The Supreme Court on Wednesday has cancelled 214 coal blocks, which were declared illegal by it in a previous judgement. The apex court has exempted 4 coal blocks allocated to SAIL, NTPC and Sasan UMPP from cancellation. The apex court has given 6-month period to stop the production to existing coal block operators.

The apex court has asked the government to make appropriate arranagements for reallocation of coal blocks within 6 months. After March 2015, the government can auction the aforesaid coal blocks, the court said. 

Commenting on court ruling on coal block allocation, CRISIL Research said, ''The impact of de-allocation of operational coal blocks on 7-8 GW of linked power projects will be limited as these operate under a fixed return model. Moreover, we expect alternate domestic coal supply (albeit at a higher price as compared to captive coal) to be provided to these projects as most of these are operated by state owned utilities.''

''We expect the power purchase cost for utilities to rise, particularly in West Bengal and Punjab, where it would increase by Rs. 0.5-0.8 per unit given that a these plants account for a large share of power purchase. However, at a pan-India level, we expect the impact to be negligible as these plants account for less than 5 per cent share of total generation,'' it added.

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