Will coal block cancellation affect the country negatively?
Will coal block cancellation affect the country negatively?
Supreme Court in a historical judgment cancelled the coal blocks allotted since 1993. There has been a hue and cry across the industrial sectors because as per this camp the decision will have far reaching impact on the Indian economy. Government had already conveyed its decision to court that it has no problems with the cancellation. As a general citizen, what is your opinion about this?
For:
-Cancellation in such a large number (214 out of 218 got cancelled); question marks the credibility of government in allocation of natural resources.
-Already, thermal plants are facing acute shortage of coal and any interruption in coal supply will accentuate the power crunch.
-Financial sector too feels the heat as many banks are exposed to companies, which took hefty loans to invest capital in allotted coal blocks development. The fate of this investment is
not yet clear.
-This decision will jeopardize the foreign investment in coal as well as steel and iron industries.
-Disruption in supply will force government to import coal which further increases the import bill and current account deficit.
Against:
-The Court mentioned clearly that natural resources belong to the people not industries. So it has every right to cancel the allocation if proper allocation process has not been followed.
-Many companies were not even eligible for bidding, still they got coal blocks. This reflects their involvement in the whole scam.
-Court has not forbidden mining in the already developed blocks ensuring proper supply.
-Government will now be forced to follow a transparent process of bidding, which gives every investor a fair chance in future bidding.
-Contrary to belief foreign investors will get motivation to invest more in the country, as the decision will erode their apprehensions about corruption and non transparency in the country.
Conclusion:
Though the decision can create short term panic among coal and associated industries, but in long term this decision will have a positive impact on the economy. Also, fair and transparent practices in allocation are deemed as part of good governance. India requires inculcation of these attributes in governance and the court has given its node by this decision.
Discussion
- RE: Will coal block cancellation affect the country negatively? -Deepa Kaushik (09/26/14)
- Coal block cancellation by the Supreme Court is definitely a big decision to be foreseen. This has created turmoil amongst the big industries who have invested on the coal blocks. The government is left with no other option than to accept this act of cancellation as they have already hyped their transparency in governance.
The coal block cancellation is an initiative towards the end of the corrupt and malpractices in bidding and retaining the coal blocks. Having lot many inappropriate industries having a portion of cut in the coal block is already the indication for the unfair play during the allocation. Any new reform would be started with a turmoil, followed by agitation, but would eventually get on to the track. The acceptance for the new theory amongst the masses is nothing new, and change is the only constant in the living world.
The more transparent the allocation process, more would be the chances of foreign investment which would definitely be a boost to the economic development. Foreign investment will also open up doors for the transparent play in other sectors. Regarding the power supply, the court has not cut down the already allocated coal blocks which would ensure the power supply as per the existing demand.
To be precise, the coal block cancellation is a motivating step by the Supreme Court towards the transparent governance and allocations. This could only have the best possible positive impacts on the long run.
