The government has set coal production and offtake targets at 507 million tonnes and 520 million tonnes for Coal India Ltd (CIL) for the financial year 15. Public sector enterprise Coal India Ltd is the only producer of domestic coal accounting for around 80 percent of the domestic production. However, it looks difficult to achieve the set targets, as the company requires extraordinary efforts to enhance the coal production by 9.6 percent and off take by 10.3 percent to meet the coal production and off take target for current fiscal.
At present, CIL is struggling to meet domestic coal requirements and its production fell 4.21 percent short of its production target at 462.53 million tonnes in FY14 amid concerns like shutdown of mining activities in Talcher Coalfields in Odisha. The CIL’s coal production and off take grew only by 2.3 percent and 1.4 percent respectively in the previous year.
India, despite being world's fifth largest in terms of reserves and the third-largest producer of coal, has failed to keep pace with increasing domestic demand. Indian domestic coal demand is around 35 percent higher than domestic supply, resulting into a high deficit of which a huge part is being met by costly imports from Indonesia, South Africa and Australia. Acute coal shortages in the country have become primary reason for power deficit as coal-fired plants account for 68% of India's installed electricity capacity.
Meanwhile, in order to meet India’s growing coal demand, the government has planned to invite bids from private players to start coal mining in a public-private partnership (PPP) mode in the country, which would also end the monopoly of public sector unit Coal India.
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