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Being a Coal Minister is not easy in any part of the world. There is pressure from the green activists to shut down mines, and there is pressure from the human rights activists to protect the livelihood of coal miners. Pralhad Joshi, Minister for Coal and Mines in India, faces a similar dilemma every day. While he has been very vocal about the fact that coal production and consumption in India will continue to grow for next two decades, he realises that his ministry has to align with the green targets India committed to at the United Nations Climate Change Conference. Talking about India’s energy security needs, in an interaction with Outlook Business, Joshi lays out his ministry’s plans to make coal mining sustainable. Edited excerpts:
As the Coal Minister, what is your biggest challenge when it comes to protecting India’s energy security?
It is important to keep in mind the issue of emission and global warming when looking at energy security. Given the emission target that PM Modi has provided, balancing both is a difficult task, but we have been making progress. While coal gasification is happening on one side, we are also focusing on plantation and reuse of mine water for irrigation. Even for drinking water, we are using mining water and making it potable. These are big challenges on the side of sustainability, but a bigger challenge that our government is addressing is that of imports. Despite having so much coal reserves in India, we are still having to import from other countries, and I want to stop that. As far as thermal power is concerned, we will stop importing coal by 2024-25.
In 2012, NTPC chairperson Arup Roy Choudhury had made similar remarks and urged the then government to utilise all coal reserves within the next 25 years. But ever since the climate talks became intense, it seems the choice between coal and growth has political repercussions and India is at the crossroads between affordable growth and sustainable growth. What’s the way forward?
We have to achieve sustainability without letting go of energy security. One of the best solutions for this would be gasification. We are also providing incentives in commercial coal mining. This includes 50 per cent as far as revenue sharing is concerned, and an additional Rs 6,000 crore incentive for those want to participate in gasification. It’s what you call a productivity-graded incentive.
Another important step is the plantation work that Coal India is doing. If this is properly recorded and authenticated, that itself will be a world record.
Back in 2012, or even prior to that, the allocation process of natural resources was very corrupt. Now, 64 auctions for commercial coal mining have happened and another 141 will take place simultaneously. Unlike in the past, no industrialist approaches our government for coal mine allocation, as we have established transparency.
I want to underline that Coal India has done an amazing job in the last 2-3 years. Their production has gone up like anything. Having said that, depending on a single PSU was not right. They should have given coal mines to private sector then itself. If privatisation had happened 20-25 years ago, you could’ve brought out good amount of coal in this time.
We imported coal worth Rs 2.5 lakh crore annually for 20 years. There was no planning before Modi government came to power. Now, I can proudly say that we have established a transparent practice.
In 2012, 208 coal blocks were cancelled. Since the nationalisation of coal mines, private players have not enjoyed any space in the sector and hence they are low on confidence. Considering this, how are you encouraging the private sector to step in?
The allocation of mines was totally based on discretion back then. The auction mode that we use presently is most transparent, as the Supreme Court has pointed out. Nobody has dared to raise fingers at Piyushji (Minister for Coal from 2014 to 2019) or me so far, because of the transparency that has been brought in. There is no malafide intentions or corruption anywhere. That is why 64 blocks have been successfully auctioned so far, and now 141 are left. I have no doubt in my mind regarding the confidence of the private sector.
Is Coal India too big for it to allow a competitive space for private sector. In the future, can Coal India or its subsidiaries be privatised?
According to me, they are doing a good job and they should continue to perform well without being complacent. As far as the government and I are concerned, we are very clear that there is no proposal of privatisation or anything like that.
There’s a lot of pressure from the West to go green. Are you trying to negotiate international financing to achieve green transformation? Or are you focusing only on economic growth?
While approaching sustainability, energy security remains paramount. To achieve sustainability, there are steps like plantation, gasification, using mine water for irrigation, for drinking water etc. Emissions cannot be stopped altogether. We have to absorb the emissions and build capacity for the absorption. That is a part of sustainable practices and our ministry, as well as the government is trying to do that.
In the past, as well as the present, green activism has caused setbacks to several mining projects in India. There are anti-mining protests as well as pro-mining protests. Because of these, the projects get held up. How are you dealing with this at the national level?
It cannot be handled at the national level. We interact with the state governments regularly and as part of this, I have been to Chhattisgarh, Jharkhand, Madhya Pradesh, Maharashtra, Odisha etc. It’s said that Odisha has taken proactive steps. When mining reforms were introduced in 2021, there was opposition from the states, and even from our own department’s bureaucrats. We ultimately succeeded because of the Prime Minister’s proper and timely guidance. Since then, many states are auctioning and getting huge revenues out of it.
The best example is Odisha itself whose revenue was Rs 25,000 crore and today it is Rs 50,000 crore. They have deposited around Rs 10,000 crore as balancing reserve fund in the RBI. This is the opportunity for India to do sustainable mining of coal or other resources. Mining will contribute to the GDP and provide employment. Each new mine gives 12,000 direct or indirect jobs.
So, I just want to urge all state governments to utilise the opportunities. The union government has brought all these reforms, incurring several costs. For example, we hold coal auctions and we bring in agencies to handhold the successful bidders. This is a cost that the Centre incurs and we do not get anything from it. The intention of the PM is to see to it that states successfully do sustainable mining business and get the revenue. Such huge revenues will help them serve the people. States should not oppose a policy only because the union government comes up with it.
Without taking names, I will say that there are states who opposed the policy and are earning due to it now. Public interest should be of paramount importance and decisions should be taken keeping the poor in mind. After agriculture, and small industries, coal is the third largest employer. It has the potential to be second largest employer, if managed well. We have to keep politics aside and work towards this aim.
In 1952, the freight equalisation policy came about, and all industries were set up in the West and the South, while the mining took place in the East. Subsequently, all the Eastern states have remained poor. With the concept of ‘Just Transition’ coming around, what is India’s long-term vision?
If you have resources, coal or anything else, you can do anything. Yes, bringing around sustainability is a different process that we have talked about. If you have iron ore, building a steel plant is a viable option. Of course, making it sustainable involves additional work. The world requires steel and India’s requirement alone is going to be 3 times as before.
Investment is to be made in Tier 2 cities of the country. North India is not developed enough, as opposed to South India. If you can plan and invest, there can be good industrialisation. Now that has to be planned by state governments.
When you look at the new-age industries coming up, such as Foxconn bringing chip manufacturing to India, do you think there should be a plan to have future industries in East or North India? If we go by poverty concentration, the well-off states are in South and West. At some point, should the government give some mandate to PSUs to revive the not-so-successful Nehruvian idea of balanced regional development? Do you think your government would want to give some direction like that?
In any state, it is important to create a good ecosystem if any industry has to come up. A good, business-friendly atmosphere should be there. If my memory serves me well, contribution of agriculture sector to GDP was 66-67 per cent in the 60s. But later, agriculture’s share in GDP went down. This was not because agricultural production came down but due to an increase in contribution from industries. And those who started contributing highly, also provided new job opportunities. This is what tourism sector did as well.
From this, I understand that states and union government can together create good policies. Currently, we have good policies for natural resources, so there is a need to utilise that and convince all the states to make use of that. For 20-25 years we did not extract coal, and now it is debatable whether coal will be in use for long. However, other countries have already utilised their coal. So, the conditions are ripe for us. We have a good workforce, we have land, we have all that is required. So, state governments have to work hard and use the resources at their disposal. They have to add value to it, and utilise it. The union can create a good atmosphere for investment, that’s all. States have to make the domestic investors confident, while the union government only facilitates the process. That is what we are doing now.
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