The government is considering to re-introduce the Coal Regulatory Authority Bill 2013, in the Lok Sabha, following Cabinet decision to allow commercial mining of coal for the private sector.

The Coal Regulatory Authority Bill, 2013, which was introduced in the Lok Sabha by the UPA government, lapsed with the dissolution of the 15th Lok Sabha in May 2014. However, a source said that since the government has paved the way for commercial mining of coal for the private sector, a regulator has to be put in place.

The Bill seeks to establish a Coal Regulatory Authority of India (CRAI) to regulate and conserve resources in the coal sector, protect the interest of the consumers and producers of coal and other related issues. The proposed CRAI will advise the government on formulation of policies in the coal sector, promotion of competition and investment in the coal industry and development of various mining technologies.

In a significant decision, the Cabinet committee on economic affairs, chaired by Prime Minister Narendra Modi, recently approved the methodology for auction of coal mines/blocks for sale of coal. The opening up of commercial mining for the private sector is considered to be the most ambitious coal sector reform since the nationalisation of this sector in 1973.

This is to be noted that the Supreme Court had cancelled 204 coal blocks in 2014, following the coal scam. The new methodology gives the highest priority to transparency, ease of doing business and ensures that the natural resources are used for national development.

This is for the first time in four decades that the country has thrown open commercial coal mining to private companies, a step which is expected to make the country self-sufficient in energy.  This will break the 41-year old monopoly of the state-owned Coal India Limited (CIL).

In 2015, the Coal Ministry had started the process to auction some of the 214 coal mines which were de-allocated following the Supreme Court order. The Apex court said that the companies would have to return the coal blocks by March 2015. Subsequently, the Coal Mines (Special Provision) Act was passed in 2015 allowing the government to auction mines to private entities for mining and commercial sale.

In February last year, the Ministry announced opening of coal sector for commercial mining. Subsequently, the Ministry released a discussion paper on the topic of “auction of coal mines for commercial mining”.

This reform is expected to bring efficiency into the coal sector by moving from an era of monopoly to competition. It will increase competitiveness and allow the use of best possible technology into the sector. The higher investment will create direct and indirect employment in coal bearing areas, especially in the mining sector and will have an impact on the economic development of these regions.

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