Coal Mine Auction likely to Affect State and its Residents: Jharkhand Government to SC

The stage is set. Let the auction begin. Just as the Centre began auctioning off the coal blocks for commercial mining, the Jharkhand Government moved the Apex Court. It filed a plea in the SC seeking postponement of the auction. The Government challenged the process, stating the need for fair assessment of the social and environmental impact of commercial mining. The state was extremely apprehensive of its adverse impact “on the huge ‘tribal population’ and vast tracts of ‘Forest lands’ of the State and its residents which are likely to be adversely affected.”

The Auction Action

The Centre had decided to auction 41 coal blocks for commercial mining, giving equal opportunity to domestic as well as global firms under the 100% FDI route and was aimed at making India self-reliant in the energy sector. However, few argue stating the fallacy of such an auction during the current scenario.

Advocate Tapesh Kumar Singh filed the plea on behalf of the Jharkhand Government. The plea states that the negative effect of ‘Global Investment Climate’ prevailing due to ‘COVID-19’, would lessen the efficacy of the auction. The main purpose of the auction is to attract foreign investments. The Cabinet in August 2019 had decided to allow 100% FDI in the coal mining sector. In pursuance, the Parliament introduced the Mineral Laws Amendment Act 2020 in March 13, 2020. It was done to specifically attract the inflow of investments from foreign companies. However this provision was set to expire on May 14, 2020. The auction however, began, after such date lapsed. Therefore, the auction is effectively taking place in a ‘legal vacuum’, since Section 11A of the MMDR Act, 1957 has no such provision in it. 

Singh is concerned that in order to make India self-reliant, the Centre’s decision of selling off such an important ingredient in a short span of time, may actually cause more harm than help. Without analysing the full impact of such a major decision, we may be running blind into uncharted waters.