Macro Economy

Speed up the revamp of Coal India

Our Bureau New Delhi | Updated on November 25, 2017

The Economic Survey 2013-14 has recommended that the Government should take up the restructuring of Coal India immediately, despite Minister of State Power, Coal and New and Renewable Energy Piyush Goyal holding a contrarian view.

“The TL Shankar Committee on Road Map for Coal Sector Reforms had recommended restructuring of Coal India Ltd (CIL) during the Twelfth Plan. This process needs to be pushed through swiftly,” the Survey stated, highlighting that CIL is essentially a holding company with seven wholly-owned subsidiaries and one mine planning and consultancy company.

The Survey’s recommendation on CIL, which is regarded as an indicator to the Government’s policy direction, is in complete contrast to the Coal Minister views.

“All options are open to us but a cosmetic restructuring of Coal India can’t help resolve the problems of coal supply and quality,” Goyal had said.

Increasing coal production to augment supply to power plants has been identified as a key challenge in the Economic Survey. Some of the measures suggested in the Survey have been already been addressed by the Government.

On Tuesday, Railways Minister DV Sadananda Gowda approved the setting up of three key railway lines to improve coal linkage with power plants.

Private sector role

The Survey also recommends permitting commercial coal mining by the private sector. Goyal had told Business Line last month that the mechanism for such a move was being worked out.

Meanwhile, specifically for the power sector the Survey recommends strengthening of governing standards of power distribution utilities (discoms), rationalising tariff structure and optimising procurement cost of power.

“The power sector cannot deliver its social commitments unless it is commercially and financially viable,” the Survey stated.

Published on July 09, 2014

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