Thu. Mar 28th, 2024
piyush goyal

The government on Tuesday approved opening up of coal mining to the private sector for commercial use, a major reform in the sector since its nationalisation in 1973.

Announcing the decision taken by the Cabinet Committee on Economic Affairs , coal and railways minister Piyush Goyal said the reform is expected to bring efficiency in the coal sector by moving from an era of monopoly to competition.

India’s power sector has grown at a slower pace than the industry expected , and growth in internal demand for coal will depend on the success of India’s rural electrification programme and overall industrial growth.

Opening up production to private firms could provide a fillip to India’s resource-rich eastern states , which hold most of India’s coal reserves. All the revenue from the auction of coal blocks would go to the states , Goyal told reporters.

Railway and Coal Minister Piyush Goyal told reporters here after a Cabinet meeting that it had approved the methodology for auctioning coal mines to private companies in order to bring efficiency into the sector.

Coal-fired power plants in the country are currently facing acute fuel shortage. According to Central Electricity Authority  data , as of February 6 , six plants had less than seven days of coal stock , while 14 others had fuel for less than four days’ use.