The Screening Committee

The Screening Committee

6. Until now, how have coal blocks been allocated to private companies?
Prior to 1993, the government had no established criteria for the allocation of coal blocks.
The government mostly allotted the blocks on the basis for recommendation from the concerned
State Governments. However, from 1993 onwards, the Ministry of Coal allotted the
coal blocks it had identified through a Screening Committee under the Chairmanship of the
Secretary (Coal), or through direct allocation in the case of government companies. 1993 was
also the year that coal mining was allowed for the purpose of power generation.5
In 2004, the government made public its intention to allot coal blocks through competitive
bidding, as there was a "windfall gain to the person allotted a captive block," which could be
realised by the government through auction. As the price of coal had increased, and the
demand for coal blocks started exceeding supply, a change in policy was required. But, the government
did not alter its policy on allocation until the Mines and Minerals (Development &
Regulation) Amendment Act was passed in 2010,6 allowing for competitive bidding. Even so,
the government took an additional 2 years to introduce rules under the Act. And perhaps they
will take another 2 years for actually implementing the policy. Until now, no coal blocks have
been allotted through this method.