Summary: India has the world’s fourth-largest coal reserve. It is the second-biggest producer of fossil fuel behind China and is home to the world’s biggest coal miner, Coal India, which accounts for 80% of the country’s domestic output. The minable capacity of already allocated coal blocks is around 15% to 20% higher than the expected demand in 2030. So why, year after year, India’s power plants face coal shortages that lead to widespread power outages leaving parts of the country in the dark and industries in a limbo. There are several factors. India has had a long-standing policy to minimise imports of coal. In February 2020, Coal Minister Pralhad Joshi had said that the country would stop importing thermal coal from 2023-24. Joshi had said the Coal Ministry would coordinate with Railways and Shipping Ministry and enable Coal India, captive and commercial miners to evacuate more coal by 2030. But despite efforts to increase the supply of domestic coal, there was a gap between the demand of coal and its supply. And the coal stocks at the generating stations are depleting at a worrisome rate. Now, Power Ministry is blaming declining coal imports for the current crisis. In 2018-19, 21.4 million tonnes of coal was imported for blending, 23.8 million tonnes in 2019-20 and in 2021-22, it fell to 8.3 million tonnes. Coal inventories at power plants have declined by about 13% since April to the lowest pre-summer levels in years. And for the first time since 2015, Coal India will import the fuel for use by state and private power generating companies. The power ministry said the decision was taken after nearly all states suggested that multiple coal import tenders by states would lead to confusion and sought centralised procurement through Coal India. The Centre faced pushback from states as imported coal is five times costlier than the one mined domestically. Recently, the government also stepped up pressure on utilities to increase imports to blend with local coal. It has even warned of cuts to the supply of domestically mined coal if power plants did not build up coal inventories through imports. But the power ministry on Saturday asked states to suspend tenders that are "under process" Despite record production, Coal India’s supply has not been able to meet the demand. In April 2022, the company registered a growth of 27.64% by producing 53.47 million tonnes. Former coal secretary Anil Swarup told Washington Post that Coal India’s production stagnated in the last few years because of a failure by the government to appoint senior management and fund mining expansions. Shreya Jai of Business Standard points a mismatch between coal, power and railway ministries. ower units did not stock up when Coal India had surplus coal. Imported coal-based power units not functioning for s
