The Supreme Court’s mass cancellation of coal block licences will cause serious supply disruptions and accentuate the power crisis, and is likely to impact the economy by jeopardising investments in the sector, India Inc said on Wednesday.
“The decision taken by the Supreme Court to cancel all but four coal blocks is likely to adversely impact the domestic coal supplies in the country and will erode investor confidence,” CII President Ajay Shriram said.
Currently, about 42 blocks are producing coal to the tune of 53 million tonnes and account for 10 per cent of the total coal supplied in the country.
“This judgement will lead to serious supply disruptions as mining from these blocks will be hampered, further exacerbating the coal shortages in the country. Any disruption in the coal supplies will accentuate power crisis and force higher imports impacting the current account deficit,” Shriram said.
Terming the Supreme Court’s ruling cancelling 214 coal blocks as “a bit harsh”, Assocham President Rana Kapoor said: “Our main concern is on the kind of negative impact on the economy which has just been showing signs of recovery after over two years of slowdown”.
“Being largely dependent on the thermal power, it is the coal which fires the economic growth, which will be halted, besides, the dependence on coal imports will increase,” he added.
Ficci President Sidharth Birla said: “The cancellation of coal blocks involves significant investments and will obviously impact the economy and investment climate, therefore a quick response from Government will help allay the apprehensions”.