Effect of Privatisation of Coal Mining Sector

India is undergoing rapid development for last few decades, this is due to industrialisation. Production and marketing opportunities getting bestowed on the nation due to industries, supports significantly to the constantly growing GDP. Huge amount of energy is consumed in the industrial processes and lot of other places as well. In order to meet these demands coal comes into the picture as a widely used source of energy.

Coal sector got nationalised in 1973, this policy had its share of downsides with which nation had to struggle for almost five decades. One major drawback was the need to import coal from outside to fulfil the requirement by spending lot of money. We have world’s largest reserves of coal in India, so if our own resources were utilised properly in the first place then it would have been a needless expenditure and put to use elsewhere for betterment of the country. In 2018-19, 25% of our total coal demand was imported at a cost of Rs 1.7 lakh crore, we have not got so progressive yet that this much money can be easily spent. It bears lot of pressure on us. 

Scenario After Privatisation

After privatisation, companies with competing spirits got to enter the field. They taking the job gives a promise of improvement in quality due to the competition with each other and exploration of potential coal bearing areas is sure to increase. It makes the way to cut down on the import bill significantly if not completely.

The boost in economy of the state and employment opportunities for the locals, especially those of tribal communities will be benefitted and uplifted. There had been few instances where company co-existed with locals and got them on their side with peace without disrupting their culture. Coal mining makes a region an economical zone. In order to transfer what got mined over distances, railway lines get laid and road network gets improved. All in all, the transportation gets better. To be able to connect well with other big cities in the form of transportation is also big step towards path of development for a backward place. Along with transportation, electricity supply will also get improved in the region because latest technologies at work will demand lot of power supply to mine coal or for the gasification process. After achieving good infrastructure, transportation to other cities and constant power supply in form of electricity, what comes next is the IT industries. Yes, all the development in state in the whole process will lure information-technology based industries to setup. More industries also means further increase in employment. Both skilled and unskilled labour will get opportunity to be employed.

Since the coal sector got privatised, it will bring in large investments both locally and globally. It is because this sector allows 100% Foreign Direct Investment, which let someone own a business somewhere from another country. These investments will be significant addition to state’s GDP.

So far we listed a number of benefits of privatisation of coal mining. However, the most important reason for which government changed the five decades old policy last year, is the fall of economy due to covid19. Lot of people in rural areas, the unskilled labour had lost their jobs in pandemic. It is a good way to create opportunities for so many people at much faster rate as compared to any other. Prime Minister Modi auctioned 41 coal mines to private companies after decision was made last year. He told the aim is to make India self-reliant and develop central and eastern parts of nation.  

CO2 emissions in India in the year 2019 was estimated to be 1.9 ton per capita. It is half of the average of the world. This fact is here to relieve those with environmental concerns, with the right groundwork done coal mining can progress while still caring for the environment.

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Submitted by Suryaansh Nanda