The Hindu Business Line : ‘Coal regulator could be stumbling block’

This is my initial reaction. I only heard the Finance Minister’s speech. One thing the Finance Minister has very quietly mentioned in the Budget is the proposal to set up a Coal Regulator. He just mentioned it in one sentence. I do not know the details. But it has great implications for the coal industry.

What would be the role of the regulator? Are we going back to the administrative regime? Mr Chidambaram himself has been a great reformer.

I am sure he would have studied it (the role of the regulator), before announcing it.I was associated with the coal sector for drawing up a road map for this industry in India. There have been complaints and objections from various ministries about allocation of coal. We have plenty of coal in this country. But digging it out of the ground is a Herculean task. We need to get so many clearances from different agencies.I am not sure whether the proposed regulator would be the answer to these problems. On the contrary, I think, he could become a stumbling block as far as coal allocation to the consumers is concerned. But there are several positive aspects.

The excise duty cut for the automobile sector will benefit customers, as, I think, the manufactures will immediately pass on the benefit to customers. On the overall proposals, I would say it is a populist Budget. The waiving of the farmers dues may be a good thing from the point of view of the heart. But the question being asked is who is going to pay? Moreover, this will also raise the hope for borrowers in other sectors in the future. In the past also the government had done loan write off for industry.

The hike in the short-term capital gain tax will definitely impact the stock market.

(The author is a Director, Tata Sons Ltd.)

More Stories on : Budget | Coal | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page