The government opening coal mining for the private sector would ensure better availability of coal and attract foreign investment in the sector, industry experts said on Saturday.
Finance Minister Nirmala Sitharaman in her fourth tranche of the economic package announced that commercial mining will be done on revenue sharing mechanism instead of the regime of fixed rupee/tonne.
"Commercial mining of coal on a revenue-sharing basis would help more coal availability at market prices. So this will be far more efficient...Liberalised entry to allow people to participate for a range of coal blocks and those who produce well before the deadlines incentive would also be given," the finance minister said.
Welcoming the announcement Arvind Sharma, Partner, Shardul Amarchand Mangaldas said that the "government had recently permitted 100 per cent FDI in commercial coal mining and, pursuant to the recent announcement, I understand be that the auction process for commercial coal mining is to be kickstarted.
"This is a good measure and should ensure better availability of coal. We will also see a lot of foreign investment in this sector as global players will also participate in these auctions."
Government's big plan to push coal gasification to replace natural gas in the fertilizer sector would help square energy and food security objectives,
"India has third-largest reserves of coal in the world. Its gasification can help our country to reduce import of metallurgical coal and crude oil substantially."
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