Following the 2014 Supreme Court judgement cancelling allocations of 204 coal blocks, the Government of India had promulgated the Coal Mines (Special Provisions) Act in March 2015 and also allocated over 60 coal blocks for captive use in various sectors. The Government hoped to achieve a few important objectives through the allocation process, such as minimal disruption to production from captive blocks, rich revenue stream to states, reduction in electricity tariffs, and enhancement in transparency and competition.
Prayas (Energy Group) recently undertook a review of the status of captive coal blocks that were allocated with a view to assessing the achievements of the government’s stated objectives. The review findings are captured in a brief note. It concludes that most of the government’s objectives in allocating blocks have not been realized. This, together with the possibility of tempered demand for coal, calls for a different and more deliberative approach to the sector.