Coal and India in it’s Union Budget 2020-21. Is India really serious about its Climate Change commitments?

Centre’s Expenditure (figures in crore)

Revenue

Capital

Total

Actual 2018-19

708.34

0

708.34

Budget Estimate 2019-20

1159.05

0

1159.05

Revised Estimate 2019-20

933.60

0

933.60

Budget Estimate 2020-21

882.61

0

882.61

The breakup for this head is Rs. 819.98 crore for R&D, conservation, safety & infrastructure development in coal mines, and exploration of coal and lignite; Rs. 22.35 crore for coal mines pension scheme; and the remaining Rs. 40.28 crore is for the secretariat, statutory bodies and sub-ordinate bodies. The coal mines pension scheme allocation is the same as a social services developmental need and is covered under Labour, Employment and Skill Development. R&D’s main thrust area is promotion of clean coal technology and to identify coal blocks for coal to liquid projects. Conservation, safety and infrastructure’s emphasis is towards conservation of coal through protective works and safety improvement. The infrastructure component in coal field areas is development of road and rail network. Exploration of coal and lignite is to meet the demand for coal, including provisions for detailed drilling in n0n-Coal India Limited coal mining blocks (like the NTPC blocks) that would help the prospective investors in taking investment decisions regarding coal mining and reduction of time for preparing the mining plan. The allocation for the exploration of coal and lignite is Rs. 700 crore, which is to assess the coal availability to meet the sizable increase in the demand for coal. This scheme is to be implemented by the Central Mine Planning and Design Institute Limited (CMPDIL). Also, this step would help build promoting the private investment in the coal mining industry. 

The Government has eased restrictions on foreign investment in coal mining, in an effort to attract more capital from abroad. The allocation for the Coal Ministry has seen a 5.4% reduction to Rs. 882.61 crore for the FY 2020-21, a dip from the revised estimates for the FY 2019-20 of Rs. 933.60 crore. While the expenditure was Rs. 1159.05 crore for 2019-20, the actual was Rs. 708.32 crore for 2018-19. This year, however, the major increase in the allocation was towards the central sector schemes, that are entirely and directly funded and executed by the central government. However, there has been an increase in investment in public enterprises, including Coal India Limited in FY 2020-21 that stands at Rs. 18467 crore over the revised estimate of Rs. 18121 crore in FY 2109-20, which is a rise by 1.91%. What is really surprising is the mining of dirty fuel/coal by CIL which has got an overall capital outlay of Rs. 9500 crore this year. Juxtaposing this allocation with the Finance Minister’s focus on closing down thermal plants that violate carbon emissions is a paradox in itself. 

For the thermal power plants that are in violation of the National Clean Air Program (NCAP with an allocation of Rs. 4400 crore for FY 2020-21), the Finance Minister has announced a closure of such plants. These plants that are old and whose carbon emissions are higher than the preset limit would be advised to close down and the land will be put to alternative energy purposes. On the mitigation of polluted air, the International Solar Alliance will help in SDGs, climate change, disaster resilience and the NDCs under the Paris Accord. Earlier, a total of 47.95 GW of thermal capacity missed the December 31 deadline to install Flue Gas Desulphurization (FDG) units to minimize SO2 emissions level. According to the five-year National Clean Air Action Plan, the Government plans to reduce by 20-30% the concentration of particulate matter PM10 and PM2.5 by 2024, and according to the Finance Minister, the plan is India’s best effort basis and kicks off in 2021 on January 1. Interestingly, according to the Budget speech, the climate action targets under the 2015 Paris Accords were to be executed under the normal budgetary allocations. Also, according to the Paris Accords, India has committed to reduce by 2030 the emission intensity of its GDP by 33-35% over the 2005 levels. It has also pledged to generate 40% of India’s power capacity from non-fossil sources and create and additional carbon sink of 2.5-3 billion tonnes of carbon dioxide equivalent through afforestation by 2030. 

So, what the Budget does is provide a conflicting picture of furthering mining either by domestic players, or by inviting mine-cum-developers by way of FDI on the one hand and its commitment to mitigate pollution standards either by retiring old plants or switching to renewables on the other. These two avenues clash in principle and throws up a confused state of affairs in India’s contributions to Paris Accords of 2015. 

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