The government is expected to start auctioning coal blocks within the next two months, as per Coal Minister Sriprakash Jaiswal. The government has identified 54 coal blocks that will be auctioned to companies for industrial use. The acquiring companies will now be able to mine the dry fuel for their own requirements.
Keeping in view the increasing energy needs of the country, the government has also decided to set up a sovereign fund which will help coal companies acquire assets abroad. The fund will provide financial assistance to coal companies from the government for acquiring large assets.
The country has been facing acute shortage of coal in the recent months. Coal is critical for power generation in the country. The recent scarcity of coal has hurt not only the power companies but various other sectors also.
The government, in its attempt to solve the woes of the power sector, has forced Coal India to sign fuel supply agreements (FSA) with power companies. As per the FSAs Coal India is required to supply coal to the power companies to the extent of 80% of their requirements, even if it means importing coal from abroad. The demand supply gap of coal was estimated to be 142 million tonne in the last fiscal.
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