Government rolls out National Coal Index

The coal ministry has rolled out the National Coal Index to be used for the purpose of auction of coal mines for commercial mining on revenue share basis.

NCI is based on the recommendation of the high powered committee headed by Pratyush Sinha and the detailed concept and the methology for the NCI has been developed been developed by the Indian Statistical Institute.

NCI is the weighted average of the change in the price level of coal-based on the price level of FY18. The index is compiled and presented at 5 sub-sector levels which are group of grades of coal.

These sub-sector indices are averaged to compile the index for non-coking and coking coal and also for the whole of Indian coal sector.

For the compilation of the index, all the three price channels like notified prices of Coal India, WCL and SCCL, auction prices of Coal India and import prices of coal are taken into account.

The prices of each channels are averaged with weights, which depend on sub-sectors.

The weights for each price are given in the following table.

The index for each sub-sector is a standalone index. These indices are averaged with their respective weights to get the index for non-coking coal and coking coal and finally to India coal sector as a whole.

The sources of date for the NCI are the notified prices of coal India (expect WCL), WCL, and SCCL for regulated as well as non-regulated sectors.

Monthly auction of coal data including linkages auction of Coal India and the import quantity and its value from the Directorate General of Commercial Intelligence and Statistics (DGCIS). DGCIS provides provisional import data and the same is finalized after a period of two months.

Till date, the ministry has received the final import figure till January. Import figures of February and March are provisional and to that extent the index for these two months are also provisional.