The government has promulgated an ordinance on e-auction of coal blocks. President Pranab Mukherjee signed it a short while ago.

Union Cabinet had on Monday recommended promulgation of the ordinance to take back cancelled coal blocks and reallocate them.

All companies, except those convicted by courts, will be allowed to participate in the auction. The decision followed Supreme Court's judgement quashing allocation of coal blocks allotted by screening Committee during previous regimes.

Government will put coal blocks on e-auction for private players in cement, steel and power sectors. Public sector requirements would be met through government dispensation route and coal mines would be allocated to PSUs like NTPC or state electricity boards.

Finance Minister Arun Jaitley said the e-auction process will be transparent and completed in three to four months.

FICCI Director General Arbind Prasad said it is a welcome move and will result in un-interrupted supply of coal.

The e-auction process is being seen as a step towards energy sector reforms. It is expected to provide impetus to manufacturing sector and help save foreign exchange on coal imports.