Why in news?
- During the launching of the sixth-round commercial coal mines’ auction for 141 coal mines, the ministry of Coal decided to annually revise the Performance Bank Guarantee (PBG) based on the National Coal Index (NCI) for April at the beginning of the year 2023.
What is National Coal Index?
- The NCI is a price index which reflects the change in the price level of coal on a particular month relative to the fixed base year.
- This price index combines the prices of coal from all the sales channels- Notified Prices, Auction Prices and Import Prices.
- It has been rolled out on 4th June 2020 and the aim is to have an index that will truly reflect the market price.
- The base year is FY 2017-18.
- The concept and design of the Index as well as the Representative Prices have been developed by the Indian Statistical Institute, Kolkata.
What is a coal auction?
- An auction-based regime was introduced in 2014, which allowed private sector participation. The sector has recently been opened for commercial mining by the private sector.
