CIL chairman welcomes coal blocks auction and regulator

Coal India Chairman Partha S Bhattacharya today welcomed the setting up of a coal regulator and auctioning of coal blocks for captive use.

"Setting up of a regulator for coal sector is necessary to provide a level playing field. Auctioning of coal blocks for captive use will ensure transparency and encourage serious players in this field," Bhattacharyya said.

Turning to introduction of clean energy cess of Rs 50 per tonne on coal produced in India, he said it was a step in the right direction.

The government today proposed to auction coal blocks for captive use by consumer industries like power and cement and suggested setting up a coal regulator to primarily tackle issues such as coal pricing. Both the proposals are awaiting the Parliament clearance.

Essar Steel Executive Director Vikram Amin said: "The focus on infrastructure spending, allocation of funds for railways and highways, emphasis on power sector, focus on rural, urban development augurs well for the steel industry."

Steel prices are likely to rise further in the months to come due to rising input costs.

"Any increase in input cost will have to be passed on to the consumers," Roongta added.

The Budget includes a proposal of levying a cess of Rs 50 on per tonne of coal, this move is likely to make the dry fuel dearer for consuming industries like steel.

The domestic steel firms have increased prices of their products by up to Rs 5,000 a tonne in the past two months, raising inflationary concerns and prompting the government to term the price hike as speculative.

"...There is also an increase in the prices of fuels in the country. All this will add a pressure to the inflation in the country," Roongta said.

Ernst and Young Partner Naveen Vohara said: "Domestic steel firms will not hesitate in passing the 2 per cent hike in excise duty or around Rs 600 a tonne to the consumers as the demand for the commodity remains strong."

But, he maintained the affect of the proposed cess on coal would be marginal.