On a day he was promoted to the Cabinet rank, Union Coal Minister Sriprakash Jaiswal promised bringing about revolutionary changes in his ministry aimed at fast-tracking the coal reforms process. This includes setting up a coal regulator and kick-starting the process of competitive bidding of coal blocks.
The coal regulator Bill will be introduced in the Budget Session. This will bring about revolutionary changes. Also, the guidelines for competitive bidding will be finalised within a month. My leadership has expressed confidence in my performance and has elevated me. I will ensure performing better," Jaiswal said.
His "blueprint" for coal sector reforms include setting up an independent regulator, along with the opening of mining to the private sector, among others.
Independent regulation of the sector is considered important for fixing formulae for price revision for long-term fuel supply agreements, ensuring competitiveness of e-auction of coal, fixing trading margins and increasing transparency in allocation of the available reserves.
Jaiswal also said the Bill would be considered by a standing committee before it was introduced in the budget session, which begins on February 21.
"Also, the process for competitive bidding of blocks will begin by April this year," he said. Competitive bidding will replace the current practice of allocating blocks to the private sector for notified captive use based on recommendations of an inter-ministerial committee. The new system is expected to induce "transparency and objectivity" in the overall coal block allocation process.
The proposal of auctioning of coal blocks was mooted for the first time two years ago. Parliament approved the crucial amendment in the Mines and Minerals (Development and Regulation) Act, 1957, in the Monsoon Session last year. The Bill is awaiting Presidential assent.
Jaiswal said the current financial year's production target of 461 million tonnes (mt) by state-owned Coal India could be missed, owing to the environment ministry's No-Go policy which bars mining in densely forested coal-bearing areas. The Union Cabinet had last week decided to set up a Group of Ministers to suggest a solution.
"The prime minister understands the seriousness of the issue and has requested serious discussions on the matter so that the possible shortfall in coal production due to this can be avoided," the minister said.
The gap between the demand and supply of coal by the end of the current Plan period is likely to go up to 83 mt as against a demand of 713 mt.
Jaiswal ruled out any immediate increase in coal prices but said prices would be revised once the wage revision, due in July this year, took place.
