The government lifting restrictions that, among other factors, were hobbling commercial coal mining in the country is a huge leap forward. The Mineral Laws (Amendment) Ordinance opens up coal mining to non-coal companies and removes the end-use restrictions that applied before. Given how this should facilitate the auction of coal blocks for sale of coal in the open market and boost domestic production, it is likely to bring down India’s import dependence for coal—in FY18, India imported 235 million tonnes of coal at a cost of Rs 1.71 lakh crore; for perspective, that constitutes nearly 5% of the entire imports that year. Nearly half of this coal was for power plants and other coal-using industries.
While the state-owned Coal India Limited (CIL) is tasked with producing 1 billion tonnes of coal by 2023-24—and this deadline was posted after it became clear that it would not be able to meet the earlier deadline—there is little to suggest that it will achieve the target.