Planning Commission pitches for privatisation of coal mining

The Planning Commission has pitched for privatisation of coal mining, saying the government should have a consistent policy for energy sector as third-party sale is allowed for petroleum and natural gas in the country.

"The policy for energy sector should be consistent. We have not nationalised petroleum and natural gas. Private sector investment for thirdparty sale is freely allowed in oil and natural gas. Therefore, to my mind, the logic is very clear that it should be allowed (for coal)," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.



"Politically, whether that is feasible or not, that is for the government and political managers to decide. Economically, it is impossible to take any other view," Montek said.

Ahluwalia further added that "petroleum and natural gas are much more valuable resource than coal and these are cleaner and more expensive globally".

"In the present situation, third-party sale of coal is not allowed and coal mines were permitted to be allocated for captive use after the sector was nationalised in 1970s."

The Comptroller and Auditor General of India (CAG) has estimated that the financial impact of the benefit to private allottees of coal mines will be about Rs 1.86 lakh crore.

The government is yet to finalise the new modus operandi of competitive bidding for coal blocks.

CAG, in its report tabled in Parliament, named 25 companies, including Essar Power, Hindalco, Tata Power and Jindal Steel & Power, as the ones that have secured coal blocks in various states.

The auditor is of the opinion that there is a need for strict regulatory and monitoring mechanism to ensure that benefit of cheap coal is passed on to consumers.

With inputs from PTI