In a major reform in the coal sector since its nationalisation in 1973, the government today allowed private companies to mine the fossil fuel for commercial use, ending the monopoly of state-owned Coal India Ltd.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA) under the Chairmanship of Prime Minister Narendra Modi.
Briefing media after the meeting of the Cabinet in New Delhi, Coal Minister Piyush Goyal said, the opening up of commercial coal mining for the private sector is the most ambitious coal sector reform. Currently, the private sector is allowed coal mining for captive use only.
Mr Goyal said, the reform is likely to bring efficiency into the coal sector by moving away from the era of monopoly to competition and lower power tariffs.
He said the move will lead to higher investments and create lakhs of direct and indirect jobs. He said, apart from increasing competitiveness it will allow the use of best possible technology into the sector.
The CCEA has also approved the methodology for the auction of coal mines or blocks for sale of coal under the Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957.
Piyush Goyal said big, medium as well as small mines would be offered to private companies for mining. He said, opening up the sector will also lead to energy security through assured coal supply, accountable allocation and affordability.
The methodology gives the highest priority to transparency, ease of doing business, and ensuring that natural resources are used for national development.
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