The government is planning to amend the existing Mine and Minerals Act 1957 to bring in more transparency into the process of handing over coal blocks for development to central and private agencies.
The government proposes to incorporate a mandatory provision in the Act that would enable handing over of coal block only through competitive bidding route. The amendment is expected to inject transparency in placement of awards and do away with the possibilities of any sort of favoritism that may have been practiced in award of coal blocks till now.
However, the central government would still have the right to allot the coal blocks to the central public sector undertakings as per its own decision. Also, if the company—public or private—has bagged power project on the basis of tariff-based bidding, it will remain outside the purview of this amendment. The coal blocks to such projects would be provided on a priority basis.
The government's decision to award the coal blocks for mining to the utilities has raised questions in the past. A total of 15 coal blocks with reserves worth around Rs 5.37 trillion were allotted to 31 companies in October 2007. In an investigation launched to nail down the irregularities in the whole award process, it had turned out that 9 of the 31 companies were awarded rights despite being rejected in earlier stages of the bidding process for not meeting the government's prescribed criteria.

— Mrinalini Prasad