The Niti Aayog has recommended, in the draft of a new energy policy, that the seven units of state-controlled Coal India Ltd be split into independent companies to make them more competitive, Reuters reported on Wednesday.
“We must corporatise the seven subsidiaries of CIL into independent companies and allow them to compete against one another in an open coal market,” said the Draft Energy Policy report, according to Business Standard.
The government think tank has proposed that fresh coal production in India should come from private sector mines. It also called for reforms in allocating coal blocks to independent companies specialising in coal mining. The splitting up of Coal India and change in the system of allocating coal blocks will reduce prices, the Niti Aayog said, and make India a net exporter of coal.
Coal India officials were not available for comment on Niti Aayog’s proposal. However, Baij Nath Rai, president of Bharatiya Mazdoor Sangh [the labour wing of the Rashtriya Swayamsevak Sangh] said that the union was opposed to the proposals.
The proposal to split up Coal India was made earlier in 2014, but the government backed down because of union protests.
Niti Aayog has also recommended the separation of the ownership of the power distribution companies from the respective state governments. “It needs to be ensured that that electricity distribution is subject to commercial pressure. This can be achieved by separating the distribution of electricity from ownership of the distribution grid,” said the report. This, it said, would give the consumer freedom to choose their electricity distributor as a result of market competition between distributors.
But the India Energy Security Scenario, an in-house tool of the Draft Energy Policy, has predicted that renewable technologies, storage solutions, smart grids and knowledgeable consumers will dominate the Indian market in future.