The recent decision of Supreme court to cancel all coal mine allocations since 1993 is a bit unfortunate. This decision will have an adverse effect on already somnolent economy. The total investment in projects that use coal from the illegally allocated mines is estimated to be close to 4 lakh crore. If this investment turns infructuous then the companies will turn belly up along with their parent industrial houses. The banks, which lent them money will incur huge losses and they would stop lending money to other sectors thus stalling economic growth. The most pragmatic approach for the apex court would be to identify those allocations where follow up investments have been made. These allocations should be given a legal status. The court can cancel allocations where no investments have been made and mining not yet started. Coal is the vital source of energy in the country. It is the main driver of industries like power, cement and steel. If its supply is hindered then we are looking at a major disaster and economic growth would come to a grinding halt. The court should also admonish Coal India Limited for its below par performance. CIL is clearly not capable in meeting the demands of the industry. It is still employing obsolete technique and equipment to mine coal. CIL needs to increase its efficiency and output. We hope the court would keep these ramifications in mind while delivering its judgement today.
Posted on: Mon, 01 Sep 2014 08:15:43 +0000
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