As per the Planning Commission member B K Chaturvedi, increased domestic production of coal would help reduce its imports and in a way help contain the country’s widening current account deficit (CAD). India has substantial coal reserves, however demand for the dry fuel is much higher than domestic production, resulting in increased coal imports. In the recent period, the coal imports into the country have increased by almost 40 percent and touched $18 billion, which is twice the value of the import a few years ago. Meanwhile, the CAD widened to a record high of 4.8 percent of GDP in the previous fiscal.
He further said that, the domestic production of coal has to be increased to meet the demand of various segments, especially power sector as acute coal shortages in the country is hurting electricity generation and many power producers, which are dependent on imported fuel to fire their plants. Indian coal demand touched 772.84 million tonnes (MT) during 2012-13 period whereas production was at 557.60 MT. Import of coal steadily increased to around 113 MT till Jan during 2012-13 from 20.93 MT during 2000-01.
The government policy is very clear on increasing domestic coal output to cater to power generation needs, but there are certain issues to be sorted out like environmental clearances and land acquisition etc. He also suggested that the efficiency of power plants need to be improved so that less coal could be consumed for generating electricity.
