Hyderabad: Stating that the country’s energy security is under threat, Federation of Indian Chambers of Commerce and Industry (FICCI) today said the Government should take steps to end the monopoly of Coal India and allow private players in coal mining.
FICCI president RV Kanoria, who was here to attend the executive committee meeting of the industry body, said, “Coal exploration has to be accelerated. Private players should be allowed in coal mining to create healthy competition.”
He said that FICCI has suggested that the Government should reduce its stake in PSUs to less than 50 per cent which would be sufficient enough for it to be part of all major decision making processes in the company but at the same time would help make PSUs observe basic market discipline.
He said during the 12th five year plan, import dependence for petroleum products is likely to be as high as 80 percent while for coal, it would be 28 percent. “As regards coal, today our imports are 15 per cent. By the end of the 12th plan, imports are going to be 28 per cent,” he said, adding currently power plants with 22,000 MW capacity are suffering due to lack of availability of coal.
Criticising the tariff structure, he said distribution sector is the weakest link in the power sector and retail tariffs are irrational. “Cross-subsidies prevail among consumer categories due to populism which leads to virtually giving free power for the agricultural sector. Revision of tariff is often guided by political pressures than economic reasons. Rationalisation of tariff for industry by reducing the gap between industry and domestic tariff is necessary,” he observed.
As regards natural gas, the FICCI president said the development of natural gas industry in India was being stymied by distortions in pricing mechanism. According to him, the share of natural gas in the overall energy mix is only 10 percent against the global average of 24 percent.