- Promoting common good: It operated based on the principles of promoting the “common good” and ensuring equitable distribution of a vital natural resource.
- Established monopoly: Under the Nationalisation Act of 1973, specifically the Coal Mines (Nationalisation) Act, it was established as a “monopoly.”
- Differential pricing: To incentivize captive coal production, it may need to follow a pricing mechanism that varies based on circumstances.
- o The purpose of differential pricing was to ensure the sustainability of the broader operational ecosystem and pursue welfare objectives.
- Attaining national objectives: Moreover, coal supply also has implications for broader national policies, such as promoting growth in economically disadvantaged regions through increased allocation.
- The PSU clarified that its operations were not driven by commercial interests.
- It highlighted that 345 out of its 462 mines incurred a combined loss of? 9,878 crore in 2012-13.
- The Raghavan Committee (2020) report, cited by CCI, concluded that state monopolies were not in the best interests of the nation and should not be allowed to operate inefficiently without competition.
- In addition, coal was no longer classified as an “essential commodity” after 2007, and the Nationalisation Act was removed from the Ninth Schedule (laws immune from court challenges) in 2017.
- Disinvestment: Until the disinvestment in 2010, Coal India was entirely government-owned, and the government’s ownership subsequently reduced to 67%, with the rest held by private entities.
- Coal India directed 80% of its supplies to power companies, who would then transmit power generated from coal to distribution companies (discoms), ultimately reaching end consumers.
- Coal accounts for approximately 60 to 70% of the expenses incurred by power generation companies, which means that irregular prices and supply would indirectly impact consumers significantly.