Dear All,

Coal regulator gets Cabinet nod to infuse transparency and efficiency in the coal sector

 

The union cabinet has given its go-ahead for setting up an independent coal regulator to infuse transparency and efficiency in the coal sector. The non-statutory regulator would be set up through an executive order as the Coal Regulatory Authority (CRA) Bill 2013 is still pending before Parliament.
The authority would determine methodology for coal price fixation, methods for testing and declaration of grades, specify procedures for coal sampling, and adjudicate upon disputes between parties and monitor mine closure plans. This move will create an atmosphere in the country for a more disciplined use of coal. However, the regulator would not have the power to decide prices of coal in the domestic market and state-owned Coal India Ltd (CIL) will continue to enjoy freedom in setting prices. Further, the regulator will have no say in the allocation of coal acreages.
The pricing power too was taken away from the regulator based on the argument that coal prices were decontrolled in stages between 199 6 and 2000 and de-nationalization of the sector is not envisaged. Coal mining is an exclusive domain of the public sector in India . CIL and Singareni Collieries (SCCL) account for 82% of the domestic 557 million tonne production annually. Further, private companies are allowed to mine coal for their small captive use.

 

Warm regards,

 

Dr. S P Sharma

Chief Economist