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Prime Minister Narendra Modi has said that India cannot become self-reliant without developing a robust minerals and mining sector.
“Self-reliance is not possible without strong mining and minerals sector; because minerals and mining are important pillars of our economy,” he said while launching the auction process of 41 coal blocks for commercial mining through video conference in New Delhi on Thursday.
Speaking at the event, Narendra Modi said the nation would overcome the COVID -19 pandemic to turn the crisis into an opportunity.
“India will not only fight against coronavirus but will also win the battle and move forward. India is not going to sit and lament over the crisis. However big the crisis might be, India is determined to turn it into an opportunity. This coronavirus crisis has given India lessons in being Atmanirbhar, that is, self-reliant,” he asserted.
The prime minister said an Aatmanirbhar Bharat implied reducing dependency on imports. It entailed that India develop resources domestically so that the nation did not have to rely on imports. It also meant becoming the biggest exporters of the commodities that the country was currently importing.
To achieve this each sector, each product, each service, should be kept in mind and worked holistically, to make India self-reliant in a particular area, the prime minister said. “A major step is being taken to make India self-reliant in the energy sector. This event not only marks the implementation of reforms concerning just a single sector, i.e., the coal mining sector but also represents the commitment to realise 1.3 billion aspirations,” he observed.
He said that the country was not only launching the auction of commercial coal mining but also freeing the coal sector from decades of lockdown.
He also highlighted one of the biggest absurdities in the country’s coal sector.
“Give it a thought. The nation with the fourth largest coal reserves in the world, the second-largest producer in the world, that nation is not a coal exporter, but the second-largest coal importer in the world! The question is when we are one of the largest producers in the world, why can’t we be the largest exporter,” he asked.
He said this situation had prevailed for decades, with the sector entangled in a mesh of captive and non-captive mines. He added that the sector was excluded from competition and transparency was a major issue. Owing to that, he said, the coal sector lacked investment and its efficiency was also questionable.
Benefits to Extend to Other Sectors
The prime minister said that in 2014, coal linkage was introduced to provide impetus to the coal sector. He said that India had taken a major decision to fully open the coal and mining sectors for increased competition, capital, participation and technology. Touching on an important point, he added that care was taken to ensure that the new players in the private mining sector do not face the problem of arranging finance.
The prime minister said that after these reforms the entire coal sector would become self-reliant. Now that the market was opened for coal, so, any sector could buy coal as per their requirements. The prime minister said these reforms would not only benefit the coal sector but other sectors such as steel, aluminium, fertilisers and cement as well. It would also help in increasing power generation.
The prime minister said that reforms in the minerals sector had received strength from coal mining reforms since minerals like iron, bauxite and others were located in close proximity to coal reserves.
“When we increase coal production, then the positive impact is also felt on production and processing in steel, aluminium, fertilisers and cement sectors with an increase in power generation. Fortunately, in India, reserves of coal, iron, bauxite and other minerals are located very close to each other. So, reforms brought in the minerals sector have got strength from coal mining reforms,” he emphasised.
He said that the beginning of auction for commercial coal mining was a win-win situation for all stakeholder industries. State governments would earn more revenue, while a huge section of the population would find employment.
While implementing coal reforms, the prime minister said that it was ensured that India’s commitment to protecting the environment didn’t get weakened. He added, “The latest technology can be introduced to make gas from coal and the environment will be protected with steps like coal gasification. Coal gas will be used in transport and cooking, while urea and steel will promote manufacturing industries.”
The prime minister said that the government had set a target to gasify around 100-million-tonnes of coal by the year 2030 and four projects were identified for this purpose and around Rs 200 billion would be invested.
The prime minister said that these coal sector reforms will help in the development of the tribal belt in eastern and central India. He said that despite having a large number of NITI Aayog identified ‘Aspirational Districts’, these areas lacked the desired levels of progress and prosperity. Consequently, people from these places had to migrate to distant cities to seek employment opportunities.
The prime minister said that the steps taken towards commercial mining will be very helpful to eastern and central India by providing the local population with employment near their homes. He said that the government had decided to spend Rs 500 billion on creating the infrastructure for coal extraction and transportation, which would also generate employment.
The prime minister said that reforms and investment in the coal sector would play a big role in easing the lives of tribes in the region. The extra revenue generated through coal production will be used for public welfare schemes. He said that states will also continue to get help from the District Mineral Fund (DMF), from which a major chunk would be utilised in the development of essential facilities in the surrounding areas.
The prime minister also said that the auction was taking place at a time when economic activity was fast returning to the pre-COVID-19 levels.
Upon attainment of the peak rated capacity of production of 225 million tonnes (MT), these mines shall contribute about 15 per cent of the country’s projected total coal production in 2025-26. This is also expected to provide employment to over 280,000 people, with direct opportunities for nearly 70,000 people and indirect to about 210,000 people.
The reforms are also expected to generate approximately Rs 330 billion in capital investment in the country for up to seven years. These mines auctioned will contribute Rs 200 billion in revenues annually to governments of the states where they are located. Moreover, 100 per cent FDI in the sector is likely to result in the rollout of best international practices, latest technologies and mechanisation in mining operations. As far as the Aatmanirbhar Bharat Abhiyan is concerned, self-reliance will result in substitution of imports by independent thermal and captive power plants, resulting in saving of foreign currency. This will also provide a boost to the regulated and non-regulated sectors by ensuring sustained coal stocks for industries. The implementation of the National Coal Index will mark a move towards a free market structure. In terms of the country’s sustainable development goals, the reforms seek to encourage the practice of efficient use of clean energy by incentivising coal gasification and liquefaction.