Government monopoly on coal mining ends, FM Nirmala Sitharaman heralds new era, announces entry of private sector

Finance Minister Nirmala Sitharaman today announced that the Government of India (GoI) is going to introduce commercial mining in the coal sector and thereby end government monopoly in this sector that has been so far reserved. She said that commercial mining would enable Indian government to raise its mining ability from the existing 60 per cent to higher levels. The Finance Minister also said that commercial mining will be allowed in the coal sector on revenue sharing basis instead of rupee/tonne mechanism. Also, the government will invest Rs 50,000 crore for building evacuation infrastructure.

While presenting the fourth tranche of the Rs 20 lakh crore stimulus package announced by PM Modi, Sitharaman said, "Government of India is going to introduce commercial mining of coal by the private sector, ending government monopoly on the sector.This is being done to reduce import of substitutable coal and increase self-reliance in coal production." She said that the move would enable GoI to increase the level of coal mining in India which is at mere 60 per cent. Initially, nearly 50 blocks will be offered for bidding, she said.

FM Sitharaman will be presenting the 5th and final tranche of the economic relief package on Sunday at 11 AM.

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FM Sitharaman went on to add that Coal gasification and liquefication will be incentivised through rebate in revenue sharing and coal bed methane (CBM) production would also be encouraged. Also, a joint auction of bauxite and coal blocks would be done to enhance the aluminium industry's competitiveness. This, she said, will help the aluminium industry reduce electricity costs.

Sitharaman said that said the distinction between captive and non-captive mines will be removed to allow the transfer of mining leases and sale of surplus unused minerals, leading to better efficiency and production.