Centre’s paradoxical approach to coal imports

Hyderabad: The BJP government at the Centre on Tuesday exposed its paradoxical approach towards coal imports by stating that the gap between demand and supply of domestic coal was reduced to a mere 3.66 per cent in the power sector in 2021-22. Ironically, it has been pressurising the States as well as power generation companies […]

Hyderabad: The BJP government at the Centre on Tuesday exposed its paradoxical approach towards coal imports by stating that the gap between demand and supply of domestic coal was reduced to a mere 3.66 per cent in the power sector in 2021-22. Ironically, it has been pressurising the States as well as power generation companies to import coal to meet 10 per cent of their demand!

As per the statistics placed in the Rajya Sabha, the demand-supply gap of coal was about 20.45 per cent in 2012-13 which went upto 26 per cent in 2014-15 and again in 2019-20 has come down to 20.33 per cent in 2021-22. In the power sector, the demand-supply gap was 12.31 per cent which went upto 15.5 per cent in 2014-15 and is now 7.26 per cent in 2020-21 which came down to 3.66 per cent in 2021-22.

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In a reply, union Coal Minister Pralhad Joshi said domestic production and supply of coal met about 75-80 per cent of the coal demand in the country in the last 10 years. During the same period, the domestic supply of coal for power sector requirement has been in the range of 80-90%, meeting even 96% of coal requirements in power sector in 2021-22. This gap was met through import of coal from foreign countries.

To reduce coal imports further and also increase domestic production, the Centre initiated other measures including commercial auction of coal blocks, allowed 100 per cent Foreign Direct Investment (FDI) for commercial mining, and launch of Single Window Clearance portal for coal sector to expedite operationalisation of coal mines, among others.

It may be noted that despite the increased domestic production of coal, the union Power Ministry had asked the States especially the power generation companies to import coal for blending 10 per cent of their requirement. On Monday, union Minister of Power RK Singh who replied to a question on the issue in the Rajya Sabha, claimed that the companies were advised to import coal to ensure availability of adequate coal stock before the onset of monsoon and cater to their demand during monsoon period when the domestic supply of coal reduces.

However, the Centre failed to explain why the government was insisting on coal imports of nearly 10 per cent despite the demand-supply gap never crossing 10 per cent since 2017-18. As per the Coal Ministry, the demand-supply gap in power sector was 8.79 per cent in in 2017-18, 8.73 in 2018-19, 9.95 in 2019-20, 7.26 in 2020-21 and 3.66 per cent in 2021-22.