At a time when the government is bringing in reforms to end Coal India’s (CIL) monopoly while also allotting funds to enhance evacuation following the setting of a target of producing 1 billion tonne by 2024, power sector dues have put the mining monolith under financial stress. Some of the subsidiaries are forced to withdraw its fixed deposits before maturity, while also looking for credit lines to meet their working capital needs.
Receivables from power utilities have risen to an all-time high of Rs 17,000 crores as in April this year. This has set alarm bells ringing in the mining PSU, with rising concern of financial unviability. While costs are likely to go up with increased production target and need to purchase more equipment, realisation needs to be at par with production.
