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The cabinet on Thursday approved the creation of a coal regulator in an attempt to usher in some transparency in a sector that’s currently under a cloud because of issues ranging from falling domestic production and opaque pricing to irregularities in the allotment of mines.

The regulator has been set up by an executive order because there is little chance of the Coal Regulatory Authority Bill of 2013 even being taken up in the current session of Parliament, the 15th Lok Sabha’s last before a general election that will likely be held in April and May.

The coal regulator, however, does not have a statutory status, and while it will decide on the method of determining the price, it will have no authority to specify a price. State-owned Coal India Ltd, whose inability to raise production has resulted in an increase in coal imports, will continue to fix the price.

The regulator will also specify methods for testing grades or the quality of coal and for automatic coal sampling. It will decide on disputes through an appellate authority. Significantly, the regulator will determine terms on which the Centre grants permission to start a coal mine or withdraw permission for it.

The Supreme Court is monitoring an investigation by the Central Bureau of Investigation (CBI) into irregularities in the allotment of coal mines between 1993 and 2010. The government’s auditor said in a report presented in Parliament in 2012 that these irregularities had cost the government INR 1.86 trillion in notional losses. The new regulator, though, will only have advisory powers even as far as the grant or revocation of mines is concerned.

Dipesh Dipu, an energy analyst and partner at Jenissi Management Consultants, said that the pricing issue notwithstanding, the creation of the regulator is a positive development. “I think it would positively impact the industry. But pricing would have ideally been a key issue because at the end of the day, the coal industry is not entirely open.”

Dipu added that in future the government could enhance the powers of the regulator. Others weren’t as optimistic. “The common knowledge is that the Prime Minister’s office (PMO) is supposed to monitor processes like tendering and monitoring, and setting up of this body is indirectly accepting that the PMO could not do it,” N. Bhaskara Rao, a New Delhi-based political analyst, said. “In reality it does not mean anything more than a talking point. It has no practical implication because by the time this gets implemented, a new government will come in.”

On 8 May, finance minister P. Chidambaram said that the pricing of coal would be kept out of the ambit of the coal regulator, and that it would be empowered to resolve disputes, including those arising out of fuel supply agreements with power and other projects that need coal.

“There is an agreement that pricing must be left to the producer of coal, but the regulator will have powers to adjudicate on disputes relating to price, quality, supplies. All disputes will be adjudicated with the regulator and then there will be an appellate authority,” the Press Trust of India news agency cited Chidambaram as saying in May.

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