Lok Sabha Question No. 1584 (UNSTARRED), answered on 2021-02-10
Subject: Reforms in Coal Sector
Ministry: COAL
Asked by: Nama Nageswara Rao

## GOVERNMENT OF INDIA MINISTRY OF COAL

## LOK  SABHA UNSTARRED QUESTION NO. 1584

## TO BE ANSWERED ON 10.02.2021

## Reforms in Coal Sector

## No. 1584          Shri NAMA NAGESWARA RAO

Will the Minister of Coal be pleased to state:

- a. Whether the Government is planning to bring in reforms in Coal Sector as it is bound to continue to play a major role in the power segment in the near future;
- b. if so, the details thereof and if not, reasons therefor; and
- c. the steps being taken by the Government to check the  weakening financial position of Coal India?

## ANSWER

## MINISTER OF COAL, MINES AND PARLIAMENTARY AFFAIRS (SHRI PRALHAD JOSHI)

- (a) Yes Sir. Done recently.
- (b) The Mineral Laws (Amendment) Act, 2020 was enacted to amend the Coal Mines (Special  Provisions)  Act,  2015  [CMSP  Act]  and  the  Mines  and  Minerals (Development and Regulation) Act, 1957 [MMDR Act]. The amendments in the Acts enabled following.

(i)Allocation  of  coal  blocks  for  composite  prospecting  license-cum-mining  lease which will help in increasing of the inventory of coal, lignite blocks for allocation. Repetitive  and  redundant  provision  requiring  previous  approval  of  Central Government in cases where the allocation or reservation of coal/lignite block has been made by the Central Govt. itself has been done away with.

(ii)Provided flexibility to the Central Govt. in deciding the end use of Schedule II and III coal mines under the CMSP Act. Companies which do not possess any prior  coal  mining  experience  in  India  can  now  participate  in  auction  of  coal blocks.

(iii)Methodology  for  auction  of  coal  and  lignite  mines  /  blocks  for  sale  of  coal  / lignite  on  revenue sharing basis  under the CMSP Act  and the MMDR Act was approved by CCEA on 20.05.2020 and order was issued on 28.05.2020. Salient features of the methodology are as under:

- o Bidders would be required to bid for a percentage share of revenue which would be payable to the State Government.
- o Applicable to fully explored as well as partially explored coal blocks under the  CMSP  Act  and  MMDR  Act..  Upfront  amount  is  based  on  value  of estimated geological reserves.
- o Successful bidder shall be provided incentives for early production and for gasification  or  liquefaction  of  coal..  Exploitation  of  Coal  Bed  Methane (CBM) is allowed.
- o There shall be no restriction on the sale and/or utilisation of coal from the coal mine.
- o Provides  for  relinquishment  of  coal  block  by  the  successful  bidder  of partially  explored  coal  mine.  Directions  of  the  Central  Government  were issued to the Nominated Authority for conducting auction of 38 coal mines for sale of coal under the provisions of the CMSP Act and the MMDR Act. After completion of all the  necessary processes, Commercial Mining was launched on 18.06.2020

(c):  Coal  India  Limited  is  a  profit  making  and  Dividend  paying  Central  Public Sector  Undertaking  under  the  Ministry  of  Coal.  CIL  does  not  receive  any Subsidy/Financial aid from the Govt. of India.