New Delhi, March 21: Parliament has opened up coal mining to Indian and foreign private companies and allowed transparent auction of coal, bauxite and other minerals by passing two game-changing laws that could potentially free private enterprise from decades of socialist controls resulting in billions of dollars of investments by Indian and foreign miners.
Overcoming stiff opposition in the Rajya Sabha, where the ruling party is in a minority, the government displayed deft political management to pass the Coal Mines Special Provisions Bill as well as the Mines & Minerals Development and Regulation (MMDR) Bill. The government obtained the support of regional parties such as Trinamool Congress, Biju Janata Dal and AIADMK by dangling the carrot of revenues which states will receive from the auction of mines, thus overcoming opposition from Congress and the Left. Many states are also eager to see a resumption of mining, which has come to a halt in various parts of the country because of bans imposed by courts.
The new coal law gives the government the power to allow private companies to mine coal and sell it in the open market, ending four decades of state monopoly. So far private companies could mine coal only for use as fuel in their own factories. The government has assured workers of Coal India that the state-run giant's interests will be protected, and that it is not in a hurry to get private firms to start commercial mining operations, but the new law allows it to go ahead whenever it wants.
The Bill passed on Friday essentially amends the nationalisation of coal mining by former prime minister Indira Gandhi in 1973, something alluded to by veteran Congress leader Digvijaya Singh during the debate in the Rajya Sabha.
Friday's developments are likely to boost the morale of industry following as it does recent parliamentary approval of bigger stakes for foreign insurance firms operating in India.
The passage of the two Bills means the Modi government has now managed to obtain Parliament's approval for three of the four reform measures that were implemented through ordinances.
Getting Parliament's nod for the fourth — amendments to the land acquisition Act passed in 2013 — could be a lot tougher as the Opposition has so far united in opposing the changes to the Act passed by the previous UPA government.
Minister for Coal, Power and Renewable Energy Piyush Goyal said commercial mining would be used to augment resources. "After we meet requirements (of end-use plants, public sector units and state governments) we have duty to give coal to Rs 7-8 crore housewives and small-scale industries such as brick kiln and bangle manufacturers who will get coal not from illegal sources but at cheaper rates," he told reporters.