New Delhi (Sputnik) — The Indian government has allowed private sector firms, including those of foreign origin, to mine and sell coal blocks at a market-determined price — a major decision that ends the state's monopoly over coal resources.
The approved methodology for auctioning coal mines to private companies will allow the energy-starved country to cut imports and boost local coal production. State-owned Coal India has been the sole commercial miner for 41 years with a market share of 80 percent.
"The government has taken several measures in the coal sector, which will enhance competition in the system, bring efficiency in coal production, reduce coal import, save foreign exchange, and generate job opportunities for the people," Piyush Goyal, India's minister of railways and coal said after the decision.
With the latest initiative, the government expects higher investment that will generate direct and indirect employment in coal bearing areas especially in the mining sector and will have an impact on economic development of these regions.
"The quality of coal would improve and imports would come down. We want India to be self-sufficient in coal. The move aims to improve ease of doing business in India," Goyal added.
At present, India is heavily dependent on thermal power (70% of total generation) for electrification of the vast country.
"This reform will ensure assured coal supply, accountable allocation of coal and affordable coal leading to affordable power prices for consumers," the coal ministry statement said.