The coal mine allocation is expected to bridge the demand-supply gap in the country.
New Delhi:
Hoping to improve availability of coal to small, medium and cottage industries in the country, the Cabinet Committee on Economic Affairs today approved allotment of coal mines to state run companies or PSUs.
Sources in the coal ministry said that the move, once implemented, will enhance domestic production of coal to meet rising demand and reduce dependence on expensive imports.
The measure will also bring dividends to coal bearing states. States like Jharkhand, Chhattisgarh and Maharashtra will get additional revenue from coal mines allocated to the PSUs. The states will now be entitled equal royalty on the quantity of coal produced on a monthly basis during the lease period/life of the mine as well as 10 per cent of the intrinsic value of the coal in the mines as upfront payment.
The money will be received in three instalments in the first year of allotment. It is also expected that the incremental coal produced from such coal mines will bridge the gap between demand and supply considerably.
The demand for coal in the country is much higher than the current level of production. During the year 2014-15, domestic production of coal was less than 75 per cent of the total consumption of 825.6 million tonnes. The gap between consumption and domestic supply is met through imports.
Due to increase in domestic production, import of coal which had been increasing since 2011-12, registered a negative growth of 12.2 percent during the period April to November, 2015. However, the gap between the demand and supply remains wide.
Sources in the coal ministry said that the move, once implemented, will enhance domestic production of coal to meet rising demand and reduce dependence on expensive imports.
The measure will also bring dividends to coal bearing states. States like Jharkhand, Chhattisgarh and Maharashtra will get additional revenue from coal mines allocated to the PSUs. The states will now be entitled equal royalty on the quantity of coal produced on a monthly basis during the lease period/life of the mine as well as 10 per cent of the intrinsic value of the coal in the mines as upfront payment.
The money will be received in three instalments in the first year of allotment. It is also expected that the incremental coal produced from such coal mines will bridge the gap between demand and supply considerably.
The demand for coal in the country is much higher than the current level of production. During the year 2014-15, domestic production of coal was less than 75 per cent of the total consumption of 825.6 million tonnes. The gap between consumption and domestic supply is met through imports.
Due to increase in domestic production, import of coal which had been increasing since 2011-12, registered a negative growth of 12.2 percent during the period April to November, 2015. However, the gap between the demand and supply remains wide.
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