Coal mine auctions: Windfall revenue gains to States look like a pipeline dream

Twesh Mishra New Delhi | Updated on December 03, 2019

The projections of windfall revenue gains for state governments after the auction of coal mines are turning out to be a pipe dream.

According to data shared by the Ministry of Coal, the revenue to Odisha from auctioned coal mines declined annually from 2015-2016 to nil in 2018-2019 and remained nil in the current year, till now. Cumulatively since 2014-2015, when the auctions were conducted, to 2019-2020, the State received just ₹51.57 crore. This amount pales against the ₹45,630 crore that was promised to the State over 30 years, the expected life cycle of the coal mines. The only coal mine in Odisha that started operations also closed down while the rest are yet to get clearances.

There is also a lot of variation in the annual revenues accrued to States. In 2015-2016, Jharkhand received ₹133.72 crore as revenue from the auctioned coal mines. In 2016-2017, this amount fell to ₹18.63 crore. The following year, revenues from these mines zoomed to ₹266.71 crore but fell to to ₹195.23 crore in 2018-2019.

It is evident that ₹1,96,698 crore estimated revenue during the life time of the auctioned mines to the coal producing States will not be a reality. This could be because some of the auctioned mines could not start production and were relinquished. Out of the 31 coal blocks which were auctioned, Coal Mine Development and Production Agreements (CMDPA) of 6 coal mines have been terminated.

Published on December 03, 2019

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