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Why Coal India Could Not Up Its Production

For all the problems that plague thermal power plants across India — coal stocks of just one week or projects struggling to come up for want of assured coal — Coal India Limited is mostly cited as the fall guy. This Public Sector Undertaking, which holds a near monopoly on coal in India, has seen its output stagnate in the last three years. While it is plagued by internal inefficiencies, the stagnation of CIL’s production at 431 million tonnes (MT) a year is largely the outcome of events beyond its control.

Out today, the second part of the story that appeared yesterday: why Coal India could not meet its production targets. Briefly, there were two ways in which it could have boosted production as companies began stampeding into power generation — commission new mines or extract more from existing ones. In this story, I argue that the UPA asset-stripped Coal India, giving it far fewer coal blocks than it needed to meet the country’s demands. Instead, the centre gave away far more captive coal blocks than it needed to. Creating this situation where a handful of companies have coal while most other companies — about two lakh companies participate in Coal India’s e-auctions alone — are struggling for coal.

The complete story, here.

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