NEW DELHI, July 9 India needs to restructure
state behemoth Coal India Ltd quickly to raise output
to feed fuel-starved power plants, the finance ministry said in
a report, as the country grapples with rising imports amid a
push for electricity to all.
Coal India (CIL), the world's largest coal miner, accounts
for about 80 percent of India's production of the black rock but
has failed to meet its output targets for years due to delays in
obtaining environmental approvals to expand mines and what
critics say are inefficiencies owing to its size.
Millions go without power in India and blackouts are common.
"The process of restructuring CIL needs to be pushed through
swiftly to boost coal production," said the finance ministry in
the Economic Survey report presented to parliament on Wednesday.
The report - submitted a day before Finance Minister Arun
Jaitley delivers his maiden budget - did not say what kind of
restructuring it was recommending for CIL.
Reuters reported in May that newly elected Prime Minister
Narendra Modi could explore breaking up some of CIL's eight
local units and making state governments equity holders to help
speed land acquisition and other such processes.
The government should also allow commercial mining by
private companies, said the ministry's report.
Power, steel and other firms can mine coal only for their
own use in India, the world's third-largest coal importer
despite sitting on the fifth-largest reserves of the fuel.
"Since mining involves huge sunk cost, the government should
allow only a limited number of large domestic companies with
proven track record to compete with CIL and also to bring in the
latest technology and skills," the Economic Survey report said.
India's coal production was 566 million tonnes in the fiscal
year ended March 31, but demand was in the range of 715-720
million. Power generation rose 6 percent last fiscal year and 4
per cent the previous financial year.
Nearly half of India's coal-fired power plants have only
enough stocks to last a week or less, a shortage that could
become critical and drive up thermal coal imports by 14 percent
this calendar year, as weak monsoon rains are expected to cut
output from hydropower.
"(A) sharp deceleration in the production of natural gas in
the past two-three years has further increased the energy
sector's dependence on coal," the report said.
(Reporting by Krishna N Das; Editing by Tom Hogue)