In a bid to further liberalize the energy sector and revitalize economic growth, the union cabinet has finally given its nod to the proposal for a coal sector regulator, a move aimed at infusing transparency in pricing and efficiency in mining operations of the key raw material for infrastructure industries. However, the proposal will need parliament's approval to become law.
According to decision by the Cabinet Committee on Economic Affairs (CCEA), the regulator will not have the power to decide domestic coal prices and state-owned monopoly Coal India (CIL) will continue to enjoy freedom in this regard. The regulator would only determine the terms and conditions for fixing prices, to check abuse of monopoly by any producer.
Further, the regulator is also expected to oversee coal supplies from Coal India to consumers such as power producers. It could also independently monitor the progress made by state-run and private companies in extracting coal under government allocated mining licenses.
Coal India, the world's biggest coal company by output, fulfills more than 80% of domestic need, but has been missing its output and supply targets in recent years and the state run minor largely attributes this to delays in getting government environmental clearance for new projects and local opposition to land acquisitions.
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