Coal mining: Centre dumps ‘go, no-go’, dubs it illegal

Less than two years after splitting coal mining zones into ‘go and no-go’ — a move that has stalled almost every big-ticket coal mining project in India — the government is scrapping the policy.

The Ministry of Environment and Forest (MoEF), which had framed the policy guidelines along with the Ministry of Coal, on Tuesday accepted that the categorisation of ‘go and no-go’ did not have any legal sanctity.

The move was expected after Jayanti Natarajan was given charge of the MoEF, replacing Jairam Ramesh, whose brainchild the policy was.

“Had this happened in any other country, the government would have been sued left, right and centre for loss in business and opportunity cost, now that there is a mea culpa,” said an analyst who tracks the resources sector with a foreign brokerage. “India has unnecessarily lost two years of crucial productivity gains and also fixed capital formation opportunities.”

In a meeting of group of ministers’, Natarajan acceded to the recommendations of the BK Chaturvedi Committee, which said forest clearances should be based on the Forest Clearance Act instead of a go and no-go policy. The panel had argued that the go, no-go policy had no legal sanctity and projects cannot be cleared or barred based on its guidelines.

According to a source present at the meeting, Natarajan said she was ready to take up projects on a case-to-case basis, and in future no project would be judged on the basis of the policy guidelines drawn by Jairam Ramesh.

“Give me everything in writing,” finance minister Pranab Mukherjee told Natarajan towards the end of the meeting, one person said.
The group of ministers was formed in February this year, after the ministries of power, coal and steel came together to protest against the ‘no-go’ policy.

After the classification, around 203 coal blocks with reserves of over 600 million tonne in nine major coalfields had been barred from any mining activity. These included many mines belonging to Coal India Ltd. Corporate majors Essar and Hindalco were barred from mining in the Mahan block for their projects, while KSK Energy could not mine in  the Morga II block in the Hasdeo Arand coalfield in Chhattisgarh. Both these blocks are located in densely forested areas and  are also among the eight blocks suggested for forest clearance by the committee set up by the Prime Minister’s Office, headed by T K A Nair, principal secretary to the Prime Minister.

According to Planning Commission data, the power sector alone was losing potential production of 143,000 mw of power due to the MoEF policy.

The group of ministers also constituted a committee under Planning Commission member Chaturvedi to resolve the issue of NTPC’s North Karanpura power plant, which falls in a coal bearing area in Jharkhand.

While the coal ministry has been arguing in favour of relocating the proposed 1980 mw plant, the power ministry has been opposing the move, following which the matter was referred to the ministerial panel earlier this year.