National Coal Index (NCI)
Context:
The National Coal Index (NCI) experienced a 3.83-point increase in September 2023, primarily influenced by the temporary surge in global coal prices.
Relevance:
GS – 1, GS – 2, GS – 3 (Growth & Development, Mobilization of Resources, Infrastructure, Government Policies & Interventions)
What is the National Coal Index?
- The NCI serves as a price index, indicating the monthly change in coal prices relative to the fixed base year, which is FY 2017-18. It encompasses coal prices from all sales channels, including imports.
- The base year for the NCI is FY 2017-18.
- The amount of revenue share per tonne of coal produced from auctioned blocks would be arrived at using the NCI by means of a defined formula.
- NCI was rolled out in June 2020 and the same is placed on the website of the Ministry of Coal.
- It is composed of a set of five sub-indices.:
- There are three for Non-Coking Coal and two for Coking Coal.
- The three sub-indices for Non Coking Coal are combined to arrive at the Index for Non Coking Coal and the two sub-indices for Coking Coal are combined to arrive at the Index for Coking Coal.
- Thus, indices are separate for Non-coking and Coking Coal.
- As per the grade of coal pertaining to a mine, the appropriate sub-index is used to arrive at the revenue share.
