In an article in the Indian Express of today, JD(U) leader Sharad Yadav says that there is no need to open coal sector to private investment because Coal India Limited, a PSU, is making profits. He does mention that it is able to meet only about 63% of the country’s demands, forcing costly imports.
What he doesn’t tell us why there should be any shortages of coal in India. We have one of the world’s largest coal reserves, and we have a PSU with a long experience and presence in the sector.
He also mentions that private companies which had coal blocks allotted to them produced only 10% of the demand. But again he doesn’t mention that those companies needed to obtain about 40 clearances from the different government agencies.
The fact is that coal business in India is controlled by mafia, and not allowing private players right from the beginning is the cause of it. Coal India does make profit, but that is because it is a monopoly selling a naturally available product. This fact hides all its efficiencies.
We need private players in coal because there should be no reason to import coal, we have plenty of it. In all sectors where private players have been allowed, shortages have disappeared, prices have crashed, and efficiencies have increased.
Read the article here.