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'Coal block reallocation must give level-playing field'
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SME Times News Bureau | 22 Oct, 2014
Even as the ordinance allowing
reallocation of coal blocks cancelled by the Supreme Court received
presidential approval Tuesday, the Indian industry welcomed the move
saying reforms towards a transparent allocation system must provide a
level-playing field for both public and private sectors.
The
ordinance, unveiled on expiry of the model code of conduct in force for
the recent assembly elections, has been promulgated to resolve issues
arising out of the Supreme Court cancelling allocations of 214 coal
blocks last month.
As per this ordinance, while state-owned
organisations like NTPC and state electricity boards will be allocated
blocks according to their requirements, actual users of steel, cement
and power from the private sector will bid for the blocks," Finance
Minister Arun Jaitley told reporters here after Monday's cabinet
meeting.
Jaitley said the aim is to conduct the whole process in a
fully transparent manner through e-auction, without any discretionary
powers of the government in the matter.
"This is an important
decision and highlights the government's seriousness to reform the coal
sector. It is also necessary that the route followed must provide a
level playing field for both public and private sector including on
terms and pricing," Sidharth Birla, president of the Federation of
Indian Chambers of Commerce and Industry (FICCI), said in a statement.
The
government has also left an enabling provision in the ordinance by
which it can decide on additional commercial use at a later date.
Confederation
of Indian Industry (CII) director Chandrajit Banerjee said that with
the announcement of the ordinance "the air of uncertainty has been
resolved and clear roadmap has been put forward".
"Power, steel
and cement are critical sectors and this would help deal with the fuel
supply problems that were coming up," he added.
Mining interests
of state miner Coal India, present and future, will be adequately
protected and the original 1973 Coal Nationalisation Act remains,
Jaitley said announcing the cabinet approval of the ordinance.
Meanwhile,
major trade unions representing coal workers Tuesday said they oppose
the e-auction of cancelled coal blocks proposed by an ordinance with an
enabling provision for commercial mining by private companies, and
threatened a nationwide strike if the government went ahead with the
proposal.
Saying the proposed ordinance could be used "as a
backdoor entry for taking over the entire coal sector by private
corporates", All India Trade Union Congress general secretary Gurudas
Dasgupta said: "We strongly protest and call upon the government to
reverse the decision as there is an enabling clause in the ordinance
which gives rise to concerns and apprehensions of sweeping privatisation
of coal sector."
If such a vital national resource was
privatised, "national interest will be jeopardised and Coal India will
be weakened", he added.
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