Commercial Mining of Coal Blocks has been approved by the Cabinet Committee of Economic Affairs. In the auction process, the National Coal Index (NCI) and Representative Prices (RP) would play very important role. The concept and design of the Index as well as the Representative Prices have been developed by the Indian Statistical Institute, Kolkata. The present guidelines give the technical details which are to be followed at different stages of compilation of NCI and RP in conformity with the Standard Operating Procedure (SOP) issued by the Ministry of Coal.

Brief Ingredients of NCI and RP: NCI is a price index combining the prices of coal from all the sales channels- Notified Prices, Auction Prices and Import Prices.
The Majority of coal is sold through the Notified Prices. For Non-Coking Coal, CIL fixes notified prices for each grade. There is price discrimination as to the Regulated Sector and Non- Regulated Sector (NRS). Again, due to cost considerations, different Notified Price dispensation has been made for WCL coal. Similarly, SCCL also notifies prices for different grades of coal- with price differentiation between Regulated and Non- Regulated Sectors. In respect of Coking Coal, only certain Subsidiaries of CIL are producing. The power of notifying the prices of Coking Coal has been delegated to the Subsidiaries. The Notified Prices of each grade of coal for Regulated and NRS and for CIL (Except WCL), WCL and SCCL for Non-Coking Coal and Notified Prices for Coking Coal of different Subsidiaries of different grades-for Regulated Sector as well as NRS would be taken for the purpose of NCI as well as the RP.

Apart from sales at Notified Prices, CIL and SCCL undertake e-Auction of Coal on different platforms- MSTC and Junction. For this purpose, a set of schemes are there meant for a particular type of customer. The auction is conducted each month. Also, CIL undertakes Linkage Auction for NRS. For the purpose of NCI and RP, the Unit Value of Coal of different Grades from auction (of CIL only) would be taken into account. The auction, for this purpose, means both e-auction and Linkage Auction.

The third component of the NCI and RP is the Import Prices. For compilation of both, only imports of specific types of coal from specified countries would be taken into consideration. For each month, the quantity of import and its value would be collected from DGCIS and from these two values, Unit Value of Coal would be computed for its use in NCI as well as RP.

Data Collection: Duty of collection of different types of price data rests completely on the DDG Office. DDG has to pursue with the Officers of Marketing Division, CIL and DGCIS to make best efforts to collect the data within the expressed time limits. In order to get the Notified Prices of Coking Coal, regular interaction is done by the DDG with CIL for the coking coal prices of BCCL, CCL, ECL and WCL, whose data are relevant for the purpose.

The NCI is released by the Ministry every month.