17 May, 2020

  • Important announcement for Queries on E-Learn
  • Govt. throws open defence, coal sectors - Introduction to 4th set of Key Economic Reforms (Economy) (Economic Reform in various sectors)
  • Coal & Mining Sector Reforms - (Economy) (Reform in Coal Sector, Removal of Captive Mining)
  • Coal Nationalisation
  • Captive Mining
  • Revenue Sharing Mechanism
  • Other Measures
  • Govt. throws open defence, coal sectors - Defence Sector (Security) (FDI to be increased in defence manufacturing, Import ban)
  • Govt. throws open defence, coal sectors - Civil Aviation - (Economy) (Freeing up Air Space for civil aviation)
  • Govt. throws open defence, coal sectors - Power Sector - (Economy) (Cross Subsidy, Open Access)
  • Govt. throws open defence, coal sectors - Viability Gap Funding (VGF) for Infrastructure - (Economy) (Boost in social infrastructure funding through VGF)
  • Govt. throws open defence, coal sectors - Space - (Science & Technology) (Private Participation in space exploration activities)
  • Govt. throws open defence, coal sectors - Atomic Energy - (Science & Technology) - (Irradiation technology)
  • (a) Reforms & Agriculture - FAQ (b) India opposes joining RCEP over China concerns
  • Question for the day

Prelims Quiz


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    Govt. throws open defense, coal sectors Context:

    • As you might be aware that Finance minister is coming out with announcements every other day.
    • Yesterday, Finance Minister announced far reaching reforms across Eight Sectors paving way for Aatma Nirbhar Bharat.
    • So hold your breath for this intriguing discussion which will not only discuss the reforms, but will also touch upon the backgrounds of these reforms as well.


    Coal Sector Reforms

    The Government will introduce competition, transparency and private sector participation in the Coal Sector through: 

    • Through this discussion, we will learn:
      • Basics about Coal & mineral sector
      • Introduction of Commercial Mining in Coal Sector
      • Diversified Opportunities in Coal Sector
      • Liberalised Regime in Coal Sector
      • Brief History of Coal Nationalisation in India
      • Meaning of Captive Mining
      • Benefit of the Amendment:
      • Important aspects of the Amendment


    Defence Sector Reforms

    • Understanding the liberalization of Defence sector
    • Two major themes of reforms in defence sector
      • Enhancing Self Reliance in Defence Production
      • Policy Reforms in Defence Production


    Aviation Sector Reforms

    • Understanding how reforms will help Aviation sector
    • Three major themes of reforms in civil aviation sector
      • Efficient Airspace Management for Civil Aviation
      • More World-Class Airports through PPP
      • India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO)


    Power Sector Reforms:

    • Understanding how reforms in Power sector will help Economy
    • The discussion will deal with:
      • Power sector
        • Tariff Policy Reform
          • Consumer Rights
          • Promote Industry
          • Sustainability of Sector
        • Privatization of Distribution in UTs


    Viability Gap Funding

    • Understanding the mechanism to gather funding for reforms.
    • What is Social infrastructure
      • How to boost private sector investment through revamped viability gap funding scheme - rs 8,100 crore
    • Reforms Suggested


    Space Sector Reforms:

    • Major highlights of the reforms in Space Sector.
      • Boosting private participation in space activities


    Power Sector

    • Major highlights if the reforms in Energy Sector.
      • Atomic energy related reforms
      • Research reactor in Public Private Partnership (PPP)
      • Facilities in PPP mode to use


    Reforms and Agriculture

    The measures announced for the agriculture sector.

    • What are the measures announced by the government to deal with the farm?
    • Key features
      • Important Governance Reforms
      • Revamping Essential Commodities Act
        • Problems which need resolution
        • Reforms offered
        • Impact of the reforms.
      • Push for implementation of Model APMC Act
      • Legislative backing for Contract Farming
      • Reforms in Farm Infrastructure



    Dipmalya Datta 6 months ago

    video is not having sound

    Madhu Mahi 6 months ago

    Video hving no sound

    Anant pratap singh 6 months ago

    sir audio is not available

    Md Ayaz Ahmed 6 months ago

    no sound 

    Diksha 6 months ago

    Related to coal nationalization( second point in image )
    Sir, could you please explain, how apathy in coal mining investment resulted in oil prices shock ?

    Rau's IAS, Delhi 6 months ago

    Oil prices quadrupled from $3 in 1972 to $12 in the later half of 1974 triggered by the Yom Kippur War, when Israel was attacked by Egypt and Syria. The US and some other Western countries supported Israel. Out of anger, Arab nations imposed an embargo on these countries by putting off oil production by 5 million barrels per day. The control on oil prices shifted from the US to the OPEC nations during the ‘Arab Oil Embargo.’ So, this also impacted oil price in India. 

    So, we can say that nationalisation of coal industry in India in the early seventies was a fall out of two related events. In the first instance it was the oil price shock, which led the country to take up a close scrutiny of its energy options. A Fuel Policy Committee set up for this purpose identified coal as the primary source of commercial energy. Secondly, the much needed investment needed for growth of this sector was not forthcoming with coal mining largely in the hands of private sector. Further, the coal mining which was with private miners suffered with their lack of interest in scientific methods, unhealthy mining practices etc. The living conditions of miners under private owners were sub-standard.

    So, considering all these aspects it was decided to Nationalise coal mining in India. 

    Lourembam Nelson Mangangcha 6 months ago

    Sir, What is lifting period in coal reforms and how is it helpful?

    ANKURGOYAL 6 months ago


    ANKURGOYAL 6 months ago

    Sir, wasn't through ordinance, changes brought to allow 100% fdi in coal sector and therefore no Q of any monopoly. Just couldn't relate with the new govt order (sic)
    • "The government mono­poly on coal would be re­moved with the introduc­tion of commercial mining, said Ms. Sitharaman, allow­ing any private player to bid for a coal block and sell it in the open market"

    maybe it is answer to my boubt, But I couldn't comprehend the govt continued statement(sic)
    • "Earlier, only captive consumers with end­ use ownership could bid for coal blocks. Al­most 50 blocks will be of­fered immediately,"


    The answer lies here -> that ki earlier order was through ordinance, now it is not?

    Rau's IAS, Delhi 6 months ago

    Lifting of Coal is a term used in the e-Auction or Fuel Supply Agreement (FSA) for transferring coal by road or rail. Generally the validity period for complete lifting of coal by road shall be 45 days from the date of issue of Sale/Delivery Order. The gov. intend to extend the days for transfer of coal from mines to their designated places as agreed in the e-Auction or FSA. So, any extension in lifting period will help in increasing sale of the coals which are mined. 

    Lourembam Nelson Mangangcha 6 months ago

    Thank you for clearing the doubt sir :D

    shweta patil 6 months ago

    sir nowadays gold price is rising steadily, on the other hand having no demand in international plus domestic market becoz of covid-19 , what would be the exact reason and consequence of the price rise from upsc's point of view. hope u all raus team members are safe, sir anticipate our hard work

    Rau's IAS, Delhi 6 months ago

    Dear Ankur,

    Please go through the following events chronologically to understand how has decisions taken place in the Coal & Mining Sector.

    • August 2019 - Union cabinet in August 2019 approved 100% FDI in coal mining thereby allowing foreign investments through the automatic route.
    • September 2019 - Then through a Press Note dated September 2019, Ministry of Commerce came up with a specific FDI Policy in the Coal Mining Sector whereby the following activities were allowed 100% FDI under Automatic Route –
    • Coal & Lignite mining for captive consumption by power projects, iron &steel and cement units and other eligible activities permitted under and subject to the provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation)Act, 1957.
    • Setting up coal processing plants like washeries subject to the condition that the company shall not do coal mining and

    shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plants for washing or sizing.

    • For sale of coal, coal mining activities including associated processing infrastructure subject to the provisions of Coal Mines (Special Provisions) Act, 2015 and the Mines and Minerals (Development and Regulation) Act, 1957 as amended from time to time and other relevant Acts on the subject.

    DPIIT - https://dipp.gov.in/sites/default/files/pn4_2019.pdf

    FEMA Approval - https://dipp.gov.in/sites/default/files/lu628.pdf

    • January, 2020 – Union Cabinet approved Ordinance to carry out the above changes for 100 % FDI in Coal Mining. Accordingly, The Promulgation of Mineral Laws (Amendment) Ordinance 2020 was introduced in Parliament to amend the Mines and Minerals (Development and Regulation) Act, 1957 and the Coal Mines (Special Provisions) Act, 2015.
    • March 2020 – Parliament passed the Ordinance in March to remove end-use restrictions for participating in coal mine auctions and opened the coal sector fully for commercial mining for all domestic and global companies. Thus, The Mineral Laws (Amendment) Act, 2020 came into being to improve ease of doing business in coal sector, boost coal production in India and reduce dependence on import of coal.    
    • May 2020 – Most of these previous efforts of the government was presented as consolidated reforms in the Coal & Mining Sector. Revenue Sharing Mechanism was introduced through the Fourth Tranche of Economic Reform. The Government introduced some measure through  Diversified Opportunities in Coal Sector – such as giving discount on coal gasification/liquefaction done by industries apart from coal mining and certain investment by the government to improve infrastructure as well easing the process of coal extraction and their mechanised transfer from mines to their place of requirement such as thermal or steel industries. Another measure includes concession to Coal India Limited Consumers. Basically the government wants private players to invest in Coal and Mining Sector by providing certain incentives at different level of production activities.

     Conclusion - So, yes the Ordinance has been passed as The Mineral Laws (Amendment) Act, 2020 allowing private participation as well as other measures of reforms in the coal and mining sector. FEMA has accordingly approved 100 per cent FDI in Coal Mining through Automatic Route as per the Press Note of September, 2019.