Cabinet approves creation of coal regulator through executive order

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CIL would continue to unilaterally determine the prices of the fuel. CIL would continue to unilaterally determine the prices of the fuel.
SummaryAnalysts say move will undermine the entity, seen toothless anyway.


CIL, which accounts for 80% of domestic coal production, is struggling to increase output. The PSU, which produced 452.5 million tonne of coal in 2012-13 against the target of 464 million tonne, is projected to miss its production target of 482 mt for the current year.

Meanwhile, the idea of stepping up domestic coal production by allocating captive blocks to user industries from sectors like power and steel has also run aground, with the coal ministry deallocating 28 out of the 61 blocks allocated to private players this week for delay in production. More deallocations are likely to follow in the coming week when the government reviews status of ten captive coal blocks whose allocatees were asked to secure final forest clearances by February 12 or be prepared to lose those blocks.

But the industry has mixed feelings about the government's move to appoint a non-statutory coal regulator. While it may have wanted to see a statutory watchdog in place who could restrain CIL from fixing coal prices and deciding on quality unilaterally, it feels a non-statutory regulator is not that bad under the prevailing political scenario.

Kameswara Rao, leader for energy, utilities, and mining in PWC said: "This is an important development for the coal and end-use sectors, and will address a wide range of issues from licensing, pricing, terms of supply contracts, sustainable use of resources etc., in a more economic and scientific manner, moving away from current administrative arrangements. An independent regulator will also give confidence to end-user investors that their investments will be better protected, and the sector will be able to better attract commercial funding." He added, “The proposed regulator will be able to bring economic and sustainability perspectives besides efficient pricing and use of coal.”

Conversion of 7,200 km of state roads to NHs cleared

The Cabinet also decided to convert 7,200 km of state roads into national highways.

"The Cabinet Committee on Economic Affairs (CCEA) has given nod for declaring 7,200 km of state highways as national highways," a senior minister said after the meeting here.

With this the total length of the state highways

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