The Coal Threat


Narendra Modi-led NDA government is likely to face its first in a series of serious test on governance, over the next few days. An acute power crisis with no immediate solution is staring at our country as thermal plants are sitting with very less inventory of coal. Recently, a Supreme Court declared that the licenses for more than 200 coal blocks awarded since 1993 (to 2010) as illegal. Although, the final verdict is to be delivered on September 26, the coal shortage is already causing panic in the industrial circles.

The world’s largest coal miner on basis of output, Coal India, is facing the threat of strike action and there are also fresh fears regarding fuel shortages for India’s financially strapped power sector. The strike action might also dent production in the private sector power generators such as Adani Power and Tata Power, which rely on coal provided by Coal India. This might result in loss of substantial power generation in the states in Punjab, West Bengal and Karnataka.


Meanwhile, Power and Coal Minister Piyush Goyal said that the new government has actually produced 22 percent more electricity and is on track to provide 24×7 electricity. As a minister, he blamed the policies of previous government, mainly for its domestic production and not meeting the power plant requirements. He faulted the crisis on cost overruns at power projects and 3 trillion rupees ($50 billion) at state power distributors.

The government hasn’t yet devised a plan import coal or to deal with shortages. Coal India Limited (CIL), which accounts for 80 percent of national level production, has warned that there will be a fall of at least 30 million tonnes that is to be supplied to power generators. The higher cost of imported coal might have kept away power plants to opt the import solution, but the government needs to facilitate some emergency mechanism to manage the looming power crisis.


The Supreme Court’s decision declaration of ‘coal scam’ is a very significant decision. Over the past few years, Indians are shocked to various types of multi-million dollar scams on land, gas, water, spectrum, coal, and even on stamp papers. Theoretically India’s natural resources belong to its citizens and in turn to its government. However, the ownership of resources has become ambiguous with all these biddings, where corporate companies are there are usurp the resources for money. The governments, through leases, allowed these giant companies to exploit the country’s resources for the greater good for people. But, governments of the past became partners with companies and ran the enterprises as if they were owners of those land and resources.

The Supreme Court’s cancellation of coal blocks is welcoming one in this manner, since it is a chance for government to start afresh. It is chance to push away the corporate agenda and to prioritize the interests of our nation and its citizens. The corporate media and lawyers might say that the declaration is a judicial overreach, but this is a great opportunity to clean up the energy sector. However, the main question lies in how the government is going to take over from here. They need to make some hard decisions to ensure a long-term resolution for these torrid scams.


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