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Reassure investors to attract funds in coal sector: Navin

In the face of growing coal imports, energy-hungry India needs to develop more coal blocks and reaffirm the faith of corporate sector in government decisions to ensure continued flow of investments from private sector, Naveen Jindal, chairman of Jindal Steel and Power, said.

"All the coal blocks have been allocated by Government of India. State governments have given them either prospecting license or mining leases. If today these blocks are cancelled, country's credibility will be seriously eroded. Who will come and invest here?" Mr Jindal said in an interview.

India had imported around 168.4 million tonnes of coal worth Rs. 95,000 crore last fiscal and this figure is expected to rise in the current year. India is the third largest importer despite having fourth largest coal reserves in the world.

The Supreme Court had on August 25 held that all coal blocks allocated during last 17 years since 1993 by various regimes at the Centre were done illegally and arbitrarily, bringing uncertainty to the fate of 218 block allocations.

The Centre has advocated cancellation of blocks while suggesting that 40 operating blocks and six others soon to be started may be exempted after imposing an additional levy.

The apex court is likely to give its final order soon.

In a departure from global practises, India mandates allottees to set up end-use plants on the basis of allocated coal blocks besides charging a hefty royalty at a rate which is the highest in the world. Rates are hiked every 3 years.

"Other countries just want you to develop the coal blocks and are happy with the royalty. In India, even after setting up large end-use projects successfully following government's policies, if corporate India's investments would not be safe, then what is the surety of anything in future also? Is private sector in India the second grade corporate citizen compared to public sector?" asked Mr. Jindal, chief of $3.3 billion JSPL.

"The allocated coal blocks were actually difficult blocks with no infrastructure and Coal India did not have any plans to develop them. Private sector developed them. Now, after our hard work, if we are asked to give away these blocks, will it be fair? Why is Coal India more special than the private sector? Is it more efficient, paying any different royalty or Income Tax? CIL doesn't even set up any end-use project. CIL has 65 billion tonnes of coal resources. It is not operating its mines at 100 per cent capacity even after having all the clearances. We, on the other hand, are operating our mines at 100 per cent capacity," he added.

Corporates, who have successfully developed these blocks and large end-use projects after facing several years of land acquisition challenges, clearance issues and risks, need to be rewarded and encouraged. Around Rs. 4 lakh crore have been invested and lakhs of people are employed in these coal blocks and end-use projects, he said.

Source: PTI