Government Approves Revised SHAKTI Policy | Current Affairs | Vision IAS
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Government Approves Revised SHAKTI Policy

Posted 08 May 2025

2 min read

The Cabinet Committee on Economic Affairs approved the Revised SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy for Coal Allocation to the Power Sector. 

  • Introduced in 2017 by Ministry of Coal, SHAKTI Policy is a transparent way of allocating coal to Power Sector.

Key Highlights of the Revised SHAKTI Policy

  • Aim: To address the sector’s dynamic coal demands while promoting import substitution and reducing dependence on imported coal.
  • Simplified Allocation Framework: It streamlines coal allocation by consolidating the earlier 8 categories into 2 simplified mechanisms to enhance ease of doing business in the power sector.
    • Window-I: Coal linkages at notified prices will continue to be provided to thermal power plants owned by Central and State Governments, including their joint ventures & subsidiaries.
    • Window-II: All thermal power producers, including those using domestic or imported coal, can now procure coal through an auction process, paying a premium over the notified price.
  • Removal of Mandatory PPAs (Power Purchase Agreements): For Window-II, the PPA requirement has been scrapped, encouraging private sector participation.
  • Caters to Sector’s Dynamic Coal Demands: Auctions will allow procurement for periods ranging from up to 12 months to as long as 25 years.
  • Preference to ‘Pithead’ Power Plants: Promote setting up of Greenfield Thermal Power Projects primarily at pithead sites, i.e., nearer to the coal source.

Other Key Reforms in the Coal Sector

  • Coal Mines (Special Provisions) Act, 2015: Introduced a transparent auction process, enabling private sector participation, enhancing government revenue etc.
  • Mines and Minerals (Development and Regulation) Amendment Act, 2021: Introduced composite Prospecting Licence-cum-Mining Lease (PL-cum-ML).
  • Commercial Coal Mining (2020): Allowed private players to mine coal for commercial use without end-use restrictions.
  • Coal Mines Surveillance and Management System & Khanan Prahari App: To Strengthen monitoring of illegal mining.
  • Tags :
  • SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India) Policy
  • Revised SHAKTI Policy
  • Reforms in the Coal Sector
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