What steps have taken by government to overhaul coal sector


The government on Wednesday moved a step closer to restructure the coal sector with a proposal that could potentially benefit the power companies that have been strained by the scarcity and poor quality of coal supplied to them. A group of ministers (GoM) signed off on a plan to set up a coal regulator and to create a "pass-through" mechanism that would see higher costs from imported coal being passed on as increased tariffs. The proposal is now expected to be presented to the Union cabinet for its approval on 7 June 2013.

"We have been able to achieve traction and closure, pretty much, with regard to the coal regulator Bill, in terms of the formulation of different clauses and finality of its structure," said minister of state for power Jyotiraditya Scindia. "Similarly, with regard to the pass-through mechanism for increasing supply of coal from external sources to the power sector, we have achieved closure on that mechanism structure as well." The proposed coal regulator will be primarily entrusted with the task of monitoring testing, quality, supply and grading of coal, but will not regulate pricing. It will, however, have an attached appellate body that will adjudicate on disputes between coal suppliers and buyers, including some pricing issues.

1. What steps have been taken by government to overhaul coal sector?

2. How effective coal regulator would be to avoid monopoly situation in coal industry in case pricing is kept out of its remit?

3. How is price decided in coal industry where there is situation of near monopoly? (Explain with suitable diagram).

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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