Another example of India’s fascinating center/periphery patronage system comes from today’s government press releases talking about the India’s relatively recent New Coal Distribution Policy:
The New Coal Distribution Policy of October 2007, inter-alia, provides for distribution of coal to the consumers in small and medium sectors across the country based on:
The quantity earmarked for distribution to such small and medium consumers is eight million tonnes annually. The earmarked quantity is to be distributed through State Government Agencies/Central Government Agencies or Industries Associations so notified by the respective State Governments, for which the agency/association so notified is required to enter into Fuel Supply Agreement (FSA) with the concerned coal company.
The allocation of the quantity amongst the States is done on the basis of their consumption pattern in the past. This was informed by Shri Pratik Prakashbapu Patil, Minister of State in the Ministry of Coal while replying a written question in Lok Sabha today.
The Minister said that the concerned State Government has to ensure that the legitimate coal requirements of small and medium consumers located in their State are properly analysed and suitable action is taken for meeting the requirements, to the extent feasible. No specific complaint from the state nominated agencies about closure of any small and medium industry due to non-availability of coal has been reported.
For those following India, this new policy was created as a way to help fight the coal mafias that were taking advantage of the prior coal rationing policy and selling coal on the black market.
However, recently (2011) the new policy was criticized as being in need of reform as increasing demands from the power sector were still making it impossible to provide additional coal to other sectors. As reported in the Indian Express last year,