Coal Sector Reforms

Objective – 4 fold – to increase

  1. Investment,
  2. Production,
  3. Employment and
  4. Boost to Make in India initiative

Mineral Laws (Amendment) Act, 2020 

It Amends the

  1. Coal Mines (Special Provisions) Act, 2015 [CMSP Act]
  2. Mines and Minerals (Development and Regulation) Act, 1957 [MMDR Act].

Provisions

  1. Allocation of coal blocks for composite prospecting license-cum-mining lease

It will help in increasing of the inventory of coal, lignite blocks for allocation.

  1. Provision for requirement of Approval from Centre – Done away

In cases where the allocation or reservation of coal/lignite block has been made by the Central Govt. itself

  1. Provided flexibility to the Central Govt. in deciding the end-use of Schedule II and III coal mines under the CMSP Act.

Government introduced a slew of reforms such as

  1. Easing participation norms for bidders, – More competition
  2. Eliminating end-use restrictions,
  3. Shifting from rupee per Tonne model to revenue-sharing model
  4. Government has introduced a more equitable system of sharing revenues, moving away from fixed rates to an ad-valorem system.

So when the prices go up, the miner shares more with the government and if they decrease, he shares less. This is equitable for both the parties.

  1. Permitting 100 per cent foreign direct investment in the coal sector – foreign players
  2. The eligibility criteria has been done away with, and no coal mining experience is required to take part in the auction process.
  3. Simplified the process of the mining plan approval process from 90 days to 30 days.
  4. Other relevant measures include
    1. Promoting coal gasification through rebate in revenue share, and
    2. An investment of ₹50,000 crore to create transportation infrastructure for evacuating one billion tonnes of coal from state-run Coal India’s mines.