India has given the go-ahead for the creation of a regulator for the country's coal sector.

"The Cabinet Committee on Economic Affairs has given [the] nod to the proposal to set up [a] coal regulator through an executive order," Press Trust of India quoted a senior minister as saying Thursday.

Coal minister Sriprakash Jaiswal had informed Parliament last week the regulator would be set up by executive order "as enactment of legislation would take some time," Press Trust reports.

The bill is pending but the current session of Parliament is the last before a general election likely to take place in April and May.

Nearly 70 percent of India's electricity is generated by coal. "India's coal-centered energy landscape will not change dramatically over the next 30 years," the International Energy Agency stated in a 2012 report.

India's Ministry of Power estimates 62 gigawatts of the 75 GW of electricity production the country needs by 2017 will be met by coal.

Finance minister P. Chidambaram has said while the coal regulator would not be responsible for the pricing of coal, it would be responsible for resolving disputes, including those arising out of fuel supply agreements.

State-run Coal India, which meets more than 80 percent of the country's need for coal, will continue to enjoy freedom in setting prices, the Business Standard reported. The world's biggest coal company by output, Coal India has been criticized for insufficient production to meet demand and for mismanaging the country's resources.

The coal regulator also will not have a say in the allocation of coal acreages. Indian state auditors in a 2012 report said the country lost $33 billion allotting coalfields at below market rates in the years up to 2009.

While India has the fifth largest coal reserves in the world, its coal sector "is one of the most centralized and inefficient sectors in India," the U.S. Energy Information Administration said.

The PHD Chamber of Commerce and Industry, which covers 12 Indian states and is based in New Delhi, applauded the Cabinet's nod for the independent coal regulator.

"The decision has come as a step to infuse transparency and efficiency in the coal sector as it will revive the corporate investments and refuel the economic growth," chamber President Sharad Jaipuria said in a statement Thursday. "The coal regulator would help in streamlining the authoritarian framework of the sector."

Jaipuria added the regulator would help to attract private investments and offer a competitive level playing field.