Can Modi usher in energy reforms via small-govt mantra?

There has been a lot of talk about how the new government led by Narendra Modi will -- in line with its stated focus on 'less government, more governance' -- streamline several areas of the government machinery in a bid to bring about a smoother and more integrated functioning.

This, some reports say, could be brought about by merging several ministries into one, which could help smoothen decision-making, facilitate better governance and help economic growth.

One such area where such an approach could work is the energy sector. In an interview with CNBC-TV18, Suresh Prabhu, former power minister under the previous NDA regime, hinted at a more integrated approach towards tackling the country's energy challenge.

The energy sector faces challenges on several fronts: power distribution companies have piled up thousands of crores of losses on account of tariff not being raised enough to cover costs while coal (which is the key input for a majority of the country's power plants) is in such a state that despite being the world's fifth-largest producer, India has to import a third of its requirements.

Recent media reports have suggested the Modi government could look at integrating several ministries into one – there could be one 'super' energy ministry that combines the current petroleum, coal, power and renewables ministries.

Is such a plan feasible?

"I don't see a problem a combining all four ministries into one," SC Tripathi, a former oil secretary, told CNBC-TV18 in an interview. "In most countries, it (energy) is one ministry, or even combined with industry or natural resources."

He added that in India, both coal and hydrocarbons (oil & gas) serve the key function of producing power. "Both of these are complementary and substitutable," he says. "They should have one regulator, one legislation and one ministry."

Tripathi even suggested the government could open up the coal sector and allow oil & gas companies such as ONGC to explore coal mines. "We have an acute dearth of sources, investment and technology in the coal sector. While there is a relatively liberal regime in the hydrocarbons space."

"World over, this (allowing oil & gas companies get into coal exploration) is followed. [Australian miner] BHP Billiton explores both," he says.

The coal sector indeed has been marred with underperformance. State-run Coal India , which produces about 80 percent of Indian's coal output has consistently missed its output target for years.

But even as such ideas sound bold -- creating a super energy ministry, allowing oil & gas players to venture into coal, or even break up Coal India into subsidiaries as was reported in an Economic Times article -- are they practically feasible?

"The idea of combining ministries is a workable solution," RV Shahi, the country's former power secretary, says. "But I won't necessarily agree with the idea of allowing an ONGC to explore coal mines. The oil & gas companies have been beset with their own problems."

Sure enough, the oil & gas sector has been marred with its own issues such as allegations of price-rigging where private players such as Reliance Industries or foreign companies such as BP came into play.

"But combining ministries, even if it's a two-step process, is an idea that should be taken up," Shahi says.

Tripathi says he had pitched the idea to former prime minister Manmohan Singh. "He seemed to have liked the idea. But he said that due to prevailing coalition dharma, there have to be as many ministries."

With coalition dharma out of the way and with the BJP being a party with majority, will Modi be able to deliver?

"He has talked about development," Tripathi says. "Development and a robust energy sector are two sides of the same coin. Let us hope he will be able to bring in reforms."