India’s Coal Boom

Syllabus: GS3/ Economy

Context

• India achieved a historic milestone as it crossed one billion tonnes (BT) of coal production in March in 2024-25, surpassing last fiscal year’s 997.83 million tonnes (MT).

About

• India, with the fifth-largest coal reserves and being the second-largest consumer, heavily depends on coal.
• Coal contributes 55% to the energy mix and powers over 74% of electricity generation in India.

Growth in Coal Production and Dispatch

• India’s coal production has reached 1047.57 MT (Provisional) in FY 2024-25.
  • Coal production refers to the extraction of coal from mines.
• Coal dispatch has also crossed the One BT milestone, with total dispatch reaching 1024.99 MT (Provisional).
  • Coal dispatch refers to the process of transporting and distributing that coal to various consumers, including power plants and industrial facilities.
• Coal imports fell 8.4% to 183.42 MT in April-December 2024 in the same period of FY 2023-24, saving $5.43 billion in foreign exchange. 

Government initiatives

• Commercial Coal Mining opened the sector to private players to boost production, efficiency, and competitiveness.
• Mission Coking Coal aims to reduce import dependence by enhancing domestic coking coal availability.
• Safety measures: Directorate General of Mines Safety revamped the Coal Mines Regulations 1957 into The Coal Mines Regulations 2017, addressing modernisation, mechanisation, emergency response, and evacuation planning.
• Coal Mitra Portal developed for flexible coal allocation to power plants, ensuring better coal supply management.

Economic significance of the coal sector

• Railways & revenue: Coal stands as the single largest contributor to railway freight, with an average share of nearly 49% of total freight income amounting to Rs. 82,275 Crore in the fiscal year 2022-23 alone. 
• Government earnings: The coal sector contributes over Rs. 70,000 Crore annually to the central and state governments through royalties, GST, and other levies. 
• Employment: The sector provides jobs to over 239,000 workers in Coal India Ltd and thousands more in contractual and transport roles.

Coal gasification initiative

• Coal gasification converts coal into syngas, which can be used for producing methanol, ammonium nitrate, Synthetic Natural Gas (SNG), and fertilisers. 
• The Government has undertaken the following coal gasification initiatives:
  • Financial incentive: The Government approved ₹8,500 crore for promoting coal/lignite gasification projects for PSUs and the private sector.
  • Revenue share rebate: A 50% rebate in revenue share for coal used in gasification has been introduced in commercial coal block auctions, provided at least 10% of the total coal production is used for gasification.

Concluding remarks

• The coal sector remains central to India’s energy and economic goals. Rising production, clean coal initiatives, and tech-driven safety and sustainability efforts reflect its evolving role. 
• With strong government support and workforce commitment, the sector is set to drive India’s journey toward self-reliance and development by 2047.

Source: PIB