Thursday, October 6, 2022

FDI a good step but more needs to be done: CIL former CMD

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New Delhi: A former Chairman of Coal India said that the Centre’s decision to open up India’s coal sector to 100 percent Foreign Direct Investment (FDI) will elicit interest from global players. However, he added that much more needs to be done to convert that interest into investment.

Partha Bhattacharya, former Chairman and Managing Director of Coal India, said, “We now need the right kind of policies to ensure that global players come to India.” The state-run coal mining company had listed on the bourses in 2010 and it remains India’s largest-ever public offering.

What would be the right kind of policy?

The right policies would include single-window clearance to get environment clearance, time-bound processing of mining leases and land acquisition, Bhattacharya said.

“International miners like BHP Billiton and Rio Tinto will be interested. But they will want to see transparency and a clear decision-making process,” he noted.

The demand-supply gap

The policy decision comes at a time when India is one of the few remaining markets where demand for coal has not peaked. Even though India has one of the world’s largest coal reserves in the world at 350 billion tonnes, it still imported about 235 million tonnes of coal last year. Demand for coal was 965 MT, and India produced only 730 MT locally.

“This despite CIL’s production and capacity growing at a healthy rate.
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This gap can be made up only through the participation of foreign players,” said Bhattacharya. In FY2019, Coal India produced 607 MT of coal, registering a growth of seven percent.

“We are talking about 20 billion tonnes of reserves that need to be auctioned immediately. Of this, six billion tonnes should have been auctioned yesterday…that is the kind of urgency that is needed,” he said.

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