and liquification will be encouraged to protect the environment. Coal production will be allowed to increase by 40 percent every year.
What happened: Only captive consumers or end-use consumers could bid for the coal block. Now either party can bid for the coal block and sell coal in the open market.
What will be done: The right to extract coal bed methane from the mines of Coal India will be auctioned.
Conditions for entry into coal business were easy: 50 blocks will be offered immediately. There will be no qualifying condition to auction the block. Only advance payment will be sought. It will also have a limit.
Exploration cum Production System for Partially Explored Blocks: Earlier, fully exploited blocks were auctioned. Now partially exploited blocks will also be auctioned. The private sector will also be allowed to participate in the exploration.
Incentives for faster production: Those producing before the appointed time will get incentive. For this, there will be a rebate in the revenue share.
when it will be done : The Finance Minister did not say how long the reforms would be done.
Seamless Composite Exploration in Minerals
The Finance Minister said that the government will encourage private investment in the mineral sector. Structural reforms will be made to develop the sector and boost employment. State-of-the-art technology will be used. New technology will be tried out especially in exploration activities.
What will be done: Seamless Composite Exploration Low Mining Low Production System. This means that other sectors required for mineral production (captive coal mine for power generation) will also be auctioned simultaneously. For example, bauxite and coal blocks will be auctioned simultaneously. This will enable the aluminum industry to obtain electricity at a lower rate and remain competitive.
500 new blocks will be offered: These blocks will be auctioned in an open and transparent manner.
The difference between captive and non captive mines will be finished: This will enable the transfer of the mining lease and the remaining surplus mineral can be sold.
Index will be made of different minerals: The Ministry of Mining is creating indexes for individual minerals.
Stamp duty will be rationalized: The stamp duty to be paid at the time of allocation of the mining lease will be made reasonable.
How long will it be: The minister did not give any time limit.