September 08, 2008

Changes in policy for leasing of coal blocks

Dr Dasari Narayana Rao union minister informed Indian parliament that Indian government is contemplating changes in the present policy for leasing of lignite or coal blocks.

He said that “In order to make the policy for leasing of lignite and coal blocks more transparent and objective in the context of increasing number of applications and declining number of coal and lignite blocks, the government is contemplating to introduce a system of auctioning through competitive bidding for allocation of such blocks by making necessary amendments in the mines and minerals development and regulation Act 1957.”

He added that “The government proposes to transfer the entire resource raised through competitive bidding to the concerned state government where the coal block is located.”

Under the existing provisions of the Act, prior approval of the central government is necessary before state governments can grant mining lease in respect of coal lignite and other minerals included in the first schedule of the Act.