Sunday, August 12, 2012

Great News for the Indian Power Sector
The government has decided not to reconstitute the Group of Ministers (GoM) which was formed to evolve a consensus on opening up of coal sector for commercial mining. The group was being headed by former Finance Minister Pranab Mukherjee.
“The Cabinet Secretariat has said that the GoM (constituted to obtain a general agreement on opening of coal sector for commercial mining) is not being reconstituted,” a top official in the Coal Ministry said.

The Cabinet Secretariat had conveyed this to the Coal Ministry almost a fortnight back, the official said.

At present, only PSUs are allowed to undertake mining. Private firms are permitted to extract coal for captive use.

The six-member ministerial panel, formed in 2009, consisted of former Finance Minister Pranab Mukherjee, Coal Minister Sriprakash Jaiswal, Mines Minister Dinsha Patel, Planning Commission Deputy Chairman Montek Singh Ahluwalia among others.

Earlier, Coal Minister Jaiswal had said the government, as part of the energy sector reforms, is trying to evolve a consensus on commercial coal mining to promote development of the sector.

Several meetings of the GoM, to consider re-introduction of a bill to amend the existing Act governing coal mining were postponed earlier. The bill to amend the Act to allow private participation has been pending in Parliament for the last 10 years for want of political consensus amid opposition by trade unions.

The private sector is allowed coal mining for meeting their captive requirements in sectors like power, steel, cement etc.

The need to liberalise the sector was also felt in the wake of widening demand-supply gap of the dry-fuel.

According to government estimates, India faced a supply shortage of 161.5 million tonnes of coal in the last financial year.

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