India's step-by-step coal reforms

INDIAN Prime Minister Narenda Modi’s steely resolution to implement step-by-step reform across his country’s coal sector to safeguard energy security continues, but his vision is not shared by all – most notably the unions.
India's step-by-step coal reforms India's step-by-step coal reforms India's step-by-step coal reforms India's step-by-step coal reforms India's step-by-step coal reforms

The flag of India

Anthony Barich

Modi, the leader of the right-wing Bharatiya Janata Party (BJP) which has been in power since May, previously served as the Chief Minister of Gujarat state from 2001-2014 and is expected by many to unlock the economic potential of India.

His sweeping changes are set to include reducing red-tape, making India more business-friendly and investing in new transport and energy infrastructure, a prerequisite for large scale industrial development.

At the end of last year Modi’s government signed an executive order that included a provision to allow the government to end the state monopoly on mining and selling of coal.

“While analysts consider the move crucial to boosting coal output, unions fear it could lead to job losses,” former World Coal Association policy manager Aleks Tomczak said.

The beginning of 2015 saw one of the largest strikes by coal miners India has ever seen, resulting in half of the production and shipments of Coal India being shut down.

“Although many are tempted to draw parallels with the miners’ strikes in the UK, local experts argue that Narenda Modi and his government are much more likely to take the reform of the coal sector in India step-by-step in order to ensure that energy security is not compromised,” Tomczak said.

The PM showed his determination last December when he resorted to a rarely-used executive to implement coal and insurance reforms.

"The ordinances demonstrate the firm commitment and the determination of this government to reform," Finance Minister Arun Jaitley told reporters after a meeting of the cabinet.

"It also announces to the rest of the world including investors that this country can no longer wait even if one of the houses of parliament waits indefinitely to take up its agenda."

However, stubbornness tends to breed further stubbornness, with the bill to cement the executive order into law stalled in parliament in December, forcing the federal cabinet to renew it the next day.

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