New Delhi, Dec 13 (IANS): A bill to institute an independent coal sector regulator was introduced in the Lok Sabha Friday by Coal Minister Sriprakash Jaiswal.

The Coal Regulatory Authority Bill, 2013 seeks to put in place the regulatory body which would specify methods of testing for coal grades or quality, monitor and enforce closure of mines, and specify principles and methodologies for price determination of raw and washed coal.

While the proposed regulator would chart out principles and methodology for fixing prices, it would neither have the authority to allocate blocks nor determine prices of coal.

As regulator, it would also be vested with the task of adjudicating on disputes between parties.

"The bill provides for creation of a fund called 'Coal Regulatory Authority Fund', whenever all grants, fees, charges received by the authority shall be credited. However, start-up funding will be provided by the government," the statement of objects and reasons of the bill stated.

The union cabinet had, in June, approved the proposal for setting up a coal regulator.

The bill comes in the context of a host of problems plaguing the sector including production shortfalls that touched 135 million tonnes in the last fiscal.

Coal India (CIL) has a near monopoly of production, and the Competition Commission of India (CCI) earlier this week penalised the state miner Rs.1,773.05 crore for abusing its dominant position.