The union government is likely to speed up the process of setting up a new coal regulatory body in the country and also auction of coal mining blocks in wake of the allegations that faulty policies cost billions of dollars in lost revenues to the country.

A leaked report by CAG that published by section of media said that the nation lost Rs 10.7 lakh crore of revenue by allotting coal blocks to companies directly and not conduction auctions.

According to experts, the controversy will mostly likely put pressure on the government to quickly set up a regulator and make the pricing and auction process for coal mining blaock more transparent.

Power companies believe that a new regulator will ensure transparency and proper allocations of blocks. Senior executives in utility firms have said that a coal regulator will be able to keep a check on issues relating to coal pricing and the quality of coal.

"Now that the problems relating to coal block allocation are in the limelight, it will make for a stronger case for speeding up auction of coal blocks," said Association of Power Producers' Director General Ashok Khurana.

Meanwhile, Arup Roy Choudhary, the Chairman and Managing Director of state-run NTPC has said dismissed reports suggesting that the state run companies befitted from the failure of the government to auction coal assets in the country.

He said that NTPC did not earn any windfall profit from the coal produced from the mines because the CERC-regulated regime makes the cost of coal from these mines a pass-through in the power tariff. Thus, the ultimate benefit in cost savings will be given to the users.