New Delhi: Prime Minister Narendra Modi on Thursday launched the auction of 41 coal mines for commercial mining and said that the Indian economy was recovering fast amid the coronavirus disease (Covid-19) outbreak, expressing confidence in the domestic industry to accomplish the idea of a self-reliant India.
At an industry event titled “Unleashing Coal: New Hopes for Atmanirbhar Bharat”, the Prime Minister said he wanted India to be a net exporter of coal – the annual production capacity of the 41 coal mines is nearly a third of the country’s total output.
The launch of the auction process not only marks the beginning of the unlocking of the country’s coal sector from the “lockdown of decades”, but aims at making India the largest exporter of coal, the Prime Minister said.
The auction marks the opening up of the Indian coal sector to commercial mining. The Union Cabinet approved the new auction process of coal and lignite blocks on revenue-sharing basis last month as part of its strategy to revive economic activity amid the pandemic. The reform was announced by finance minister Nirmala Sitharaman on May 16 as part of the economic stimulus package.
India is determined to convert adversities into opportunities and the Covid-19 disaster has taught the lesson of becoming self-reliant, Modi said as he spoke about the vision to make the country the largest exporter of goods that are currently imported.
The PM said the auction of the coal mines was taking place at a time when business activity in India was recovering fast, with consumption and demand moving rapidly towards pre-Covid levels.
“There is no better time to launch this new initiative. Between end of May and the first week of June, power generation, consumption and demand for petroleum products have grown rapidly... In June, toll collection reached 70% of the February collection. Railway freight traffic improved by 26% compared to April,” he said.
Even the rural economy has gathered pace, he said. “This time, area of kharif crop was 13% more than the previous year. This year, both production and procurement of wheat have increased. Till now, 11% more wheat is procured compared to last year. This means, more money reached the farmer. These indicators... show that the Indian economy is ready to bounce back fast,” he said.
The Prime Minister said India will reduce its import dependence, which is part of the government’s self-reliant India initiative that was launched as a Rs 20-lakh crore economic stimulus package between May 13 and May 17.
The Prime Minister has previously said India should turn the public health crisis into an opportunity to create an “Atmanirbhar Bharat” by ensuring that products the country imports start getting manufactured in India.
“Atmanirbhar Bharat means that India will reduce its dependence on imports. Atmanirbhar Bharat means that India will save foreign exchange worth lakhs of crore spent on imports, and use that [money] for the welfare of the poor,” he said.
PM Modi said that India’s success and its growth is certain. “We can become self-reliant. You will recollect, until recently, we would import N95 mask, Corona testing kits, personal protective equipment – PPE, ventilators. Now the country is meeting its demand through Make in India. Very soon, we will become an exporter of important medical products. You [the industry] have confidence, you keep your morale high, we can together achieve this objective,” he said.
According to experts, the Prime Minister’s speech should be taken seriously in the present context of an economic slump due to the Covid-19 pandemic and the recent stand-off at the border by China, the biggest supplier of cheap manufactured goods to India. India-China bilateral trade is heavily tilted in favour of China. According to trade figures released by the General Administration of Customs of China (GACC), India’s trade deficit with China was $56.77 billion in 2019. Bilateral trade between the two countries was about $92.68 billion that year.
Deepak Bagla, managing director and CEO of Invest India, said: “The government is serious working on a self-reliant India. The domestic sentiment is against Chinese goods and the industry cannot ignore this phenomenon, which is getting stronger day by day,” he said.
He said the three key strengths present in the industry can help its transformation. First is nimbleness in the modification of the business model. “How the industry ramped up production of PPE from zero to 450,000 per day,” he said.
“The second is efficient use of capital and the third is innovation. The most of it is seen among MSMEs [micro, small and medium enterprises], who contribute 30% of the GDP [gross domestic product] and the government is focusing on this segment that would achieve its objective of self-reliance,” he added.
Vinod Kumar, president at the India SME Forum said that PM’s thrust on Atmanirbhar Bharat was a game changer for MSMEs. “Rationalisation of import duty and antidumping duty are bound to reduce India’s overdependence on imports and re-position India as a serious exporter,” he said.
Ram Singh, professor at the Delhi School of Economics, said that India has the potential to become self-reliant, but in some sectors, its production is critically dependent on cheap Chinese imports. “We import more than 70% of APIs [active pharmaceutical ingredients] for production of some drugs and medicines. In absence of Chinese imports, our cost of production will go up [in the short run], but it will serve us well in the medium and long term,” he said.
He pointed at the current ecosystem of start-ups in India, which is hugely funded by China and proposed that the government unlock the country’s vast reserve of human capital. “Our investment in higher education, and research and development is less than what China had 20 years ago. If we are serious about self-reliant India, we cannot afford wastage of the most important national asset,” he said.