The euphoric rise of the power sector was marred by the coal mining scam, dampening of the general sentiment while painting a bleak picture of the Indian business environment. But, things will not remain as it was since energy is essential for the country. Purnendu Chaubey takes an analytical review on how the things are shaping up beyond Coal Gate.The growth of any economy and its global competitiveness hinges greatly on the availability of reliable and quality power at affordable prices. India, despite its burgeoning economy faces the arduous task of meeting the ever increasing power demands with the gulf between demand and supply widening. Large capacity additions have been planned in recent times to bridge this gap. the Government of India initially set a very ambitious target of adding 1,00,000 MW during the 12th Plan which was then brought down to 88,000 MW to make this goal realistic and pragmatic. While there have already been efforts to have a diverse portfolio of fuel options in power generation, coal continues to remain the primary source of fuel responsible for more than three quarters of the India electricity needs.About 70 per cent of India's own coal production of about 600 million tonne is already utilised for power generation. As per the long term assessment made in the Integrated Energy Policy document, the coal demand is likely to rise to 840 million tonne by the end of 12th Plan, 1,430 million tonne by 2027 and to 2,020 million tonne by 2032. There is a wide spread fear that this enhanced requirement of coal would not be met by coal companies due to resources and other constraints.The recent scam with respect to the allotment of coal blocks that shook the nation and instilled a sense of shock and awe among many onlookers.The euphoric rise of the power sector was marred by the coal mining scam, dampening the general sentiment while painting a bleak picture of the Indian business environment. But, things will not remain as they were since energy is pivotal to the country's success at the global stage . The ambitious goals with respect to the capacity addition faced a stumbling block because of uncertainty surrounding the coal.The CAG report on Performance Audit of Allocation of Coal Blocks and Augmentation of Coal Production believes that as a result of the delay in introducing competitive bidding process, there has been a loss of Rs 1.86 lakh crore to the Government of India. It has arrived at the estimates based on the average cost of production and average sale price of opencast mines of Coal India (CIL) in the year 2010-11.The CAG in its report names 25 companies including Essar Power, Hindalco, Tata Steel, Tata Power and Jindal Steel and Power which have got the blocks in various states. "A part of this financial gain could have accrued to the national exchequer by operationalising the decision taken years earlier to introduce competitive bidding for allocation of coal blocks," CAG said.The de-reservation of 48 blocks of coal and allocating them to captive consumers was a move forumated by the Ministry of Coal to increase production but the move did not yield the desired results (till now) since production has not started quite yet in these blocks. In fact, captive coal mining is a mechanism envisaged to encourage private sector participation in coal mining. However, the production of coal from captive mining has not been encouraging instead of the intended 73.00 million tonne from such blocks during 2010-11 only 34.64 million tonne of coal could be produced.The current status of coal blocks may be illustrated by the following representation:The Screening Committee recommended the allocation of a coal block by way of minutes of the meeting of Screening Committee. The minutes did not give any evidence of a comparative method that would have been used to allot the coal blocks and did not indicate the methodology used to evaluate each of the applicants. Thus, the method followed was not transparent. Although the concept of competitive bidding for coal blocks was first introduced on June 28, 2004, the exact procedure to be followed for competitive bidding is yet to be finalised.The auditing body said it is "of the strong opinion that there is a need for a strict regulatory and monitoring mechanism to ensure that benefist of cheaper coal is passed on to consumers".The CAG recommended that:
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