Our country is endowed with 5th largest geological reserves of coal.  We are 2nd largest consumer of coal. More than 70 per cent of our power generation is contributed by Thermal Power Plants. For a growing economy, the requirement for power is fast increasing. The Indian coal sector has undergone radical changes during the last 10 years.

The all-encompassing strategy, evident in initiatives such as commercial coal mining, policy reforms, gasification endeavours and a commitment to sustainable practices, signifies a radical shift towards efficiency, responsibility and resilience. India's coal sector's transformative journey extends beyond addressing energy demands; it lays the foundation for a sustainable and self-sufficient future. This multifaceted approach encompasses policy reforms, production growth, environmental stewardship, logistical enhancements and social responsibility.

The coal production which was 382.62 million tons in the year 2004-05 has grown to 893.19 MT in 2022-23 and is all set to touch 1000 MT in the year 2023-24. The overall annual Coal Production has surged from 565.77 MT in FY 2013-14 to 893.19 MT in FY 2022-23, witnessing a massive growth of 57.87 per cent over the last 10 years.

The Compound annual growth rate of coal production from 2008-09 to 2013-14 was 2.8 per cent. Had this trend continued then the coal production in 2022-23 would have been only 725.39 MT.  With the continuous proactive initiatives of the Government, the CAGR has been at a 5.20 per cent high with the production in 2022-23 being 893.19 MT. This jump in production of 167.80 MT has helped in the reduction of coal import, which the country would have been compelled to import had the CAGR remained at the meagre 2.8 per cent as was the scenario before 2014.

India fulfils most of its coal needs through domestic production and supply. Coal India Limited plays a dominant role, contributing over 80 per cent of the country's indigenous coal production and supply. Under the current system, public sector coal companies, including CIL, supply coal to the power sector at notified prices.

There has been no increase in the notified price by CIL since 2018. The recent price revision was done by CIL in May 2022, in which the company has hiked only the notified prices for high-grade coal of Grade G2 to G10 by 8 percent to increase production of high grade coal and reduce the dependence on imports. This marginal price increase will affect less than 28 per cent of dispatches of CIL and incremental revenue will be only about 3.37 per cent.

In FY 2022-23, CIL’s Average Fuel Supply Agreement price was around Rs.1450/- per ton, a 3.37 per cent increase in the overall FSA Pricing translates to an increase in average FSA rates by only around Rs.48/- per tonne. Rs.100/- increase in coal prices translates to an increase in power tariff by about six paise per unit, with the above marginal increase in coal prices the possible increase in tariff will be less than three paise per unit.

Further, the Royalty rates on coal produced in all States have remained unchanged since 2012 thereby maintaining a stable price notified price of coal and at the same time the State Finances improved with royalty collection commensurate with the enhanced coal production.

With the growth in coal production in the country the coal availability has increased for the consumers, which is evident from the reducing trend of premium in the coal auctions.