PRATYUSH SINHA COMMITTEE

Background:

• The current system of coal block allocation via e-auctions was put in place after the cancellation of 204 coal-block allocations in 2015
  
  
• However, the e-auctions failed to sustain interest as companies which bought the blocks found it cheaper to import coal to meet their requirements rather than developing the mines.
  
  
• There were no takers for subsequent blocks, forcing the Centre to do a rethink.
  
  
• In July 2018, a High-Powered Expert Committee (HPEC) chaired by Pratyush Sinha submitted its report suggesting major changes in the coal block auction system.
  
  

Recommendations:

• The recommendation of Pratyush Sinha committee coincides with the opening up of the coal sector for commercial mining.
  
  
• These recommendations rest on four tenets — ensuring transparency and fairness, equity, early development of coal blocks and simplicity of implementation.
  
  
• Key recommendation:
  • Developing a Coal Index for determining the value of blocks. Currently, the valuation is on the basis of the notified price of Coal India Ltd.
    
    
  • Scrap the current practice of cancelling an auction if the number of bidders is less than three. Instead a single-bid should be accepted if biddings fail to find eligible bidders.
    
    
  • Only a default in achieving critical milestones should attract penalty against the earlier penalty for each default.