It is tough to argue against Prime Minister Narendra Modi’s efforts to steer the stuttering economy towards a more productive path through a privatization-led perestroika. Perhaps, as a crisis response to shore up resources or plug the gnawing budget deficit, the decision to cash out of premium heirlooms — airlines to oil refineries, coal mines to shopping lines, and railway freight — is both politically plucky and fiscally pragmatic.
But as much as one gets overawed by Modi’s efforts to rekindle his inner Atal Bihari Vajpayee, or shall we say Margaret Thatcher, going through the fine print and unrealistic time table, especially in the backdrop of shifting global business landscape, it becomes evident we are missing the wood for the trees again.
Take privatisation of coal blocks. It is perhaps coming at the worst time ever.
Across the world, with the possible exception of the US, miners, investors, financiers are baulking at the prospect of extracting more of the dirty fuel. Wall Street money managers are forcing the big mining giants to either abandon their business or taper off production. As pressure groups rachet up their opposition and capital dries up, the retreat has been racy for the Big 4 — BHP Group, Rio Tinto, Anglo American and Glencore — and has accelerated much beyond Europe.
For long, India, with its fifth largest global deposits, has had less room to manoeuvre. Limited hydrocarbon reserves, fledgling clean tech alternatives were not good enough to offset the peak demands of its energy-guzzling economy. Polluting coal-fired soot remained the only choice to cope with growing electricity demand, especially in the absence of natural gas for balancing our electricity grids.
But gradually, the economic case of coal for thermal power has started collapsing. The world’s fastest growing fossil fuel market is haemorrhaging with over $40 billion of bad loans in the thermal generation sector