New Delhi: While the investigative agencies do their job to probe the allegations of irregularities in the allocation of coal blocks, it is of utmost importance that the government must move with a much faster speed to ensure that enough coal is mined and dispatched to the thermal plants and the sector does not get burnt down in the flames surrounding unsavory controversies, industry body ASSOCHAM said today.

“It is nobody’s case to defend any wrong-doings. But to hold the entire sector, which is a lifeline to the economy, to ransom would deal a deadly blow to the industrial output and the overall economic growth,” said Mr Rajkumar Dhoot, MP and president of the Associated Chambers of Commerce and Industry of India (ASSOCHAM).

Without picking up faults with the Coal India Limited (CIL), Mr Dhoot  said, “It is a worrying fact that coal production has lagged much behind the demand and the worst hit are the infrastructure sectors  like power, steel and cement. Several of the power projects, including the ultra mega power projects (UMPPs) have been forced to go in for imports of coal from countries like Indonesia.  Unfortunately, even some of the coal blocks bid for the Indian firms overseas are also facing different problems.”
   
“It would be a travesty of the worst order if a country with coal reserves of 2,85,862 million tonnes, is not able to mine coal and is forced to go in for expensive imports.  The imports of this natural reserve have a cascading effect on the economy, raising the vital input cost and hitting the country’s vulnerable balance of payment position,” said the ASSOCHAM chief.
 
Due to various factors, the CIL, which accounts for over 80 per cent of the country’s coal output has missed its target and produced only 435 million tonnes in the fiscal year 2011-12. The reasons include not receiving environmental clearances besides some natural factors. In fact, the coal production this year would be somewhere around the level of 2008-09 of about 500 million tones, which is not enough to fuel the economic growth , that we desire, said the chamber.

However, Mr Dhoot appreciated the efforts of Prime Minister, Dr Manmohan Singh to fast track the sector when he recently called a meeting of senior ministers concerned with the infrastructure ministries such as power, coal, shipping and civil aviation.

 The ASSOCHAM president particularly lauded the Prime Minister’s approach. The PM had said,“There is a need to revive business and investor sentiment. There is a need to give a thrust to investment, both public and private. There is a need to create an atmosphere which is conducive to investment and to removing any bottlenecks to growth. The government is not only aware of the challenges but is committed to taking the necessary measures to reverse the situation and revive India's growth story.”

In his meeting the Prime Minister has set a production target of 470 million tonnes for the CIL alone in the financial year 2012-13. Of this, the company will dispatch 347 million tones coal to the power sector in FY 12-13 against 312 MT dispatched last year (an year-on-year increase of 11.2 per cent).

However, Mr Dhoot said, “The Prime Minister’s Office should keep the pressure up on these ministries and ensure that the targets agreed upon should be delivered. While efficiency in public sector, CIL should be improved, the private sector projects in the power sector also need to be pragmatic enough to enter into fuel supply agreements to the extent feasible.”
 
When it comes to allocation of coal blocks in the private sector companies for their captive use, out of 195 blocks allocated, only 28 have begun production. “No doubt it is pathetic situation. But it is about time the government and the private players, held discussions and sorted out the issues – be it environmental clearances and lack of other infrastructure. The government on its part, can also deal with the willful defaulters so that a sense of urgency is infused,” said the ASSOCHAM president. “As for the future allocation, whatever policy has to be adopted, it has to be surely transparent. But in the name of transparency, precious time should not be wasted as the country can ill-afford any such delays when we aspire to regain the nine per cent economic growth.”
 
One of the major bottlenecks for coal is the movement by the railways, observed ASSOCHAM. The Railways and the CIL should ensure that these issues are sorted. Besides, the user industries should be encouraged to have partnerships.