The Coal sector of the country, which had went into a limbo since 2012 after the 'coalgate' scam was unearthed, witnessed a sort of a mini rejuvenation in late 2014 after the newly arrived NDA Government decided to begin e-auction of 204 coal blocks which the Supreme Court had cancelled on September 24.
While the auction process for the first batch of 92 blocks has begun and is expected to be completed by March 15, 2015, the Government had to rely on promulgating the ordinance to enable the bidding process more than once as the Coal Mines (Special Provisions) Bill 2014 could not passed in Rajya Sabha.
Till the Supreme Court hurried the Coal Ministry into action, the sector was in deep freeze as the matter related to allocation of coal mines through alleged nomination route was sub judice and the erstwhile UPA Government chose not to allot any blocks till the dust settled on it.
Even as the apex court was hearing the 'coalgate' issue, the lok Sabha elections took place and the NDA regime came to power. The new Coal and Power Minister Piyush Goyal, with his penchant for over enthusiasm, asked Coal India ltd (CIl, the country's largest producer of dry fuel) to achieve 30 per cent productivity within five years, even though the fact remains that with more than 200 of its projects stuck owing to delayed environmental clearances, the Maharatna company currently functions at a rate of 9 per cent productivity annually.
In addition to that, the minister has also said that CIl will aim to reach 1 billion tonnes annual production target by 2019. The fact of the matter is that due to aforementioned reasons, the company presently struggles to complete even its annual targets which hover in the range of 480 million tonnes to 500 million tonnes per annum. The production target for the current fiscal is pegged at 507 million tonnes.
Government's plan of divesting its stake in CIl is also hanging in air owing to doubts raised by global investors as to how the company will achieve the 1 billion tonnes production target by 2019.
Though the Government has prepared an ambitious road map for reforming the coal sector, which also includes expediting the completion of three major railway lines situated in Chhattisgarh, Jharkhand and Odisha, that will help fast track transportation of coal to significant power plants; as well as sourcing around 200-odd rakes for improving off take of coal industry sources pointed out even with these measures, it will take around three to four years to bring coal off take as well as CIl's production on track.
All said and done though, the sector is currently showing some signs of recovery with the core sector industries which consists of eight segments, and of which coal forms an important part, showing a five-month high growth rate of 6.7 per cent in September 2014.
With the NDA Government cautious about the sector owing to all the heat which it has generated in the past more than two years, it initiated the e-auction of cancelled blocks, as the prevailing thinking is that this will ensure greater transparency.
The Government on its part has initiated steps to ensure faster environmental clearances for CIl projects and in this regard, Goyal has held parleys with Environment Minister Prakash Javadekar. He claims that with a majority Government at the Centre, there is greater coordination among ministers, as there are no coalition pressures to be dealt with. How far this coordination and in house bonhomie positively affects the coal sector, will be interesting to note in the new year 2015, which promises to bring some fresh hope for it.'