NEW DELHI, June 21 (Reuters) - India has decided to allow
power companies to pass on the costs of foreign coal to
customers, a minister said, a move likely to boost imports and
investment in power generation, but bringing higher energy
prices to consumers.
A proposal to raise gas prices has been deferred,
information and broadcasting minister Manish Tiwari told
reporters after a cabinet meeting.
India is the world's third-largest producer of coal and more
than half the country's power comes from burning the fuel, but
domestic output falls short of demand, triggering frequent and
lengthy power cuts in Asia's third-largest economy.
It also means power producers have to turn to expensive coal
imports and until now, they have not been able to pass these
costs fully on to customers.
The move comes as the coalition government is trying to
tackle a raft of economic reforms, some of them leading to
unpopular price rises and some giving benefits to powerful vote
banks ahead of state elections this year and national elections
(Reporting by Nigam Prusty; Editing by Prateek Chatterjee)