The push by the Government of India (GoI) to increase coal production to 1 billion tonne by 2020 has now become questionable as there have been no enough takers even at the current level of production.
Experts opine that the economy of the country is not yet prepared to consume the entire coal production, even at the current levels, thus necessitating Coal India Limited (CIL) to produce in synchronization with demand. At the current levels of production, huge volumes of coal are lying unsold, as growth in coal production has surpassed growth in power generation in the country. Available data shows that demand for power has grown at 4-5% in place of the expected growth of 7-8%.
Constrained by lower off-take, CIL lowered its production in Aug’16 to 32.43 MnT, which is lower by 10.4% in the same month of the previous year. The production in Aug’16 also has fallen behind that in July’16 by 11.7%.
In the meantime, coal imports also have taken come down, indicating the need for CIL to adopt demand driven production.
In Aug’16, 11.55 MnT of Non Coking coal was imported into the country, according to SteelMint Research. During the corresponding month of the last fiscal, a higher volume of 12.32 MnT was imported, SteelMint Research shows.
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