Go-no go coal mining tags may go, but is govt doing enough?

As was widely expected, Jayanthi Natarajan, the Union environment minister, has promised to scrap the “go-no go” classification for coal blocks. This means, no longer will the government dismiss an application for mining without even looking at it just because it comes under the no-go area. Now, the ministry plans to look at mining licences and permissions on a case by case basis. Some areas might, however, be put out of reach for miners due to environmental concerns.

The group of ministers that met on Tuesday also stipulated that those which have extended their total mining area to 25 percent can do away with public hearing. But the proposal that 50 percent quorum in public hearing required for forest clearance would be diluted has not been taken well by V Kishore Chandra Deo, the tribal affairs minister.

None of the individual cases of mines on hold were discussed and will only be taken up in the next meeting. Coal India is trading higher at more than 1 percent. NTPC is also up 0.5 percent in a flat Sensex. But it’s yet not time to party!

So, what is on the government’s mind? There is no such thing as no-go area. This means all mining proposals will be considered. That’s it. It still does not mean that all proposals will be approved. But worse than that is the news that the government will look at each case individually.

Unless there is a timeframe fixed for passing or dismissing each case, there could be delays in permission. JP Morgan writes after the decision that the case by case approach is a small step forward and no giant leap. It says, “While a potential go/no-go abolition is the first step towards increasing domestic coal production, without a time-bound approval process, removing the classification in itself is unlikely to solve the coal deficit issues in India in coming years.”

The report also points out that there is no clarity on environmental restrictions called CEPI norms which have been imposed in Korba and Chandrapur mines of Coal India. Media reports suggest these might not be removed any time soon.

Coal India’s annual report further says its production grew at 4.4 percent compound rate from 2008-11 against a plan for 5.6 percent growth in the 10th Plan. The Planning Commission says the power sector could have lost 1,43,000 mw of power due to this environmental policy. Though the decision to remove the no-go classification is welcome, policy signals on this coming from the ministry level meeting seem to be a case of too little, too late.