Coal Ministry Plans To Link Auctions With No-End Use Restriction, Likely To Benefit Small Businesses

Coal ministry is on its way to reform existing Shakti policy which deals with coal auctions and ease things up for small businesses
Coal ministry plans to reform auction, likely to benefit small businesses
Coal ministry plans to reform auction, likely to benefit small businesses

Coal Ministry is reportedly planning to bring changes in the way coal auctions are carried out. The ministry aims to help the small business from such as steel, cement, fertilizers and captive power producers to have continuous long-run access to coal supply.

The proposal highlighting reforms in the policy on auction of long-term linkages will be soon circulated in a draft note for the Cabinet as per a report in the Mint.

Currently, the coal auction is done under the Shakti Policy of 2017 and the proposed changes will bring two radical reforms. Firstly, it will allow long-term coal linkages, specifically for the non-regulated sector and secondly, to bid for coal without restrictions on its end use for long-term. The existing policy is focused only on power companies and companies in non regulated sectors, large steel and cement makers have been allowed to participate in long term coal supply auctions, with restrictions on the use of coal. 

The proposed changes will decrease India's coal dependency on imports, as earlier small business and traders turn to imports to ensure steady availability of coal. The suggestions are made followed by a recent change in increased availability of coal and the government's focus on reducing imports.

As India is moving towards green economy and planned reform have comes when investors are losing their interest for fossil fuels. At the same time global energy investment landscape is rapidly changing to a focus on environmental, social and governance (ESG) investing.

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