Brief Context
India achieved a historic milestone as it crossed one billion tonnes (BT) of coal production in March in 2024-25, surpassing last fiscal years 997.83 million tonnes (MT).
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Syllabus: GS3/ Economy
Context
- India achieved a historic milestone as it crossed one billion tonnes (BT) of coal production in March in 2024-25, surpassing last fiscal year’s 997.83 million tonnes (MT).
About
- India, with the fifth-largest coal reserves and being the second-largest consumer, heavily depends on coal.
- Coal contributes 55% to the energy mix and powers over 74% of electricity generation in India.
Growth in Coal Production and Dispatch
- India’s coal production has reached 1047.57 MT (Provisional) in FY 2024-25.
- Coal production refers to the extraction of coal from mines.
- Coal dispatch has also crossed the One BT milestone, with total dispatch reaching 1024.99 MT (Provisional).
- Coal dispatch refers to the process of transporting and distributing that coal to various consumers, including power plants and industrial facilities.
- Coal imports fell 8.4% to 183.42 MT in April-December 2024 in the same period of FY 2023-24, saving $5.43 billion in foreign exchange.
Government initiatives
- Commercial Coal Mining opened the sector to private players to boost production, efficiency, and competitiveness.
- Mission Coking Coal aims to reduce import dependence by enhancing domestic coking coal availability.
- Safety measures: Directorate General of Mines Safety revamped the Coal Mines Regulations 1957 into The Coal Mines Regulations 2017, addressing modernisation, mechanisation, emergency response, and evacuation planning.
- Coal Mitra Portal developed for flexible coal allocation to power plants, ensuring better coal supply management.
Economic significance of the coal sector
- Railways & revenue: Coal stands as the single largest contributor to railway freight, with an average share of nearly 49% of total freight income amounting to Rs. 82,275 Crore in the fiscal year 2022-23 alone.
- Government earnings: The coal sector contributes over Rs. 70,000 Crore annually to the central and state governments through royalties, GST, and other levies.
- Employment: The sector provides jobs to over 239,000 workers in Coal India Ltd and thousands more in contractual and transport roles.
Coal gasification initiative
- Coal gasification converts coal into syngas, which can be used for producing methanol, ammonium nitrate, Synthetic Natural Gas (SNG), and fertilisers.
- The Government has undertaken the following coal gasification initiatives:
- Financial incentive: The Government approved ₹8,500 crore for promoting coal/lignite gasification projects for PSUs and the private sector.
- Revenue share rebate: A 50% rebate in revenue share for coal used in gasification has been introduced in commercial coal block auctions, provided at least 10% of the total coal production is used for gasification.
Concluding remarks
- The coal sector remains central to India’s energy and economic goals. Rising production, clean coal initiatives, and tech-driven safety and sustainability efforts reflect its evolving role.
- With strong government support and workforce commitment, the sector is set to drive India’s journey toward self-reliance and development by 2047.
Source: PIB