The document discusses the evolution of the coal sector in India from pre-independence to post-independence. It covers key events like the formation of major coal companies and nationalization of the coal industry. The coal sector was nationalized in two phases in 1971-72 and 1973 to address issues like fragmentation and lack of investment. This led to the formation of major public sector companies like Coal India Limited, which now dominates coal production through its several subsidiaries. Reforms in the coal sector since 1993 have allowed captive coal mining by private and public sectors.

1. Coal Sector Evolution In India
Industry Information Insights 2014

2. Table of Contents
Introduction
Pre-Independence Era
Formation of SCCL
Post-Independence Era
Formation of NCDC
Nationalization of Coal Mines
Formation of CMAL
Formation of CIL
Reforms in Coal Sector
Reforms in Coal Sector
Captive Coal Mining, 1993
Coal Mines (Nationalisation) Amendment Bill, 2000
New Coal Distribution Policy, 2007
Auction by Competitive Bidding of Coal Mines Rules, 2012
Coal Regulatory Authority Bill, 2013

3. Introduction
History of Coal Sector (Before Nationalization)
Summer & Heatley applied to EIC to mine coal
1774
1843
Bengal Coal Company Limited Registered
Introduction of steam locomotives
1853
1900
Coal Production at 6 MTPA
Formation of SCCL
1945
1956
NCDC came into existence

4. Introduction
History of Coal Sector (After Nationalization)
Formation of BCCL
1971
1973
Nationalisation of coal mines
BCCL, NCDC and CMAL merged to CIL
1975
1985
NCL and SECL from CCL and WCL
Creation of MCL from SECL
1992

5. Introduction
Important Legislations in Indian Coal Sector
1973
Coal Mines Nationalisation Act
1993
Captive Coal Mining Allowed
2000
Coal Mines Nationalisation Amendment Bill
2007
New Coal Distribution Policy
2013
Coal Regulatory Authority Bill

6. Introduction
CoalisthemostabundantfuelresourceinIndia.Itistheprimesourceofenergyandperhapsthelargestcontributortotheindustrialgrowthofthecountry.
CoalmininginIndiahasalonghistoryofcommercialexploitationcoveringnearly240yearsatplacesclosetocoalregionsintheeasternpartofthecountry.
In1774,Summer&HeatleyappliedtotheEastIndiaCompanytoraisecoalinRaniganjcoalfieldalongtheWesternbankofriverDamodar.However,coalmineddidnotreceiveadequateattentionduetoitsinferiorqualityascomparedtoBritishcoal.

7. Pre-Independence Era
TheabolitionofmonopolyofEastIndiaCompanyin1813pavedthewayforrapiddevelopmentofprivatecommercialenterprises.Thefirstjointstockcoalcompany,BengalCoalCompanyLimited,wasregisteredin1843.
Fromalevelofoutputofonlyabout400tonnesperannumduringtheperiod1815-1823,itreachedalevelof91,000tonnesduring1846.Bythistimedemandofcoalwaspickingupduetointroductionofsteamengines.CoalminingactivitiesreceivedarenewedthrustwiththesettingupofaraillinkbetweenHowraandRaniganjin1853.
After1774,foraboutacenturythegrowthofIndiancoalminingremainedsluggishforwantofdemandbuttheintroductionofsteamlocomotivesin1853gaveaboosttoit.Withinashortspan,productionrosetoanannualaverageof1milliontonneandIndiawasproducingabout6milliontonnesofcoalperyearby1900and18milliontonnesperyearby1920.

8. Pre-Independence Era
TheproductiongotasuddenboostfromtheFirstWorldWarbutwentthroughaslumpintheearlythirties.Theproductionreachedalevelof29milliontonnesby1942and30milliontonnesby1946.
Since1920,anumberofcommissionsandcommitteesmadeobservationsonthequestionofconservationofcoal,safetyofmines,etc.whichledtointroductionofregulationsandcontrolofthecoalindustryinIndia.

9. Formation of SCCL
In1945,theSingareniCollieriesCompanyLimited(SCCL)becamethefirstGovernmentownedcoalcompanyinIndia.InthatyearGovernmentofNizamofHyderabadboughtallthesharesthecompanyandbroughtthecompanyunderIndiaTrustFundoftheNizamGovernment.
Thecompanyactuallystartedproductionin1889atYellanduareaofpresentAndhraPradeshandsixtythousandtonnesofcoalwasproducedinthatyear. .

10. Post-Independence Era
AfterIndependence,thecountryembarkeduponthefive-yeardevelopmentplanstoimproveeconomicconditionofthepeople.AtthebeginningofthefirstPlan,annualproductionwentupto33milliontonnes.
DuringthefirstPlanperioditself,theneedforincreasingcoalproductionefficientlybysystematicandscientificdevelopmentofthecoalindustrywasbeingfelt.

11. Formation of NCDC
In1956,NationalCoalDevelopmentCorporation(NCDC)cameintoexistenceinthepublicsectorasGovernment-ownedCompanyinpursuanceoftheIndustrialPolicyResolutionsof1948and1956oftheGovernmentofIndia.Itwasstartedwithanucleusof11oldstatecollieries(ownedbytheRailways)withtotalannualproductionof2.9milliontonnesofcoal. ThiswasthefirstmajorsteptowardsplanneddevelopmentofIndiancoalsector.
Fromitsverybeginning,NCDCaddresseditselftothetaskofincreasingcoalproductionanddevelopingnewcoalresources,besidesintroducingmodernandscientifictechniquesofcoalmining.
AlongwiththeSingareniCollieriesCompanyLimited(SCCL)whichwasalreadyinoperationsince1945andwhichbecameaGovernmentcompanyunderthecontrolofGovernmentofAndhraPradeshin1956,IndiahadtwoGovernmentcoalcompaniesatthattime.SCCLisnowajointundertakingofGovernmentofAndhraPradeshandGovernmentofIndiasharingitsequityintheratioof51:49.

12. Performance of NCDC
IntheSecondFiveYearPlan(1956-1961),NCDCincreasedcoalproductionfromnewcollieriesbyopeningminesmainlyinareasawayfromthealreadydevelopedRaniganjandJhariacoalfields.Eightnewcollierieswereopenedduringthisperiodandtheproductionincreasedto8.05milliontonnesbytheendofSecondPlan.
DuringtheThirdFiveYearPlan(1961-1966),NCDChadbuiltupalargerproductioncapacity;howeveritcouldnotbeutilizedduetoasluggishdomesticcoaldemand.Therefore, theproductionhadtobedecreasedwiththesuspensionofthedevelopmentofseveralcollieries.Bythistime,thecontributionofNCDCtotheIndia’scoalproduction(67.72milliontonnes)increasedtoabout9.6milliontonnes.
Withgradualriseinthedemandofcoalduetocommissioningofnewpowerplantsanddevelopmentofothercoal-basedindustriesduringtheFourthFiveYearPlan(1969-1974), NCDC’sproductionincreasedto15.55milliontonnesbytheterminalyearofFourthFiveYearPlan(1973-74).

13. Nationalization of Coal Mines
Rightfromitsgenesis,thecommercialcoalmininginmoderntimesinIndiahasbeendictatedbytheneedsofthedomesticconsumption.Onaccountofthegrowingneedsofthesteelindustry,athrusthadtobegivenonsystematicexploitationofcokingcoalreservesinJhariaCoalfield.
ReasonsforNationalizationofCoalIndustry
Thefragmentationoftheholdings,unsafeminingconditions,andinadequatecapitalinvestmenthadresultedindeteriorationofthecoalindustrytosuchanextentthatthemineswerenotamenabletoanyscientificexploitationandmanagement.Theindustryrequiredheavyinvestmentstomeetthegrowingrequirementsofthenation.
In1951theWorkingPartyforthecoalIndustrywassetupwhichincludedrepresentativesfromcoalindustry,laborunionsandthegovernment.Theworkinggroupsuggestedtheamalgamationofsmallandfragmentedproducingunits.Facedwiththesecircumstances,theGovernmenttookovertheentirecoalindustryin1971and1973.

14. Nationalization of Coal Mines
ProcedureforNationalization
Adequatecapitalinvestmenttomeettheburgeoningenergyneedsofthecountrywasnotforthcomingfromtheprivatecoalmineowners.UnscientificminingpracticesadoptedbysomeofthemandpoorworkingconditionsoflaborinsomeoftheprivatecoalminesweresomeofthemajorconcernsfortheGovernment.
Onaccountofthesereasons,theCentralGovernmenttookadecisiontonationalizetheprivatecoalmines.Thenationalizationwasdoneintwophases,thefirstwiththecokingcoalminesin1971-72andthenwiththenon-cokingcoalminesin1973.

15. Nationalization of Coal Mines
Inthefirstphase,theCokingCoalMines(EmergencyProvisions)Act,1971providedfortakingoverinpublicinterestofthemanagementofcokingcoalminesandcokeovenplantspendingnationalization.ThiswasfollowedbytheCokingCoalMines(Nationalisation)Act, 1972underwhichthecokingcoalminesandthecokeovenplantsotherthanthosewiththeTataIron&SteelCompanyLimitedandIndianIron&SteelCompanyLimited,werenationalizedandbroughtundertheBharatCokingCoalLimited(BCCL),anewCentralGovernmentUndertaking.
TheCoalMines(TakingoverofManagement)Act,1973,extendedtherightoftheGovernmentofIndiatotakeoverthemanagementofthecokingandnon-cokingcoalminesinsevenStatesincludingthecokingcoalminestakenoverin1971.

16. Formation of CMAL
Inthesecondphaseofnationalization,bypromulgationoftheCoalMines(TakingoverofManagement)Ordinance,1973on31stJanuary1973,theCentralGovernmenttookoverthemanagementofall711non-cokingcollieriesandinnextphaseofnationalization,thesemineswerenationalizedwitheffectfrom1stMay1973.ApublicsectorcompanynamelyCoalMinesAuthorityLimited(CMAL)wasformedtomanagethesenon-cokingcoalmines.
ThiswasfollowedbythenationalizationofallthesemineswiththeenactmentoftheCoalMines(Nationalisation)Act,1973whichisatpresenttheCentrallegislationdeterminingtheeligibilityofcoalmininginIndia.
AlthoughpublicsectorminingcompaniesincoalsectoralsoexistedintheformofSingareniCollieriesCompanyLimited(SCCL)andNCDC,shareoftheseearlystatesectorundertakingswasonly26.3%ofthetotalcoalproductionatthetimeofnationalisation.Thus, thegovernmenttookover214cokingcoalminesinOctober,1971leadingtotheformationoftheBharatCokingCoalLimited(BCCL),followedbytakeoverofmorethan700minesinnon-cokingcoalsectorinJanuary,1973.

17. Formation of CIL
BCCL(BharatCokingCoalLimited),NCDC(NationalCoalDevelopmentCorporation)andCMAL(CoalMinesAuthorityLimited)mergedtoconstituteCoalIndiaLimited(CIL),withheadquartersatKolkata,in1975asholdingcompanyoffivesubsidiarycompanies.
1.EasternCoalfieldLimited(ECL)
2.BharatCokingCoalLimited(BCCL)
3.CentralCoalfieldsLimited(CCL)
4.WesternCoalfieldsLimited(WCL)
5.CentralMinePlanning&DesignInstituteLimited(CMPDIL)
Subsequently,twomoresubsidiaries-NorthernCoalfieldsLimited(NCL)andSouthEasternCoalfieldsLimited(SECL)werecarvedoutwitheffectfrom28thNovember,1985ofthethenCCLandWCLrespectivelyforpropermanagementoftheprojectedincreaseinproductionandinvestmentplanned.

18. Formation of CIL
Further,consideringtheprospectsofOrissaCoalfieldsineighthandninthplanperiods, MahanadiCoalfieldsLimited(MCL)wascarvedoutofSECLon3rdApril,1992tomanageallthecollieriesinthestateofOrissa.
ThusCILhasnoweightsubsidiariesoutofwhichCMPDILisanengineering,designandexplorationcompanyforpreparingperspectiveplans,renderingconsultancyservicesandundertakingexplorationanddrillingworkforestablishingcoalreservesinIndia,collectionofdetaileddataforformulationofprojectreportsforactualmining.
TheothersevensubsidiariesofCILarecoalproducingcompanies.ThecoalminesofAssamanditsneighboringareasarecontrolleddirectlybyCILundertheunitnamedasNorthEasternCoalfields.

19. Reforms in Coal Sector
Captive Coal Mining, 1993
TheCoalMines(Nationalization)Act,1973wasamendedinJune1993toallowcoalminingbybothprivateandpublicsectorforcaptiveconsumptionforproductionofironandsteel, generationofpower,washingofcoalobtainedfromamineandotherend-use,whichwouldbenotifiedbytheGovernmentfromtimetotime.
CoalMines(Nationalisation)AmendmentBill,2000
ItwasintroducedintheRajyaSabhaon26April,2000inordertocarryoutnecessaryamendmentstotheCoalMines(Nationalisation)Act,1973toallowIndiancompaniestominecoalandlignitewithoutrestrictionofcaptiveconsumptionandtoallowtheIndiancompaniesinthepublicandprivatesectortoundertakeexplorationofcoalandligniteresourcesinIndia.

20. Reforms in Coal Sector
New Coal Distribution Policy, 2007
InOctober2007,theMinistryofCoalissuedtheNewCoalDistributionPolicytoregulatethedistributionofcoal.Thispolicydispensedwiththeclassificationofconsumersofcoalinto‘core’and‘non-core’sectorsandinsteadtreatedeachnewconsumeronmerit.
AuctionbyCompetitiveBiddingofCoalMinesRules,2012
TheCentralGovernmentintroducedRulesundertheMines&Minerals(Development& Regulations)Act,1957withanobjectivetoestablishprocedureforallocationofareacontainingcoalthroughauctionbycompetitivebidding.TheRuleestablisheshowcoalblockshastobeallocatedforspecificenduselikepowerprojects,commercialminingandoutlinestheframeworkforallocationcoalblocksforgovernmentcompaniesaswellasothercompanies.

21. Reforms in Coal Sector
Coal Regulatory Authority Bill, 2013
TheMinistryofCoalintroducedtheCoalRegulatoryAuthorityBill,2013intheLokSabhainDecember,2013withthepurposeofregulatingandconservingresourcesinthecoalsectorandprotectingtheinterestsofconsumersofcoalandproducersofcoal.OneofthefunctionsoftheRegulatoryAuthoritywillbetospecifytheprinciplesandmethodologiesfordeterminationofpriceofrawcoal,washedcoalandanyotherbyproductgeneratedduringtheprocessofcoalwashing.

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