Supreme Court scraps 214 coal blocks: The immediate impact

Written by Express news service | New Delhi | Updated: Sep 25 2014, 17:25pm hrs
CoalAll but four coal blocks allocated since 1993 have been cancelled, leaving developers, banks and investors in the lurch.
Characterising its verdict as futuristic, corrective as well as compensatory, the Supreme Court on Wednesday quashed allocations of 214 out of 218 coal blocks that it had declared as illegal last month.

Here are the immediate impacts of the Supreme Court decision:

BREAK IN INDIA

* All but four coal blocks allocated since 1993 have been cancelled, leaving developers, banks and investors in the lurch. With the PM scheduled to visit the US Friday, the SC order may not be the best signal India gives to foreign investors.

SECTORS HIT

* Power sector bears the brunt, 30,000 MW in limbo; steel and cement companies too affected.

BANKING

* Total exposure of banks a staggering Rs 1 lakh crore.

* Most developers raised debt with coal blocks as collateral.

* Some small companies already defaulting on interest payments.

* Gain govt could have done without: Players with operational blocks have been asked to pay a penalty of Rs 295 per tonne of coal mined up to 2014-15, netting the govt Rs 10,000 crore.