Energy crisis and coalgate scam

There is a crippling energy crisis in India .This is a sorry state of affairs,especially in the context, that nearly one third of the nation's population has no access to electricity .The gap between supply and demand is ever increasing.The most worrying factor is the deficit in power supply is continously increasing.It is estimated the power demand in the nation is increasing every year by over 10  per cent..Recently in last July ,over 300 million people in 8 North Indian states had to face an unprecedented black out.This power black out created bedlam and disrupted railways and hospitals across these states .India's predominantt energy source is thermal. This sector is badly affected by coal shortage.This is  a knotty issue .Resolving this issue requires political will,capable leadership,vision and clarity on policies.Above all we need a system that does not feed unscrupulous elements to make money out of every deal.The demand for coal is around 650 million tonnes .But Coal India Produces only 538 million tonnes of coal.Because of the shortage of coal,most of the power generating companies are functioning at half the capacity.Prime Minister's office made Coal India to sign Fuel supply agreements with power generating companies,so that it would supply atleast 80 % of their coal requirement .It was beleived this mandatory condition would force Coal India to go for imports and would meet its contractual obligation.But look at the wisdom of Coal India.Coal India suggested a 0.01 per cent penalty for not delivering coal in time and the penalty would become applicable after 3 years of signing the agreement.Coal India is hesitant to import coal to meet the rising demands,because Coal India wants the consumers to bear the brunt of the increased cost of coal likely due to imports.

On one side the government is worried about the slow economic growth.But it is  due to a cascading effect of the power shortage.The coal shortage has hit not only the  existing power generation companies, but also new power generation projects that are supposed to augment the power situation in the country are also put on hold in many states due to coal shortage.On one side the power industry is screaming for fuel shortage.On the other side,most of the coal blocks allotted in the last eight years have not mined a single gram of coal.To enhance the production of coal,government allotted coal blocks to private companies.But the CAG report says the loss to the government by not allocating coal blocks through competitive bidding is 1.86 lakh crores.Coal blocks were allotted based on the recommendations of a screening committee.As usual government's defense is it is a notional loss,since not even a single gram of coal has been mined .Mr.Chidambaram said the coal is still with "Mother Earth" .It is a shameful defense .When the country is reeling under severe power crisis,due to insufficient supply of coal,how could a responsible minister take solace from the fact that not even a single gram of coal has been mined .Does it not loudly proclaim the inefficiencies of those in power and at the helm of affairs.It is also a fact that Coal block allottees have sold their mines to other companies and made money.some companies have added the coal mines to their list of assets.This would enhance their borrowing capacity from banks.Coal blocks were not acquired by these companies for the purpose of mining coal.Many nationalized banks have allotted huge loans to these companies. This makes the government hesitant to cancel the allotments .Because ,this in turn would affect another Public sector enterprise.It is alleged some media companies are also involved in this malpractice.

The irony is India holds the fifth largest coal reserve in the world and is not able to meet the domestic coal demands.Chattisgarh, Orissa, Jharkhand and West Bengal account for nearly 80 % the Indian coal reserves. Nearly 70 % of our coal production is used by the power industry .Remaining is used by Steel,cement and fertilizer industries.There is no co ordination between government departments .They work at cross purposes . Several private licencees of captive mines could not start production,since environment clearance is denied to them.Similarly there are problems in coal mining related to land acquisition, forest and environmental clearances.In areas under Naxal control,illicit mining is also reported.This is done to fund their operations.

There are lot of challenges ahead,if India is to come out of the power crisis that dampens the economic growth.The political leadership should take some stern and tough decisions to tide over the crisis.Else this could turn out to be a major setback for India's overall progress in many other diverse fields.