Fdi in coal a radical reform

Fdi in coal a radical reform

Sugar export subsidy further skews farming.

The government’s decision to allow 100% foreign direct investment (FDI) in coal, including in its mining, is potentially a big step forward in India’s energy security. Although the Modi government had scrapped State monopoly in coal early in its first term, little progress had been made in commencing merchant mining. The FDI liberalisation in coal opens up many possibilities, including partial divestment in Coal India, hiving off an entire subsidiary to a foreign investor and accelerated development of an array of clean coal technologies, and all of them spell an end to the current travesty of India, with one of the world’s largest reserves of coal, still importing large quantities of coal and adding to its current account deficit.

Of course, the political class must show the courage to ask people to pay for the power they consume, so that the power sector becomes financially viable, for this reform’s vast potential to be realised in full. Liberalisation of local sourcing norms for single-brand retail and opening up contract manufacturing to FDI via the automatic route are both welcome developments. If any American company wants to heed President Donald Trump’s subsequently retracted call to relocate production away from China and sees India as a potential new base, this move would help. Bringing the FDI cap for online media in line with that for print media in current affairs is the right step. The fine print as to the rest of the norms will matter, of course. The government has done well to decide to launch an international coalition for disaster resilience. Orissa’s is an outstanding example of learning to cope with disasters, and there is every reason to share the expertise acquired the hard way with other Indian states and other nations.

The decision to open 75 more medical colleges is welcome. Policy should encourage training of nurses and other paramedical personnel as well. The move to subsidise sugar exports, without any move to discourage cane cultivation in areas unsuited for the crop, will tide over an immediate political problem, only to further misallocate resources. The farm sector calls for bold reforms.