Atmonirbharsil Bharat by Privatization of Coal Sector?

Bhaskar Majumder

These days I stopped expressing surprise or shocks for whatever I was taught by my great teachers in Kolkata have come to be questioned. One such is privatization of coal mines and calling it India’s self-reliance. It was surely not “command and control’’ through licence-permit raj but it was surely inward-looking import-substituting industrialization that was seen as self-reliance not only since 1956 but also re-iterated in the Fifth Plan. Self-reliance was understood along with removal of poverty, as declared in India’s Fifth Plan that was formulated under the leadership of Sukhamoy Chakravarty.

The economy needed to get rid of its past – past locked the monopolists/oligopolists. Past also nationalized core sector – now that is to be unlocked and privatized. This is not to imply that all was pro-people in the past.

Following the Report on 18th June, 2020, 41 coal blocks are going to be auctioned following the consent from the apex authority. The auction of mines was launched for commercial mining, that is calculated to collect Rs 3,30,000 million of capital investment in India over next five to seven years. The Government asserted that it not only marked the beginning of unlocking of the country's coal sector from the 'lockdown of decades', but aimed at making India the largest exporter of coal. This was for commercial mining, a move that opened India's coal sector for private players, and termed it a major step in the direction of India achieving self-reliance. By juxtaposition, it was also opined that India soon would win the Corona virus war and turn this crisis into an opportunity, and the pandemic would make India self-reliant. The argument was, the launch of the auction process not only marked the beginning of unlocking of the country's coal sector from the “lockdown of decades”, but aimed at making India the largest exporter of coal. "Allowing private sector in commercial coal mining is unlocking resources of a nation with the world's fourth-largest reserves," the authority pointed out. The commencement of auction process of these blocks, part of the series of announcements made under 'Atmanirbhar Bharat Abhiyan', was likely to contribute Rs 2,00,000 million revenues per annum to the state governments. In line with the Prime Minister's Atmanirbharsil call, the aim behind the auction process was to achieve self-sufficiency in meeting energy needs and boosting industrial development. The authority also lambasted the past policies of keeping the coal sector closed.

With a view to achieve self-reliance in the coal sector, the Ministry of Coal in association with FICCI launched the process of auction of 41 coal mines under the provisions of Coal Mines (Special Provisions) Act and Mines and Minerals (Development and Regulation) Act. It was opined that privatization of coal sector would lead to higher output and higher employment, apart from higher revenues and higher exports. It would lead to employment generation for more than 2.8 lakh people – direct employment to approximately 70,000 people and indirect employment to approximately 2,10,000 people, as the government announced.

Presently, despite being the world's fourth largest producer, India is the second largest importer of coal. Long back in 2004 while engaging me in a major World Bank-sponsored research on uses on industrial wastes focusing of fly ash, I was made to understand that most of the coal in India for further extraction had high ash-content that was unsuitable for constructions of the high load carrying capacity.

The major question is of course not ash-content but thought-content. There must have been reasons why coal mines had been nationalized half-a-century back. If that decision was wrong, a high-power committee could have been set up by the Government of India – committees and their members are not scarce in India – that could have told the people of Bharat what went wrong with nationalization of coal mines or state control over the mines. I do not have any document as such – I would like to be enlightened if such a document exists.

The problem is bigger than the above – it is belittling the self and glorifying the private players. What is the self? It is the state represented by the Government of India that says that everything went wrong with the coal sector during the past half-a-century and hence that need to be unshackled for the hawks to grab. Who decides the export policy? It is the Government of India. More output by extraction may not lead to more exports or the export elasticity of output may be sufficiently less than one. If the private players produce more, that not only implies immediate economic success in terms of revenue and profit but also long-term environmental failure. The players are not only the Government of India and the Corporate – people are also there to be victims in the process.

Who decides prices of public utilities like coal-gas-electricity-kerosene-petrol-diesel? It is the Government of India. Now will the coal price be decided by the private players? If yes, will the Government provide subsidy to the common people for most of these come as basic energy needs in the household sector, assuming the private goal of profit maximization will take the easy route of pricing. An economy is more than and different from Government-Corporate collusion.

I would like to stop but raising two small questions addressed to the Government of India: 1. Why the decision-in-a hurry now in a situation of Corona-crises when people are home-locked and almost lip-locked (self lip)? 2. Does this opening up lead really to economic self-reliance or Atmonirbharsil Bharat? Regarding first question, it could be celebration of half-a-century of caged nationalization and freedom for the coal sector – or actually freedom for the crony capitalists. But the problem remains – the country is seriously engaged in unlocking Corona-caging and during that time trying to unlock coal-caging is a surprise. I am not sure if it is a hurried decision to get more revenues from the private players to reduce the fiscal deficit. Export-possibility is a more serious question, if successful, can add to more of Foreign Exchange Reserves. But I am told India has no dearth of these reserves as on date. Also, export-led growth could be thought of. But often it becomes export-led exploitation of the home potential consumers by pricing.

The second question is least understood by me – how could a handful of private hawks ensure Atmonirbharsil Bharat when the state claimed it failed? If the policy is total privatization, why not these hawks come to occupy the chairs in bureaucracy so that not only the PSUs but also the public administration is run by these hawks? Or, the whole of the geographic space of Bharat minus the space occupied by the Parliament of India can be unlocked for these hawks to play. Where will be the role or functions of the people of India that is Bharat? They will be employed; it was assured while unlocking the coal sector. Is it? Will the private players be interested to engage the workers on a regular basis much more than what the state could do?

I fail to understand why the state is being belittled through its major wing – the Government of India. 

Bhaskar Majumder, Professor of Economics, G. B. Pant Social Science Institute, Allahabad - 211019

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Jun 21, 2020

Prof. Bhaskar Majumder

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