The coal minister of India Mr. Piyush Goyal announced the allocation of 27 more mines to private sectors on 30 July. Among them, 13 will be used for end-use steel and iron, cement power plant, 6 mines for self-power consumption, 6 for the production of steel and iron and the last 2 for state government company.
The important announcement made by the Union cabinet regarding the coal sector and its production are welcomed by bigwigs in coal industry but also home grown enterprises entrepreneur Mr. Padmesh Gupta. The Cabinet made the decision back in the month of February this year to open up commercial coal mining to both Indian and foreign private companies. This move of the government is highly appreciated. This is the most ambitious reform of the coal sector of India since its nationalization in the year 1973 says the government.
India is dependent upon coal for around 70% of its power generation but the mining process is slow and inefficient. Therefore the Government decided to organize an auction on a transparent platform where different private companies will be able to bid for the tender. The Bidding parameter will be based on the price per ton of coal which the company will offer to the state government.
The company will also be able to sell or utilize the coal from mining at its own pleasure. There will be absolutely no restriction on the utilization or sale of the coal. This will benefit both the company as well as the government. The reform will change the era of monopoly to the era of competition which will bring much more efficiency in the coal sector and its production.
This move will also allow the use of the best possible technology in the mining process as a result of high competition. It will surely increase the mining efficiency.
The coal-bearing state will also be highly benefited as all the produced revenue from the auctions will be given to it which can be further utilized for its growth and development.
The entrepreneur of Nagpur based Gupta Coals Mr. Padmesh Gupta welcomed this reform with open arms. The policy or reform will benefit all small and medium enterprises say, Padmesh Gupta. Congress government kept the mining process in their own hands since nationalization but privatization is absolutely necessary for the coal sector due to the lack of use of advanced technology in the coal mining and scrawny recovery rates, he added.
Mr. Padmesh Gupta backed the decision taken by PM Modi as the Home Grown Mining representative.