High coal auction rates leads burden on Indian power consumers

It is the consumer who would have ended up paying more cost for electricity if coal blocks meant for power generation been auctioned off at high prices, Union Minister Kamal Nath said.“You can put any price on it, in the end, the consumer will pay. So, if you say, ‘why weren’t these (coal blocks) auctioned’, fair enough. Had they been auctioned, perhaps there would’ve been a higher price (of electricity). ‘But who would have to pay?’ the consumer.“No power generator would have said, ‘I will sell my wife’s jewellery and pay’, it’s the consumer,” Nath said.

Speaking at an event organised by the PHD Chamber of Commerce and Industry, the Parliamentary Affairs Minister, who also holds the Urban Development portfolio, said that people often questioned past decisions with the benefit of hindsight.

"Like we had this huge so-called scam in (allocation of) coal blocks. Now, we have the fourth largest reserves of coal, 200 billion tonnes of coal, and we are importing 100 million tonnes. Now, the process of coal allocation has been on for the last 25 years, it is nothing new. The question is, how do you arrive at a fair market price?" he said.

Nath acknowledged that there were problems in the power sector and noted that many plants were not receiving adequate coal supplies. He also pointed out that there were instances when state governments had not been prompt in making payments to power companies.

Turning to the issue of governance, Nath emphasised the need to reflect on the system in place in the country.

Talking about comparisons between India and China, Nath averred that while citing figures, it should be remembered that India works in a different framework.

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