Indian Coal Sector – The Way Forward

1.The status:
The Supreme Court ruled on August 25, 2014, that the coal block allocations, made both through the Screening Committee and the government dispensation routes, were illegal and arbitrary. The consequences of this judgment were ordered by the Hon’ble Supreme Court on September 24, 2014, wherein all allotments, except four coal blocks mentioned in the order, were cancelled. Thus, the journey of captive coal blocks allocation, started in 1993, has come to an end by making a sort of crash landing after 21 years, placing the entire coal sector on the crossroads.

The ruling is likely to cause many far reaching “consequences” for the Indian coal sector in terms of its effect on coal production, on coal supplies to the core/other industries, on the resulting compulsion for coal imports, in particular, and the Indian economy, in general. The apex court’s decision should act as an opportunity for the government to have a full review of the coal sector policy and come up with appropriate coal reforms. Therefore, it is now the time to think, address and find the right way forward to resolve the challenges that have emerged from the cancellation of allotment of coal blocks. The following can be the line of action and “The Way Forward”.

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