Previous Year Question
Consider the following statements:
Coal sector was nationalised by the Government of India under Indira Gandhi.
Now, coal blocks are allocated on lottery basis.
Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production.
Which of the statements given above is/are correct?
1 only
2 and 3
3 only
1, 2 and 3
Correct Answer: A
Detailed Solution
Statement 1 is correct.
Coal mines in India were nationalised in stages during the prime ministership of Indira Gandhi.
The process of taking over coking-coal mines began in 1971.
Coking-coal mines were nationalised through the Coking Coal Mines (Nationalisation) Act, 1972.
Non-coking coal mines were subsequently nationalised through the Coal Mines (Nationalisation) Act, 1973.
Coal India Limited was established in 1975 to consolidate public-sector coal companies.
Nationalisation sought to facilitate planned development of coal resources, improve working conditions and secure coal supplies for the power and steel sectors.
Statement 2 is incorrect.
Coal blocks are not allocated through a lottery. Under the Coal Mines (Special Provisions) Act, 2015 and the associated rules, coal blocks are primarily awarded through:
Competitive auction, or
Allotment to specified government entities.
Under competitive bidding, eligible entities submit bids according to the prescribed framework. The auction mechanism was intended to replace discretionary administrative allocation with a transparent process.
Statement 3 is incorrect.
India had not become self-sufficient in coal production during the period relevant to the question. In 2018-19, India imported approximately 235 million tonnes of coal, while domestic coal production was about 729 million tonnes.
India continued to import coal because:
Demand from power and industry could exceed domestic availability.
The quality and calorific value of domestic coal were not suitable for every application.
The steel industry required high-grade coking coal, which was not sufficiently available domestically.
Certain coastal power plants had been designed to use imported coal.
Transportation and supply constraints persisted despite domestic production.
Higher domestic production therefore did not amount to complete self-sufficiency.