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Introduce competition in domestic coal sector: Survey

Press Trust of India  |  New Delhi 

Competition needs to be ushered into the domestic coal sector as state-owned Coal India's "near monopolistic" position impedes the sector's growth.

"Coal India Limited (CIL) dominates the domestic coal scenario. Its near monopolistic position has often resulted in supply bottlenecks, delays in development of new coal fields and, inadequate emphasis on cost reductions at operational levels," the pre-budget survey said.

"The gap between demand for coal and domestic availability is widening at a faster pace. There is perhaps need to introduce competition in this sector," it added. The survey also stressed upon the need to adopt a "transparent" and "credible" coal pricing policy, which should be based on globally accepted norms.

"Coal pricing is also a crucial issue. CIL being the dominant producer of coal in the country has to adopt pricing policy which is transparent, credible, and based on global norms," the survey said.

With the production of both--coking and non-coking coal-- witnessing negative growth in the current fiscal, the document noted that targets had to be revised downward in the current plan due to delays in forest and environment clearances and land acquisition issues.

"Lower domestic production increased dependency on imports and in 2010-11, 68.9 million tonne (MT) of coal was imported," the survey added.

Coal production has registered a negative growth of 4 per cent in the April-December of current fiscal at 307 MT, against 320 MT for the same period in 2010-11 on the back of environmental restrictions, heavy rail fall among others.

"Coal registered a negative growth in production in the current year...The lower production in the current year and last year is primarily due to environmental restrictions, application of the Comprehensive Environmental Pollution Index (CEPI)," it said.

Other factors which contributed to the negative production includes, poor law and order situation in some of the states and lack of forestry clearance, the survey said.

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First Published: Thu, March 15 2012. 19:48 IST