Finance Minister Nirmala Sitharaman today ended the government’s monopoly on coal by allowing commercial mining to introduce competition, transparency, and private sector participation through a revenue-sharing mechanism in the coal sector. In the fourth tranche of the announcement under the Atma-Nirbhar Bharat mission, FM Sitharaman removed the regime of fixed rupee/tonne pricing of coal. The Finance Minister added that the economy will benefit from the opening up of the coal sector. The Union Cabinet had already approved auction for coal mines in the country for commercial mining in February 2018.
Earlier only captive consumers with end-use ownership could bid for coal blocks. Now, any party can bid for it and sell in the open market, with liberalisation of entry norms. Nirmala Sitharaman has also offered to immediately auction nearly 50 blocks. The move will help India’s economy with a cut in the country’s import bill, CARE Ratings said. Further, today’s liberalisation will also help coal prices become more market-oriented, which would lead to an increase in supplies, it added. “Investment should increase.”
