The Modi government has announced plans to open up commercial mining of coal during next financial year (Apr 17-Mar 18).In the first phase, four coal mines will be auctioned. The plan is to auction as many as 23 mines during the year. Commercial mine owners will be able to sell coal to any user. For this purpose the Coal Mines Special Provision Act of 2015 was enacted which allows government to open up commercial coal mining for private players.
The declared objective of the commercial coal mining is “that government create competition for state-run Coal India Ltd (CIL) by opening up commercial coal mining.” The government has been talking about ‘low productivity’ of workers in CIL. Commercial coal mines will be used to reduce the work force in CIL in the name of making it ‘competitive’.
Continuing with its push for privatisation, the Modi government has said all public sector companies that have been earning profit for three years should be listed on stock market. Listing on stock market requires that government sell at least 25 percent of its share in these companies or issue new shares to bring down its ownership to a maximum of 75 percent. The shares of the first batch of Public Sector Undertakings (PSU's) are expected to be sold around Diwali this year. This will be the beginning of the part-privatisation of all the profit-making PSU's.
The guidelines issued by the Department of Investment & Public Asset Management (Dipam) have asked all government departments to identify companies for part-privatisation.
In line with the announcement made in Union Budget presented on 1 February, Indian Railways has appointed a consultant to advise it on how to go about listing its three PSUs - IRCTC, IRFC and Ircon.
The Union Budget has set disinvestment target of Rs 72,500 crore for the next financial year, including sale of stake in five general insurance companies as well as strategic sale of some companies. The strategic sale means giving over the control of the company to the buyer, i.e., complete privatisation.
In addition, the government has initiated merger of state-run oil companies and State Bank of India subsidiaries.