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Small business units go sans subsidized coal in Bihar

Small and medium enterprises (SMEs) of Bihar have been going without subsidized coal since Coal Distribution Policy was announced in 2007. Under the policy, SMEs consuming less than 4,200 tonnes coal per annum are eligible to get it from the state-nominated agencies at controlled price.

Given this scenario, the state's quota of 3.85 lakh tonnes per annum has been lapsing for the last seven years.

The non-availability of subsidized coal has created problems for the state-based SMEs. The only option left to them is to purchase coal from the open market by paying a premium of about Rs 1,500-2,000 per tonne. "It was notified in the policy that every state government will nominate an agency, which will have a fuel supply agreement with Coal India Limited. Bihar government has nominated Bihar State Mineral Development Corporation Ltd as its authorized agency. However till date, no fuel supply agreement has been signed with Coal India Ltd," said vice-president, Bihar Industries Association (BIA), Nisheeth Jaiswal.

Due to non-supply of coal at controlled prices, industries in Bihar have become uncompetitive, which has a multiplier effect on the state's economy. Jaiswal said, "Already, raw material prices are higher in Bihar and the coal issue just piles on the woes of industrialists. We have written several letters to the mines and geology department, but got no reply. The matter was handed over to Bihar State Co-Operative Marketing Union Ltd (Biscomaun) but it failed to improve the situation."

Bihar State Mineral Development Corporation Ltd does not have any employee of its own, said director, mines and geology department, Hasnain Khan. Letters were written to the government to appoint people on contract for the corporation, but the proposal was rejected. Khan said, "We have also asked the state industry department and DMs to submit a list of SMEs to directly connect them with Coal India. However, they are yet to provide the list."

source: http://timesofindia.indiatimes.com