Finance Minister Nirmala Sitharaman on Saturday said the government will bring competition, transparency and participation of private sector in the coal mining sector on a revenue-sharing basis, ending government monopoly on the sector.
Earlier, only captive consumers with end-to-end ownership could bid for the coal mines. Now anyone can bid and sell the produce in the open market on commercial terms.
“Coal is a government monopoly. That government monopoly is being removed,” the minister said.
While presenting her fourth tranche of the 20 lakh crore economic package, she said commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne.
Stating that nearly 50 blocks will be offered immediately, Sitharaman said there would be no eligibility conditions apart from upfront payment with a ceiling.
This is being done to reduce import of substitutable coal and increase self-reliance in coal production.
Also, against the earlier provision of auction of fully explored coal blocks, now even partially explored blocks could be auctioned. Production, earlier than scheduled, will be incentivised through rebate in the revenue share. The Rs 50,000 crore infrastructure development will be carried out for it. This will help Coal India (CIL) raise production from 600 million tonnes to 1 billion tonnes by 2023-24.
Coal gasification and liquefication will be incentivised through rebate in revenue sharing, she said adding coal bed methane (CBM) production would also be encouraged.
Sitharaman’s today announced focused on structural reforms in structural reforms in coal, minerals, defence production, civil aviation sector, power distribution companies in Union Territories, space sector and atomic energy sector.
Earlier on late Tuesday evening, Prime Minister Narendra Modi announced a cumulative package of Rs 20 lakh crore, nearly 10 per cent of GDP, to provide relief to various segments of the economy battered by the nationwide lockdown in the wake of the coronavirus pandemic.