Despite being one of the largest coal producers, India depends on imports to meet its demands.” Critically examine the issues which domestic coal industry is facing.

Answer  – India is one of biggest coal producer in the world. However, since the domestic demand is greater than domestic production, along with that quality of coal is another problem, as most of the Indian coal has high ash content( not suitable from the industrial point of view) therefore the demands are met through imports. In order to boost domestic production government has set ambitious target 1.5 billion ton coal production by 2021.

However, there are certain issues which impede the domestic coal production in India.

  • Problem of Land Acquisitionlargest coal producers
  • Delay in government clearances
  • Discontinuance of work
  • Infrastructural bottleneck
  • Protests by NGOs:
  • Poor Efficiency
  • Low cost of Imported Coal
  • Many power plants are designed to run on foreign coal


Problem of Land Acquisition

  • One of the major reason is the issue of land acquisition and associated problems of rehabilitation and forestry clearances.
  • A recent example is Reliance Power cancelling the Tilaiya Ultra Mega Power Project and associated 40 million tpa coal mine, stating that it was due to the government not providing the required land.
  • This is also why the major Indian companies (including Coal India) have
  • been on a shopping spree to purchase mining leases outside of India

Delay in government clearances

  • Another issue is that projects are running behind schedule due to reasons such as delay in green clearances and law and order problems.

Discontinuance of work:

  • Delay or discontinuance of work or non- participation in the  tender by the contractor is also one of reason which creates problems for the domestic coal industry.

Protests by NGOs:

  • As per IB report, some of foreign funded NGOs are involved in stalling the development process. Their areas of action include anti-nuclear, anti-coal and anti-GM crops protests.

Poor Efficiency:

  • Efficiency in coal India is another issue.


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