Explained: What does India’s coal shortage mean for MSMEs recovering from Covid impact
Ease of Doing Business for MSMEs: The shortage of India’s largest source of power – Coal at the country’s thermal power plants may thwart micro, small and medium enterprises’ (MSMEs) post-pandemic recovery. Accounting for around 70 per cent of India’s source of energy, as per government estimates, the depletion of coal stocks has been due to multiple reasons, risking huge losses for small businesses particularly in power guzzling sectors such as steel, aluminium, cement, fertilizers, chemicals, and more.
Unprecedented power demand because of the economic recovery after Covid along and heavy rains in coal mine areas during September this year 2021 significantly impacted the coal production and despatch of coal from mines. The government had also cited other reasons such as an increase in prices of imported coal to significantly high levels. This led to a substantial reduction in power generation from imported coal-based power plants that consequently triggered more dependence on domestic coal. Non-building of adequate coal stocks before Monsoon and legacy issues of heavy dues of coal companies from certain states including Maharashtra, Rajasthan, Tamil Nadu, Uttar Pradesh, Rajasthan, and Madhya Pradesh also contributed to the coal crisis.
