The government on Thursday approved a bill for setting up a regulator for the coal sector paving the way for a much-awaited watchdog for the sector.
The Union Cabinet,which met on Thursday,approved the Independent Coal Regulatory Authority Bill,which is likely to be introduced in the coming Monsoon Session of Parliament. The proposed regulatory mechanism,however,would have no say in pricing of the fuel or in allocation or de-allocation of coal blocks.
A senior coal ministry official said the regulator would be tasked with the recommendation of the guiding principles for pricing coal and suggest ways for optimising production in the coal sector.
The coal ministry in its proposal to the Cabinet had suggested that the proposed watchdog should act as an adjudicating body to mitigate disputes between the coal companies and their buyers. A group of ministers (GoM) had last month cleared the coal ministrys proposal for a regulator in the sector.
The Indian Express had on April 25 reported that the coal ministry had re-written the draft bill on the regulator clipping powers of the watchdog on pricing and allocations of coal blocks.
An independent regulator for the coal sector is considered by the government to be important for fixing guidelines for helping in price determination,improving competitiveness in the e-auctions,setting trading margins and increasing transparency in the allocation of reserves. The regulator will also regulate methods for testing for declaration of grades or quality of coal,specify procedure for automatic coal sampling and monitor closure of mines and accord approval of mining plans.
The power ministry has been demanding a watchdog to curb profiteering tendencies of the coal companies.
* The government envisages the coal regulator to bring out pricing guidelines,set trading margins and increase transparency in the allocation of reserves
* It will also regulate methods for coal testing,monitor closure of mines and approve mining plans
* The regulator will,however,have no role in allocation or de-allocation of coal blocks or price determination for the fuel