The government will soon set up an inter-ministerial panel for the development of underground coal gasification in coal and lignite bearing areas.
"The inter-ministerial committee will soon get the approval of the competent authority," an official said.
The eight-member panel under the chairmanship of Additional Secretary Coal will have members from ministries such as Petroleum and Natural Gas, the official said.
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The Union Cabinet last month approved a policy for developing Underground Coal Gasification (UCG) in coal and lignite bearing areas in the country.
A policy on the lines of the existing policy for Coal Bed Methane (CBM) development on a revenue sharing basis will be adopted to offer the blocks through competitive bidding.
UCG is a method of extraction of energy from coal/lignite resources which are otherwise regarded as uneconomical to work through conventional mining methods.