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Modi’s coal test

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Modi’s coal test Empty Modi’s coal test

Post by confuzzled dude Fri Oct 17, 2014 5:40 pm

India has the world’s third-largest coal reserves but is a net importer. As the columnist Swaminathan Aiyar wrote in The Times of India, “This is the equivalent of Kuwait importing oil.” Despite a 20 per cent increase in coal imports in September, stocks at 37 of 103 thermal power plants early this month were at “super-critical” levels – down to three days’ supply or less – according to the Central Electricity Authority.
The allocation of captive coal blocks was a compromise born from the political difficulty of denationalizing coal mining (the sector was nationalized in 1972-73 and captive mining was permitted in 1993). Trade unions and interest groups have since April 2000 blocked a bill to deregulate the coal sector.

A combination of revelations of cronyism in the coal block allocations and the BJP’s majority in the Lok Sabha, the lower house of the parliament, have created the best opportunity for structural reform in this sector in a generation.
The good news is that the Modi government is in a much stronger position than its predecessor to push through fundamental reform of the distorted coal market, and the crisis has created an opportunity the Prime Minister can grasp. Yet excessive centralization of policy making in Modi’s office is already generating a policy backlog. This is somewhat understandable because of his commitments elsewhere, but it also demonstrates that a system of lightweight ministries overseen by a strong prime minister’s office has its own shortcomings, even if it is more efficient than the previous government’s indecisive approach.
http://blogs.ft.com/beyond-brics/2014/10/17/guest-post-modis-coal-test/

confuzzled dude

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