Coal sector needs new exploration and licensing policy: CII

The Confederation of Indian Industries (CII) today recommended the setting up of an independent coal regulator to address the issue of India's perennial coal shortage that threatens to derail power production targets and thereby economic growth itself.

It also urged the government to enable competitive bidding for coal blocks by ushering in 'production-linked payments' under the system followed for bids under the new exploration and licensing policy (NELP) for discovery and exploitation of oil and gas reserves.

The industry body has also proposed creating an enabling environment for private participation in exploration for coal and building a road map to introduce commercial mining to tackle the shortage that has the potential to stall several infrastructure projects.

As per an assessment of the sector done by CII, the acute shortage of coal in the country has become an issue of major concern for the power sector and has led to apprehensions that the ambitious capacity addition targets of 90 to 100 giga Watts in the 12th Plan period (2012-17) may not be met.

Coal India Ltd (CIL) has scaled down its production targets for 2011-12 to 452 million tonnes from 460.5 million tonnes target set earlier.

Against the current year's ambitious target, only 431.32 million tonnes were produced due to delay in getting forest clearances, non-completion of some contracts that have come under litigation, and law and order problems in some areas.