Coal bill battle in RS, delay may affect power sector

Any delay in passing the coal bill may cause a crisis in the coal sector which would also affect the power sector. Rashme Sehgal reports for Rediff.com

The recent coal block auctions of 19 mines under production (Schedule 2) brought in over Rs two lakh crore (Rs 2 trillion). This led jubilant Coal Secretary Anil Swarup to tweet, 'Likely proceeds from coal block auctions crosses Rs two lakh crore. These include e-auction proceeds, royalty proceeds and upfront payments.'

Coal Minister Piyush Goyal also jubilantly tweeted that e-auction of 32 coal blocks out of a cancelled 204 coal blocks, has yielded royalties and upfront payments of Rs 2.07 lakh crore which is an excess of the Comptroller and Auditor General's estimated loss in 2012 as being Rs 1.86 lakh crore.

The government will begin issuing ownership rights on March 23 for the coal blocks that have been auctioned so far.

The government has happily announced that it expects to raise another Rs 15 lakh crore (Rs 150 trillion) from coal auctions and the money will be shared between the states and the Centre.

Goyal declared that coal producing states like Odisha, Jharkhand, West Bengal and Chhattisgarh will be the biggest beneficiaries of these auctions.

Realising the importance of coal as being India's primary source of energy, the National Democratic Alliance government chose to pass two ordinances to allow the e-auction of coal blocks after the Supreme Court had cancelled these allocations of 204 blocks.

The Coal Mines (Special Provisions) Bill 2015 was introduced and passed in the Lok Sabha in the current Budget session of Parliament. Speaking on the significance of this bill, the coal minister emphasised that the bill would ensure a 'transparent and honest process of auctioning of coal blocks.'

But he also warned that any delay in its passing would cause a crisis in the coal sector which would also affect the power sector. The bill was passed by a voice vote in the Lok Sabha after the House voted out amendments that had been moved Opposition members.

'Economic activity would have been impacted. It was very essential that the ordinances be brought to see that coal production continues,' Goyal stated.

With the ordinance due to lapse on April 5, the coal bill has been referred to a parliamentary select committee of the Rajya Sabha.

Congress members, both in the Lok Sabha and the Rajya Sabha, have come down strongly against the failure of the NDA to bring in much needed amendments which had been asked for across party lines.

Congress MP Rajiv Shukla, a member of the parliamentary committee in the Rajya Sabha, questioned the urgency with which such an important bill was being rushed through. "None of the key ministries including power, steel, environment and forests and tribal welfare have been consulted for this bill. Nor have the states been consulted," says Shukla who has given a note of dissent.

"The bill is being hurried through because it is one more effort to promote crony capitalism," alleges Shukla. "There are major flaws in this bill. They have refused to set up a regulator, but if they are going to privatise the trading of coal as also its pricing, then a regulator is the need of the hour."

"Nor has the bill addressed itself to the key issue of retrenchment and compensation to be paid to labour. With coal blocks being given to new owners, the issue is what is going to be done with the labour hired by the previous owners and how will they be compensated -- who will settle the dues owed to them. The bill has no clarity on this issue either," points out Shukla, a minister in the Manmohan Singh government.

Another key shortcoming in the present bill explains Shukla was that in the earlier bill, Coal India was entitled to make a 10 per cent allocation to the small scale industry including the brick kilns, the glass industry so that they got coal at subsidised rates. This has been removed, the MP adds.

Dipender Hooda of the Congress voiced similar concerns in the Lok Sabha, pointing out, 'Coal is a national asset and it had been put in the central list so that all states could pitch in jointly in sharing both its profits and losses.'

Vandana Chavan of the Nationalist Congress Party and a member of the Rajya Sabha committee was critical that the suggestions of Opposition members had not been incorporated. "It has been done in great haste. I can understand it relates to power generation, but it is not a comprehensive bill."

"There was complete unanimity on the need for a regulator and also to ensure that the rights of Adivasis and labour must be taken into account. This has not happened," says Chavan.

She is also upset that not adequate attention had been paid to the need to conduct an Environment Impact Assessment prior to the allocation of a mine whereas it will take place the other way around.

"This will only result in delays and time loss. We also suggested that there should a panel of experts to do a complete mapping of the location of steel and power plants in relation to the coal mines. But this suggestion has also not been given due weightage. The issue of the end user has not been given due weightage," she adds.

Chavan also points out that there was complete unanimity on the demand for a regulator. "When the government is moving from public to private control of this key sector, then there must be a regulator to oversee this process," she says.

Naresh Gujral, the Akali Dal MP, strongly defends the need to push the bill through as soon as possible.

"The NDA government has a mandate for a different economic policy. Its thought process is different from the UPA (United Progressive Alliance). We believe PSUs (Public Sector Units) must get competition from private companies," says Gujral.

"We believe this competition will see PSUs give a better performance. The archaic ways of thinking and operating of PSUs must end," he says.

Gujral agrees on the need for a regulator and says, "I too am on the side of protecting labour. But if we were to start introducing amendments to the bill, it would have to go back to the Lok Sabha and the whole process will get delayed. That is why these changes will be incorporated in the rules and not in the bill itself," he points out.

The parallel Mines and Minerals (Development and Regulation) Bill has also been given to a separate 19-member committee of Parliament. Both panels are chaired by BJP MPs Bhupinder Yadav and Anil Dave.

The House agreed that parliamentary scrutiny was needed for all important bills and that they would be sent to the select committees, except minor bills.

The bill has already gone through the scrutiny of the select committee last year. While the Left parties are expected to press for a division of votes, the stand of the Congress party has to be seen given the fact former commerce minister Anand Sharma was part of the select committee.

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