Skip to main content

GoI policy cripples economy, imposes undue burden on states to import coal: PCPSPS

Counterview Desk 

The Peoples’ Commission on Public Sector and Public Services (PCPSPS), a non-profit that includes academics, jurists, erstwhile administrators, trade unionists and social activists, has taken strong exception to the Government of India (GoI) “giving away Coal India’s greenfield blocks to private companies”, and failing in its responsibility of “supervision of private mines to ensure that they fulfil their obligations.”
Citing its report Privatisation: An Affront to the Indian Constitution, it said, withdrawal of reserves of Coal India Ltd to the tune of ₨ 35,000 crore has stagnated coal production at around 600 mt during 2018-19, 2019-20 and 2020-21. This, it added, demands “independent enquiry” into the coal crisis that that has “enveloped the country during the summer of 2022 and is likely to extend into the monsoon”.
Stating that this crisis has crippled the economy, PCPSPS wonders why Government of India has has now “unilaterally directed states to import coal without caring to take into account the technical implications of using imported coal in power plants.”

Text:

In order to bring out the actual reasons for the colossal failure of the Coal and Power system management and enable corrective action, an independent enquiry should be constituted into the coal crisis that occurred once during 2021, has enveloped the country during the summer of 2022 and is likely to extend into the monsoon. This continuing crisis has crippled the economy and caused enormous economic losses, in addition to imposing an undue burden on the already indebted State power utilities. The terms of reference should be so framed as to make public the details regarding the issues raised below:

Mismanagement of Coal India by the Govt. of India

1. Withdrawal of reserves of Coal India Ltd to the tune of ₨. 35000 crores. These reserves were accumulated in order to develop new coal mines and augment existing mines. The development programme had to be abandoned.
2. The primary role of the CIL should be not only to be the main producer of coal on scientific lines but also as the premier explorer and developer of new coal inventories. By indiscriminately auctioning CIL’s coal blocks to less competent private promoters, the Centre has curtailed this role to hurt the overall public interest.
3. Directives to Coal India Ltd to invest in the fertilizer industry, thereby neglecting its primary function of meeting coal demand.
4. Non-appointment or delayed appointment of key executives such as CMD CIL for several years. Deputation of coal mines managers and executives to "Swatch Bharat" assignment, thereby directly slowing down the development of coal mines.
5. The Centre is expected to anticipate electricity/ coal demand, plan for it, arrange the logistics and ensure that the country is self-reliant in coal supplies. The concerned institutions are under the oversight of the Centre. In discharging this responsibility, the Centre has apparently failed, which has thrown the country into an unprecedented coal crisis.
As a consequence of the above, Coal India production was stagnant at around 600 mt during 2018-19, 2019-20 and 2020-21. If the funds and manpower had not been diverted, production could have grown at 11 percent, as it was growing in 2015-16, and Coal India would be producing anywhere between 750 and 800 mt.

Policies formulated to directly benefit private interests

In the past, when the State power utilities had to import coal, some private Indian companies owning overseas coal mines supplied coal and had over invoiced the same to profiteer at the cost of the utilities. The Enforcement Directorate and other investigating agencies have undertaken investigations against these entities.
There have been enormous delays in investigating Show Cause notices issued by the Directorate of Revenue Intelligence (DRI) to the tune of about Rs. 30,000 Crores. The recent Supreme Court order, staying the Bombay High Court order quashing all letters issued by DRI seeking information about alleged Rs.29,000 Crores over-invoicing by a corporate group exercising enormous influence with the government of the day in connection with imports from Indonesia, leaves no scope for further delay.

Orders for import of Coal to benefit vested interest

Possible correlation between market transactions and import orders issued by the Ministry of Power, Govt. of India:
1) India’s April import of Coal was 15.92 million tonnes, down from March when the import was 21.79 million tonnes.
2) Bloomberg has reported on May 19, 2022 that the bullishness in coal prices helped flagship firm Adani Enterprises Ltd. clock a 30 percent jump in profit for the three months ending March – the highest in six quarters.
3) Govt. of India giving away Coal India’s greenfield blocks to private companies, it has also failed in its responsibility of supervision of private mines to ensure that they fulfil their obligations.

Policy response of the Govt. of India

Having created a crisis, the Government of India has unilaterally directed States to import coal without caring to take into account the technical implications of using imported coal in power plants. Burning different coals without proper blending could damage the boiler and reduce its useful life. Most power plants do not have the necessary facilities for proper and scientific blending of coal within the station compound. Compounding the States’ problems of importing coal at astronomical prices, the Centre has invoked its extraordinary powers under the Electricity Act.
The Government of India has
1. imposed a minimum percentage of 10% of imported coal by the States, and if there are shortfalls, penalize the States with corresponding cuts in domestic coal supplies
2. allowed the IPPs to import coal and pass on the full coal import cost to the State utilities in deviation of the terms of the existing PPAs, though earlier it is the Centre that took umbrage at the States trying to renegotiate regressive PPAs signed with the IPPs in the past, thus overturning its own earlier diktat to suit the interests of the IPP promoters
3. made no attempt to either cap the import price or use its own bargaining power to beat them down to a reasonable level of prices. This is very critical in view of the fact that the private overseas coal suppliers, many of whom are also domestic companies in India, have quoted prices far in excess of the cost of production to earn windfall profits at the cost of the States.

Minimum provisions required for import of Coal

The Government of India regulates the ports. Since all the instruments of policy are vested with the Government of India, it has the sole responsibility of import of coal. Independent import by several state governments from the same vendors will reduce the bargaining capacity of the various states and escalate the cost of coal.
The procurement of imported coal should be centralized. It should be monitored and controlled by the Government of India. Centralization of coal is necessary because the Government of India alone has both the bargaining capacity as well as the administrative ability, through its embassies and various other instruments, to obtain the best terms and prices for the whole nation.
The Government of India should ensure that the imported coal is properly blended and sell the blended coal through Coal India. The price of the blended coal should be based on the same principles and basis as the pricing of the Indian coal.
A balance should be struck between the possibility of load shedding and pushing the financial condition of state GENCOs and DISCOMS to precarious conditions. The present policy would only weaken DISCOMs' finances and benefit private companies supplying coal from overseas mines

Compensation to be paid to the States:

The responsibility for the coal crisis rests squarely on the Centre, and it should own it without any hesitation. Forcing the States to import coal has encouraged the overseas coal suppliers to quote astronomical prices, implying that they would benefit by earning windfall profits at the cost of the States.
According to some estimates, coal imports would cost Punjab about Rs 800 Crores and Haryana, Rs 1200 Crores. According to a rough estimate, the total additional cost burden on the States on account of this would be in excess of Rs 24,000 crores. The Centre should immediately compensate the States for this, with the specific condition that the amount would be used for meeting the additional cost of coal imports. If the coal crisis is likely to continue, the amount of compensation thus due to the States would be correspondingly higher.

Comments

TRENDING

Defeat of martial law: Has the decisive moment for change come in South Korea?

By Steven Lee  Late at night on December 3, soldiers stormed into South Korea’s National Assembly in armored vehicles and combat helicopters. Assembly staff desperately blocked their assault with fire extinguishers and barricades. South Korea’s President Yoon Suk Yeol had just declared martial law to “ eliminate ‘anti-state’ forces .”

70,000 migrants, sold on Canadian dream, face uncertain future: Canada reinvents the xenophobic wheel

By Saurav Sarkar*  Bikram Singh is running out of time on his post-study work visa in Canada. Singh is one of about 70,000 migrants who were sold on the Canadian dream of eventually making the country their home but now face an uncertain future with their work permits set to expire by December 2024. They came from places like India, China, and the Philippines, and sold their land and belongings in their home countries, took out loans, or made other enormous commitments to get themselves to Canada.

A groundbreaking non-violent approach: Maharishi’s invincible defense technology

By MajGen (R) Kulwant Singh, Col (R) SP Bakshi, Col (R) Jitendra Jung Karki, LtCol (R) Gunter Chassé & Dr David Leffler*  In today’s turbulent world, achieving lasting peace and ensuring national security are more urgent than ever. Traditional defense methods focus on advanced weapons, military strategies, and tactics, but a groundbreaking approach offers a new non-violent and holistic solution: Maharishi’s Invincible Defense Technology (IDT). 

This Indian British Marxist blamed USSR's collapse in 1991 on Khrushchev's 'revisionism'

By Harsh Thakor*  Harpal Singh Brar, British Indian Marxist scholar and communist leader, has passed away in Chandigarh. He was 85. He was a lifelong supporter of socialism, Marxism, and the working class. He will be remembered among British Communists.

Chalapathi's death in encounter suggests Maoists' inability to establish broader mass support

By Harsh Thakor* The Maoist movement experienced a significant loss during the Ramagudem encounter on January 21, with the death of Chalapathi (Pratap), a Central Committee member of the CPI (Maoist). His death, along with 15 others, marks a major setback for the movement. Reports suggest that his location was revealed to security forces through a selfie with his wife.

Why do we mostly resist and refrain from communicating on sanitation topic?

By Nikhil Kumar, Mansee Bal Bhargava* According to UN SDG Progress report (2022), at the present moment no targets for SDG 6 are expected to be met by 2030. In 2022, 2.2 billion people had no access to safe drinking water and 3.5 million lacked safe sanitation. Approximately 50% of the world’s population was reported to have been under resourced in enough water for part of the year and a quarter of that population was living under “extremely high” water stress. Add to it, droughts have affected over 1.4 billion people between 2002 and 2021.

Govt of India asked to work for release of 217 Indian fishermen detained in Pakistan since 2021

By A Representative  Members of the fishing communities from Gujarat and Diu, Union Territory, held a press conference in Ahmedabad, urging the Union Government to take proactive measures to secure the release of Indian fishermen currently detained in Pakistan. Presently, 217 Indian fishermen, mostly from Gujarat and Diu, are held in Pakistan’s Malir Jail. Of these, 53 have been incarcerated since 2021 and 130 since 2022.

34 Dalit families in IIT Kanpur without toilets in Open Defecation Free India

By Sandeep Pandey   When Indian Institute of Technology at Kanpur was set up in 1959, two villages were uprooted. The farmers were given meagre compensation for the standing crop. No compensation was given for the land to build this institute of national importance. Each family was promised a job but what was not told to them was that one would require specialised skills to get a job at IIT. Some members of these families were, of course, absorbed for menial work. Some washerfolk families were also invited from outside to live on campus to take care of the laundry needs of students, staff and faculty members. One of these men was cajoled by IIT authorities then to forego a regular employment at IIT and instead take up clothes washing work.

अल्पसंख्यक कार्य मंत्रालय का बजट निराशाजनक: 19.3% अल्पसंख्यकों के लिए मात्र 0.0661% ठोस आवंटन

- मुजाहिद नफ़ीस*   1-2-2025 को भारत सरकार द्वारा संसद में वर्ष 2025-26 का बजट वित्त मंत्री निर्मला सीतारमण जी ने पेश किया| इस वर्ष का बजट 5065345 करोड़ है जो कि पिछले साल के संशोधित अनुमान से लगभग 7.39% की बढ़ोतरी हुई है| वहीं अल्पसंख्यक कार्य मंत्रालय का बजट मात्र 3350.00 करोड़ है जो कि कुल बजट का 0.0661% लगभग है|  पिछले साल 2024-25 में 3183.24 करोड़ था|

जाति-व्यवस्था, पितृ सत्ता, धार्मिक अंधविश्वास, पाखंड, लैंगिक असमानता, छुआछूत, सामाजिक भेदभाव पर पेरियार के तार्किक विचार

- जर्नादन रविदास   प्रमोद रंजन द्वारा संपादित पुस्तक ‘जाति-व्यवस्था और पितृसत्ता’ भारत का सुकरात कहे जाने वाले ई. वी. रामास्वामी पेरियार के इस विषय पर केंद्रित लेखों और भाषणों का संग्रह है। इस पुस्तक में हम पेरियार के बहुत ही तार्किक विचारों को पाते हैं। मसलन, पेरियार का कहना है कि “मैं विवाह या शादी जैसे शब्दों से सहमत नहीं हूं। मैं इसे केवल जीवन में साहचर्य के लिए एक अनुबंध मानता हूं।” इसी तरह वे कहते हैं कि “जो आदमी ईश्वर और धर्म में विश्वास रखता है, वह आजादी हासिल करने की कभी उम्मीद नहीं कर सकता।”