How India muddled its markets

Why read this story?

Editor's note: In July 2021, India’s coal ministry put 67 new mines up for auction; only 19 of these received interest and only eight got more than one bid. In 2015, when coal mines were first being auctioned to private companies, the future revenue streams from these auctions were being touted as historic sources of income for both the Union and state governments. Today, India is struggling to give them away to the private sector at rock-bottom prices with minimal conditions. What went so wrong? Why is the government struggling to sell a commodity it considers so precious? You don’t have to go far. The answers lie in India’s complex, and often tenuous, history with market design. A mixed record in marketcraft Over the last three decades, India has engaged in market design experiments of various kinds even as the Indian state gradually receded from being the main agent of economic activity. When the state is not directly responsible for generating the electricity you consume in your home, or extracting the petrol you use in your vehicle, it is still largely responsible …