Coal Mines (Special Provisions) Bill 2014 Current Affairs - 2020

Project Monitoring Unit launched by Ministry of Coal

The Ministry of Coal recently launched a project monitoring unit to facilitate early operationalization of coal mines that were allocated by the central government. The aim of launching the unit is to bring in more bidders.

Highlights

The Project Monitoring Unit will facilitate Ease of Doing Business as it will support coal mines in receiving timely approval in order to operate the mines. The unit will also help the mines in getting clearances from the state and central government authorities for their operationalization. The unit will help improve business environment and production of coal in the country.

Ease of Doing Business

India ranks 63rd in ease of doing business in the ranking released by World Bank. India was one of the top 10 improvers in the 2019 ranking. The unit will help India improve further and promote international trade as well.

Coal Production in India

India has the fifth largest coal reserves in the world. The major states that produce coal in India are Odisha, Jharkhand, Bihar, West Bengal, Chhattisgarh, Madhya Pradesh and Telangana.

Nationalisation and Denationalisation of Coal Mines

Nationalisation

The Nationalisation of coal mines was done in two phases. The first phase of nationalization was done in 1971 under the Coking Coal Mines (Emergency Provisions) Act, 1971 to manage coking coal mines. The Tata Iron and Steel Company Limited and the Indian Iron and Steel Company limited were nationalized and brought under BCCL (Bharat Coking Coal Limited).

Denationalisation

The Coal Mines were denationalized under the Coal Mines (Special Provisions) Act, 2015. The law allowed the private sector to mine coal.

Ordinance promulgated to amend coal mining laws

On January 11, 2020, the Government of India promulgated ordinance to amend coal mining laws in order to ease auction of coal mines.

Highlights

The GoI has promulgated ordinance to amend MMDR act (Mines and Minerals Development and Regulation act), 1957 and Coal Mines (Special Provisions) act [CMSP], 2015.

Objectives of the amendment

  • It will enhance ease of doing business
  • The amendment will democratize the coal sector. This will open the coal sector for anyone to invest.
  • It will promote FDI (Foreign Direct Investment). The amendment will remove eligibility criteria and restrictions in order to achieve this.

Amendments

  • The amendment has clarified the purpose of allocation. Previously, there was lack of clarity in interpretation of eligibility conditions in the auctions. The amendment clarifies that any company winning the auction shall carry on own consumption, sale or other purposes. This also allows 100% FDI participation
  • The Schedule II and Schedule III of the CMSP act had clauses that allowed only companies that are engaged in specific end use of coal to participate in the auction. These clauses are now removed.
  • So far, the CMSP act had been silent on reallocation of a coal upon terminations of an allocated mine. With the amendment, it is now possible to allocate the mine to the next successful bidder.
  • The amendment allows the coal mines to appoint a custodian for production.

Coal Targets of GoI

India is the second largest importer of coal in the world. The amendments will help to increase domestic production of India. It will also help India achieve its targets set. The GoI plans to increase coal production to 1 billion tonnes by 2024.

For the financial year 2019-20, the target set is 660 million tonnes.