The coal sector in India is the most criticized sector owing to the scams and other scandals related to the coal mines. India, in spite of being the fifth largest producer of coal in the world and third largest importer of coal in the world lacks in fulfilling the demand for coal in the domestic market. Especially the increasing demand from the power plants, steelmakers and cement industry, needs more production and import of coal in the country.
In order to cope with the increasing demand and to put a check on the coal scandals and scams going on in the country, The Cabinet has given a green signal for setting up an independent regulatory authority for the coal sector. The Coal Regulatory Authority Bill has been passed by the government for the approval from the ministry. “Pending the passage of the Bill, we propose to set up the authority by an executive order. There are precedents for that. The PFRDA was set up by an executive order. It is still under an executive order. Sebi was the first to be set up by an executive order, and then it became a statutory body,” says Finance Minister P Chidambaram.
The regulator will be putting a check on the principles and methodologies used for setting up the price of coal. It will however, not put its interference in allocation of blocks nor will it decide about the price for the fuel. Apart from this, it will also look after the quality, grade and supply of coal, thus bringing a much-needed transparency in the source of commercial energy. The regulator will also solve the disputes among the supplier and the consumers regarding the supply agreement.