Apex chambers of commerce and industry, on Wednesday, expressed apprehension over the Supreme Court order cancelling all but four coal block licences allocated since 1993, with major industry bodies predicting erosion of investor confidence and an increase in the country’s import bill.
The Federation of Indian Chambers of Commerce and Industry expressed the hope that the SC verdict would be “quickly followed” up by the government constituting a framework to reallocate the cancelled blocks on the principles of transparent allocation and competitive bidding.
FICCI President Sidharth Birla hoped that the decision would act as a precursor to a review of coal sector policy paving the way for full-fledged coal reforms starting with amendment in Coal Mines Nationalisation Act, 1973, and Mine Minerals (Development and Regulation) Act, 1957, to facilitate entry of private entities in coal exploration and mining.
“The cancellation of coal blocks involves significant investments and will obviously impact the economy and investment climate, therefore, a quick response from the government will help allay the apprehensions,” said Mr. Birla.
The Confederation of Indian Industry said the judgment had created uncertainty and would likely impact key sectors including steel, mining and power. The power sector, the largest consumer of coal, it said, would be particularly affected owing to shortage of fuel.
“While the judgement may have been intended to bring in transparency, it will jeopardise the investments made in the sector. It will raise questions on sanctity of government policies impacting the investment climate,” CII President Ajay Shriram said, reacting to the judgment.
“A bit harsh”Terming the judgment “a bit harsh”, Associated Chambers of Commerce and Industry of India (Assocham) said it would lead to increased imports. “Our main concern is…the…negative impact on the economy which has just been showing signs of recovery after over two years of slowdown,” Assocham President Rana Kapoor said.
