After exhausting all available options to increase coal production, the government has decided to incentivise private sector coal mines to sell their surplus produce to state-run Coal India but with the assurance they can get it back at a profit in future.
To ensure the proposal has wide-ranging support, the government plans to set up a committee that will include financial sector luminaries like HDFC Bank chairman Deepak Parekh, ICICI Bank chief Chanda Kochhar and others to fine tune it.
The plan is essentially a simple one. Private sector coal miners will be encouraged to produce more coal than they need for their units. The excess production will be sold to Coal India and the producers will have the right to buy back the coal in future if they need but at a price close to the current price.
Coal India will basically act as a coal bank. Endorsing the proposal, deputy chairman of Planning Commission Montek Singh Ahluwalia has, however, said the government should not be seen as extending subsidies to independent power plants through the plan.
Commission member BK Chaturvedi, who oversees the energy sector in the Plan panel, has pointed out that it is quite possible that this could become a reality if the price of coal rose in future since the committed offtake of the mineral at current prices could be seen as a subsidy.
"Obviously, if the price behaviour is in reverse direction, no such criticism will be made. But it is not possible to predict the price behaviour of coal," Chaturvedi has reasoned.
Endorsing the contention, Ahluwalia has asked Chaturvedi to chair a committee of experts in which eminent personalities like Parekh, Kochhar and coal secretary Sanjay Kumar Srivastava would be the key members. While Ahluwalia was also keen that the finance ministry's chief economic adviser Raghuram Rajan is inducted into the panel, but with his elevation as the RBI governor, another Commission member, Saumitra Chaudhuri, is likely to be inducted as a member.
No comments:
Post a Comment