India has highest coal royalty, end-use conditions: Naveen Jindal

India not only has the highest royalty on coal among other countries, but the government also takes an assurance for using the produce in end-use projects, Jindal Steel and Power chairman Naveen Jindal said with reference to the Supreme Court's recent cancellation of 214 coal block allocations.

"India charges highest royalty on coal in the world but captive producers couldn't even sell coal," Jindal said at a conference here over the weekend on the economic impact of judicial decisions organised by the Independent Power Producers Association of India (IPPAI).

"In other countries, the government being the owner of the mines, charges only royalty," he added.

The apex court had, in August, held that the allocation of 218 blocks between 1993 and 2010 was done in an illegal manner by an "ad-hoc and casual" manner resulting in the "unfair distribution" of the "national wealth".

The JSPL chairman has earlier said that about Rs.400,000 crore investment made to develop coal mines would be in jeopardy if the blocks were deallocated.

"If we term the government's coal allocation policy as faulty and illegal, then the effort put in by the investors to revive the discarded mines of Coal India, the entire Rs.4 lakh crore investment would be in jeopardy," he had said.

Speaking at the conference, former minister for external affairs Salman Khurshid said there is need for better communication between the judiciary and policy makers to avoid a repeat of the judgment delivered by the apex court.

"In modern times, law is about economics too," Khurshid said.

"When coal blocks were being allocated, nobody in the judiciary stood up to say that there should be no discrimination," he added.

"If the test of discretionary allocation was to be applied, all industrial licences and technology and FDI approvals could be cancelled," said columnist Swaminathan Aiyar.

Economic Times editor T.K. Arun asked whether the government would now return the taxes the companies -- which produced coal from allocated mines -- had paid to it.

Meanwhile, media reported Monday that in what is the first major casualty of the court decision, JSPL has shelved a $10 billion coal-to-diesel project of converting low-quality coal to 80,000 barrels per day of diesel.

The company has had nine of its coal fields withdrawn as a result of the court verdict.