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Narendra Modi passes Thatcher test, coal reforms to continue

India will stick to its plans to open up the coal industry to private firms and sell a stake in state-run Coal India Ltd (CIL), despite the resistance by mine workers, the country's coal and power minister said on Thursday.

The five mineworker unions of the world's largest coal miner called off a five-day strike in its second day on Wednesday, after coal and power minister Piyush Goyal assured them a committee would be formed to address their concerns.

The strike had been seen as a test of Prime Minister Narendra Modi's resolve to push through tough economic reforms.

The government's victory is reminiscent of late British prime minister Margaret Thatcher's confrontation with striking coal unions in the 1980s.

Mineworkers fear the entry of private companies will pressure CIL to reduce costs, eventually leading to pay and job cuts at the inefficient state behemoth that accounts for about 80% of the country's total output.

Coal fuels 60% of India's power production and worker strikes have previously crippled power plants.

"If they have any concerns they are always open to further discussions and dialogue." Goyal said.

"(But) there is absolutely no change in any of our plans."

Goyal said increasing competition is key to meeting demand for cheap coal and realising PM Modi's goal of supplying round-the-clock power to India's 1.2 billion people by 2019.

The country still has 280 million people living without power in 56 million homes, Goyal said.

In late December, Modi resorted to a rarely-used executive decree to implement coal reforms that would allow an auction of coal mines and lead to private companies commercially mining the fuel for the first time in 42 years.

The government is also looking to divest a 10% stake in Coal India in a sell-off drive to meet its budgetary needs.

Goyal said he hoped the formation of the committee will help CIL workers air their views so that they "do not have to go on strike again".

S Q Zama, secretary general of the Indian National Mineworkers Federation, said that though Goyal did not agree to consider reversing the decision on commercial mining, workers were relieved that the government will not fully privatise Coal India as many had feared.

The first two days of the strike led to a production loss of about 1 million tonnes for Coal India, which normally produces about 1.4 million tonne a day during this time of year.

Goyal said the unionised miners have promised to help make up for the loss.

Source: DNA