FICCI lauds Union Cabinet’s approval of Coal Blocks Allocation (Amendment) Rules, 2020

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New Delhi: In a major reform, the Union Cabinet yesterday approved the Coal Blocks Allocation (Amendment) Rules. This decision comes in the backdrop of Finance Minister’s announcement made earlier this week on the slew of reform measures in the coal sector to enhance domestic production, incentivize exploration and attract more investments through unrestricted transfer of mineral concessions.

FICCI lauds the government’s efforts to promote reforms in the coal sector and feels that this measure will give a big push to the auctioning of coal blocks for commercial sale. The government is planning to auction 50 coal blocks in its first phase for commercial mining on revenue sharing basis based on National Coal Index setup by the Ministry of Coal in this regard, after it has removed the entry barrier, which expectedly will also help in attracting investments from Indian and foreign corporate.

This is also a major step towards realizing the government’s target to completely stop coal imports by power plants by 2024. In this endeavor, modern, efficient, sustainable mining with cost effective evacuation will help in transforming the coal sector, creating employment and enabling downstream power and other core industries to become more efficient in serving India’s needs. FICCI also welcomes government’s plans to invest Rs 50,000 crore for coal evacuation infrastructure as several mines are located in areas where transportation otherwise would be a challenge.

At the same, it is also felt that many of the positive aspects of the new regime for coal mining which got notified by the Coal Blocks Allocation (Amendment) Rules, 2020 can be suitably applied to the minerals sectors as well. This includes the provisions related to private participation for exploration, composite licensing, revenue sharing mechanism and no restriction on sale for end use. The provisions like removal of entry barrier for participation in auction of mines and incentivizing production ahead of schedule will potentially attract more private investments. Hence, a single regime for coal and minerals sectors will prospectively maximize the production and revenue.

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