Mining is the key source of input for many basic industries like power, steel and aluminium, the Prime Minister said.
New Delhi, June 18:
Prime Minister Narendra Modi on Thursday kicked off a two-stage electronic auction process to allocate coal blocks for commercial mining. The move was part of the government’s “Atmanirbhar Bharat” series of measures to help the country battle the economic fallout from the coronavirus pandemic. The onset of commercial coal mining is a “win-win situation for every stakeholder… The market for coal is now open. It will help all sectors,” PM Modi said. India has taken a “big step today” to become self-reliant in energy, and it will turn the COVID-19 crisis into an opportunity, reducing its dependence on imports, the Prime Minister said. The government will auction 41 coal mines to spur private sector participation and investment in coal.
Here are 10 things to know about this big story:
“India will turn this COVID-19 crisis into an opportunity. It has taught India to be self-reliant. India will reduce its dependence on imports. To make India self-reliant in the energy sector, a major step is being taken today,” Prime Minister Narendra Modi said, while addressing the launch event.
The country has made the big decision of opening up the coal and mining sector to competition, capital, participation and technology, PM Modi said, as the central government launched a two-stage electronic auction process for the allocation of coal mines.
“We are not just launching the auction for commercial coal-mining today, but bringing the coal sector out of decades of lockdown,” he said addressing the launch through video conferencing. He also said the country is still the world’s second-largest importer of coal, despite being the second largest producer of the dry fuel with the world’s fourth-largest reserves.
The auctioning of 41 coal mines is expected to garner Rs 33,000 crore of capital investment in the country over the next 5-7 years. The process is likely to contribute Rs 20,000 crore in revenues annually to state governments.
The PM said that this auction process will result in major revenues to states and create employment besides developing the far-flung areas.
A self-reliant India means the country will reduce its dependence on imports, saving foreign currency worth crores of rupees, he said. “A self-reliant India means India doesn’t have to import, developing its own resources,” the Prime Minister said.
“Maamla to koyle ka hai, par heere ke sapne dekh ke chalna hai (the matter is of coal but the country has dreams of diamonds),” PM Narendra Modi said. Industries will now get new resources and new market for their businesses and investments, PM Modi said at the launch of coal mining auctions.
The rollout of commercial coal mining is expected to boost private sector participation which will in turn lead to higher production, enhance competition. “Allowing private sector in commercial coal mining is unlocking resources of a nation with the world’s fourth-largest reserves,” PM Modi said.
The government announced commercial mining last month to unlock the coal sector fully, with opportunities for investors related to mining, power and clean coal.
That was part of its “Atmanirbhar Bharat” series of monetary and fiscal measures worth Rs 21 lakh crore – equivalent to 10 per cent of GDP – to fight the damage caused by COVID-19 and the weeks-long lockdown. Many economists say that much of this has already been budgeted for by the government and very little includes new spending.