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FICCI lauds govt decisions to ease coal mining rules, sell stake in PSUs

FICCI said the Cabinet decision to promulgate Mineral Laws (Amendment) Ordinance 2020, will ease rules for auctioning coal mines to open up to all sectors and will allow auction of 46 iron ore and other mines before March 31, 2020

twitter-logoBusinessToday.In | January 8, 2020 | Updated 22:34 IST
FICCI lauds govt decisions to ease coal mining rules, sell stake in PSUs
FICCI also welcomes the Cabinet's approval of the proposal to provide VGF to build a gas grid in North East India

The Federation of Indian Chambers of Commerce and Industry (FICCI) has welcomed the government's decisions to ease coal mining rules, provide viability gap funding (VGF) to build 'North East Gas Grid' project, and strategic disinvestment in state-owned entities.

The apex industry body said the Cabinet decision to promulgate Mineral Laws (Amendment) Ordinance 2020, will ease rules for auctioning coal mines, opening up process to all sectors, and will allow auction of 46 iron ore and other mines before March 31, 2020.

"This decision will do away with the leeway provided to only steel, power and coal washeries and open the commercial coal mining bidding for all the firms. The Cabinet decision will also do away with end-use restrictions of the mining blocks and pave the way for the first leg commercial coal auctions within this fiscal," said Dilip Chenoy, Secretary General, FICCI.

"The move is expected to provide a big push towards efforts for auctioning of coal blocks for commercial sale. It will help attract investments from Indian and global corporates. This is also a major step towards realising the Government's target to completely stop coal imports by power plants by 2024," he added.

FICCI said that only 29 coal blocks were auctioned since 2014, when Supreme Court cancelled 214 coal blocks, due to end-user restrictions. The amendments will remove these restrictions and will also improve the ease of doing business in the country, it said.

Recently, the government had announced 100 per cent foreign direct investments (FDI) under the automatic route for coal and lignite mining for captive consumption by power projects, as well as iron and steel, and cement units. The government also allowed auctioning of mines to all sectors.

According to FICCI, these moves "will probably help in clearing all the hurdles ahead of the upcoming auctions of commercial coal blocks".

FICCI also welcomed the Cabinet's approval of the proposal to provide VGF to build a gas grid in Northeast India at a cost of Rs 9,265 crore. "It's a welcome move and good for increasing the share of gas in the energy mix," said Y K Modi, Past President, FICCI and Executive Chairman, GEECL.

The industry body voiced its support towards the Cabinet's approval for in-principle strategic disinvestment of equity shareholding in five PSUs - Minerals and Metals Trading Corporation Ltd (MMTC), National Mineral Development Corp (NMDC), MECON, Neelachal Ispat Nigam Ltd (NINL), and Bharat Heavy Electricals Ltd (BHEL). "This will help generate resources for supporting investment and revive growth," said Chenoy.

The Cabinet on Wednesday approved several proposals including strategic disinvestment of small PSUs and ratification of MoUs on energy sufficiency between India and the UK and promulgation of Mineral Laws. Apart from that, the Cabinet also approved ratification of migration and mobility partnership agreement between India and France. The agreement, signed in March 2018 till 2025, incorporates provisions for auto-renewal.

By Chitranjan Kumar

Also Read: Cabinet clears strategic disinvestment proposal for BHEL, Neelachal Ispat, MMTC, NMDC

Also Read: FICCI calls for lower personal tax rates, tweaks in Taxation Bill to boost economy

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