Planning Commission Deputy Chairman Montek Singh Ahluwalia on Wednesday advocated increasing price of coal to prevent distortions in domestic energy market.

Speaking at the KPMG Energy Conclave in Delhi, Mr. Ahluwalia said energy in India is underpriced, which has led to distortions in market.

“Indian coal is priced much below imported coal. Even after price is adjusted in terms of calorific value, it is low. We should try to align the domestic coal price to international. Even if you do not do that, the coal prices would certainly go up... And that is an important issue that we have to face,” he said.

“Because of the cheaper domestic supply, the demand is more and it is distorting the market. We solve that problem by ultimately pooling of coal,” he said.

“Energy in India is seriously underpriced. We need to make people understand that a trajectory of rapid growth is needed in energy pricing. This correction has to be done over a period of time, not immediately,” he said.

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