Source: The post India’s coal sector achieves growth through reforms and innovation has been created, based on the article “India’s coal sector is stepping up to fuel our economic expansion” published in “Live Mint” on 26 May 2025. India’s coal sector achieves growth through reforms and innovation.
UPSC Syllabus Topic: GS Paper1-Resource
Context: India’s coal sector has crossed a historic milestone by producing and dispatching over 1 billion tonnes of coal in 2024–25. This result stems from a decade of reforms and has triggered fresh updates to the Shakti Policy aimed at making coal allocation more transparent and efficient.
Decade of Reforms and Record Production
- From Deficit to Surplus: In 2014, coal production was insufficient. Between 2009–10 and 2013–14, it grew at just 1.89% annually, failing to meet the rising demand of a growing economy.
- Commercial Mining and Auctions: The 2015 cancellation of 204 coal blocks by the Supreme Court opened the door for change. Commercial coal miningbegan in 2020. By 2025, 150 mines have been auctioned across 11 rounds, with the 12th underway.
- Boost in State Revenues: Coal reforms have benefited state governments. ₹4.4 trillion has been earned from mining, including ₹1.6 trillion from coal alone through auction premiums and royalties.
Private Sector and Historical Shift in Policy
- Era of Public Monopoly: After Independence, coal production was state-controlled. A 1957 bill sought greater public control. By 1956, production was only 38 million tonnes.
- Slow Expansion: The sector saw poor growth due to distrust in private players. By 1990, coal output was only 200 million tonnes.
- Major Policy Shift: The new commercial auction regime has reversed this trend. It enabled private participation and created a competitive environment for coal production.
Sustainability and Technological Innovation
- New Green Focus: Sustainability is now a priority. Coal India is investing in solar, wind, and pumped storage projects. It also acquired a non-coal mineral block.
- Clean Transport Methods: The ministry is pushing for 90% mechanized coal loading through eco-friendly conveyor belts as part of first-mile connectivity projects.
- Underground Mining and Closures: Underground mining is safer and more eco-friendly. A roadmap to reach 100 million tonnes by 2029–30 is underway. Mine closure guidelines are also being revised.
Future Role of Coal in Energy Mix
- Declining Share, Strong Presence: Coal’s share in installed capacity has declined from 60% in 2014–15 to 47%, but it still supplies 79% of India’s electricity.
- Meeting Peak Demand: A summer action plan ensures stable supply. As of 21 May, thermal plants held 54.56 million tonnes of coal—enough for 20 days.
- Coal and Viksit Bharat: With per capita electricity use still below global levels, coal remains vital. India aims for a $35 trillion economy by 2047, with carbon neutrality by 2070.
Modernization and Global Leadership
- Technology Upgrade: Digital platforms with AI, 5G, and GPS are being used. A coal trading exchange is being developed for better efficiency and safety.
- Sector Image Revamped: Once seen as corrupt, the sector is now a symbol of modern, transparent, and sustainable mining, ready for global leadership.
Question for practice:
Discuss how reforms in India’s coal sector since 2014 have transformed production, sustainability, and transparency.
