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Q48 (IAS/2019) Economy › Industry, Infrastructure & Investment › Energy sector infrastructure Official Key

Consider the following statements : 1. Coal sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks are allocated on lottery basis. 3. Till recently, India imported coal to meet the shortages of domestic supply, but now India is self-sufficient in coal production. Which of the statements given above is/are correct?

Result
Your answer: —  ·  Correct: A
Explanation

The correct answer is option A (Statement 1 only).

The coal sector was nationalized through the Coal Mines (Nationalization) Act 1973, which debarred private companies from mining coal and gave Coal India Ltd (CIL), a PSU, the monopoly for coal mining.[1] This nationalization occurred after Indira Gandhi was re-elected in 1971 on a campaign that endorsed nationalization, and she went on to nationalize coal along with other industries.[2] Therefore, Statement 1 is correct.

Statement 2 is incorrect. Coal blocks for captive mining were allocated based on recommendation with no mechanism of bidding.[1] A screening committee was set up by the Ministry of Coal to provide recommendations on allocations for captive coal mines, and all allocations to private companies were made through[3] this committee. There is no lottery-based allocation system mentioned in the sources.

Statement 3 is also incorrect. India's total coal imports have increased tenfold since FY2004.[4] While there are goals for self-sufficiency, India is not yet self-sufficient and continues to import coal to meet domestic shortages.

Sources
  1. [1] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > Background: > p. 427
  2. [2] Rajiv Ahir. A Brief History of Modern India (2019 ed.). SPECTRUM. > Chapter 39: After Nehru... > Socio-Economic Policies > p. 687
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Q. Consider the following statements : 1. Coal sector was nationalized by the Government of India under Indira Gandhi. 2. Now, coal blocks…
At a glance
Origin: Books + Current Affairs Fairness: Moderate fairness Books / CA: 6/10 · 4/10
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This is a classic 'Sectoral Evolution' question. It blends static history (Indira Gandhi era) with current economic realities (Auctions & Imports). The strategy is to track the 'Life Cycle' of major industries: Nationalization → Crisis/Scam → Reform (Auctions) → Current Status (Import dependence).

How this question is built

This question can be broken into the following sub-statements. Tap a statement sentence to jump into its detailed analysis.

Statement 1
Were coal mines in India nationalized by the Government of India?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 14: Infrastructure and Investment Models > Background: > p. 427
Presence: 5/5
“With the passing of the Coal Mines (Nationalization) Act 1973, the private companies were debarred from mining of coal and Coal India Ltd (CIL) which is a PSU got the monopoly for mining of coal. However, through amendments, private companies and PSUs were allowed for captive mining which means coal blocks can be given to these companies only for specific end-use projects and they cannot sell the coal in the open market. The coal blocks were allocated for captive mining based on recommendation and there was no mechanism of bidding because”
Why this source?
  • Names the Coal Mines (Nationalization) Act 1973 as the legal instrument for nationalization
  • States private companies were debarred and Coal India Ltd (a PSU) obtained monopoly for coal mining
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 6: Indian Economy [1947 – 2014] > 6.3 Economic Situation after Nehru (1965 to 1991) > p. 211
Presence: 5/5
“• Coal industry was nationalized in 1973• The Foreign Exchange and Regulation Act (FERA) was passed in 1973 putting numerous restrictions on foreign investment and the functioning of foreign companies in India, making India one of the most difficult destinations for foreign capital in the world. (At the same time east Asian countries like Singapore, Malaysia, Thailand, Taiwan were opening up their economy for foreign capital).• The government also decided to take over and run sick companies, such as a number of textile mills, rather than allow such loss-making companies to close down.”
Why this source?
  • Explicitly states that the coal industry was nationalized in 1973
  • Places nationalization among major economic policy actions of the period
Geography of India ,Majid Husain, (McGrawHill 9th ed.) > Chapter 8: Energy Resources > COAL DEPOSITS OF THE TERTIARY PERIOD > p. 7
Presence: 4/5
“India is the third largest producer of coal in the world after China and U.S.A, contributing about 5% of the total coal production. An examination of (Table 8.2) shows that in 1950–51 the total production of coal and lignite was 323 and 0.4 lakh tonnes which rose to 6319 and 612 lakh tonnes in 2015–16 respectively. The coal mines were nationalised in 1972, after which there had been a tremendous increase in the coal production (Table 8.2).”
Why this source?
  • Declares that coal mines were nationalised (cites early 1970s timing)
  • Links nationalization to subsequent increases in coal production
Statement analysis

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Statement analysis

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Statement analysis

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Statement analysis

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Consider the following statements : 1. In India, State Governments do not have the power to auction non-coal mines. 2. Andhra Pradesh and Jharkhand do not have gold mines. 3. Rajasthan has iron ore mines. Which of the statements given above is/are correct ?