The constitution of a Coal Regulatory Authority (CRA) has been long-in-waiting and the notification on it was initially welcomed by all. But the primary effusion seems to have given way to a sense of disappointment and resignation with many feeling that it is little more than an eye-wash.
The main reason is that the proposed authority will not really be independent — defeating the purpose behind the entire exercise. The notification issued earlier this week says that the CRA will be under the overall administrative control of the Union Coal Ministry, which also administers Coal India Ltd., which accounts for over 85 per cent of the output and enjoys a virtual monopoly.
Although coal users were keen that the CRA should have a regulatory role on prices, the government had not let that happen perhaps sensing that it would set the clock back on CIL as coal prices were deregulated long ago (although it is well nigh impossible to get through a price revision without the nod of the largest shareholder).
The primary functions of the Authority will be to advice the Central Government on the formulation of the principles and methodologies for determination of price of raw coal, washed coal and on the procedure for automatic coal sampling.
The appointment of the members, too, is slated to be controlled by the government with a committee tasked to the job. The committee includes the chairman of the Public Enterprises Board. This would make it just another government body, as the need of the hour was to appoint independent sector experts from outside the government like the other regulatory bodies, now in operation. Coal-users forum welcomed the move on the CRA, but also rued the fact that it would not be an independent authority to oversee and, if necessary, rule over issues such as quality which remains a disputed area.
Many question the rush over the matter at a time when the government is in the election mode. The CRA Bill was introduced in the Lok Sabha in December 2013 and the legislation is pending in Parliament which could transact little business at its last few sessions.
Although the government had to form an interim body till the proposed statutory Authority is constituted, it needs to be borne in mind that the first CRA will be more than an interim arrangement with the members having a five-year term.
If the Authority is also constituted then its composition cannot be changed for the next five years and it will run under the watchful eye of the Big Brother.
