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Home » Environment » on how india’s attempts to fix the coalgate mess are faring

on how india’s attempts to fix the coalgate mess are faring

in the days after the cbi’s 14th FIR, delhi’s political circles crackled with ignorant speculation.

the FIR was the congress’ way of warning industry against supporting narendra modi, the BJP’s prime minister aspirant; the FIR had been filed to discredit pc parakh, the former coal secretary; a rival business group was trying to scupper industrialist kumarmangalam birla’s chances of getting a banking license…

in the process, a key question escaped scrutiny once again: how are India’s attempts to fix the mess created by coalgate progressing?

coalgate, remember, is not about small, undeserving companies getting coal blocks. nor is it about the government blowing a chance to rake in cash by auctioning them. it is about a resource grab where a handful of companies cornered 44 billion tons of coal, leaving coal india (CIL) with just 49 billion tons to meet coal demand from the rest of the industrial sector.

as such, its fallouts are serious. by concentrating ownership of coal reserves, coalgate has distorted the thermal powerplant market. power plants which have to import 35% of their coal — due to a weakened CIL’s inability to meet everyone’s coal requirements — cannot compete with power plants with captive blocks. projects have been abandoned. consolidation and bank write-offs look likely.

it has also pushed the country towards an oligarchic future and compromised india’s energy security. it has also accelerated the loss of india’s central forests and imperilled the rivers that originate there. CIL, with a range of coal blocks to mine in, could defer mining in pristine forests. a company with a single block doesn’t have this luxury.

over the past year, multiple institutions, from the supreme court to the CBI to the coal ministry, have been examining different aspects of coal and coalgate. between them, the country has a rare second chance to get its act on coal together, to set in place a new architecture which provides cheap, plentiful coal equitably till the country can move to cleaner fuels.

the question is whether the corrective steps underway are taking us in such a direction.

which is what this story out today is on.

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