COAL INDIA FACES PENALTY FOR NON-SUPPLY ISSUES

Why in the news?

The Indian government mandates penalties for Coal India Ltd. for failing to supply e-auction coal, aiming to enhance business fairness and boost non-regulated sector supplies.

COAL INDIA FACES PENALTY FOR NON-SUPPLY ISSUES - UPSCsource:lotusrise

Highlights of the Coal India Penalty for Non-Supply of E-Auction Coal:

  • New Penalty Mandate:
    • Government Directive: Coal India Ltd. (CIL), which handles about 80% of India’s coal production, is now required to pay penalties for failing to supply coal purchased through e-auctions.
    • Purpose: This mandate aims to improve ease of doing business and ensure fair practices, especially for the non-regulated sector (NRS).
  • Changes and Developments:
    • Fuel Supply Agreements (FSAs): CIL has begun online signing of FSAs, including for SHAKTI auctions, which simplifies the process for consumers.
    • Increased Supply to Power Sector: In FY24, coal dispatch to the power sector was 64 million tonnes, an 8.78% increase year-on-year.
    • NRS Supply: Dispatch to non-regulated sectors (NRS) was 162.96 million tonnes, up 22.32% year-on-year, indicating a growing focus on these industries.
What is PM Gati Shakti?

  • Integrated Digital Platform: Centralizes planning by integrating data from various ministries.
  • Dynamic Mapping: Provides real-time updates on infrastructure projects.
  • Unified Data: Facilitates comprehensive planning, review, and monitoring.

Expediting Mineral Auctions:

  • Authorised State Use: States can use PM Gati Shakti resources for defining mining areas.
  • Revised Rules: Amendments in September 2023 allow using online land records for classification.
  • Streamlined Process: Online records expedite land demarcation and preparation for auctions, replacing slower offline methods.

About Coal India Ltd (CIL):

  • Coal India Ltd (CIL): Largest coal producer and supplier in India.
  • Regulation: Operates under the Coal Mines (Nationalisation) Act of 1973, holding a monopoly on coal mining and distribution.
  • Ownership: Fully government-owned until disinvestment in 2010.
  • Current Status: Government holds a majority shareholding of 67%.