The Cabinet Committee on Economic Affairs (CCEA) has approved the updated SHAKTI (Scheme for Harnessing and Allocating Koyala Transparently in India)

The SHAKTI Policy

When it was first implemented in 2017, the coal allocation mechanism underwent a paradigm change from a nomination-based system to a more open method of allocating coal links through tariff-based or auction-based bidding. The new features in the current revision will boost the electricity sector and expand the reach and impact of the SHAKTI policy by providing greater flexibility.

Greater eligibility and improved coal accessibility.

All power producers will be connected to coal, which will increase power generation, lower tariffs, and benefit the economy as a whole.

India's Coal Industry

Production: In FY 2024–2025, India produced more than one billion tons of coal, a 4.99% increase over the previous year. India is the world's second-largest producer of coal.

Import: An 8.4% drop in imports resulted in significant foreign exchange savings and a decrease in reliance on imports.

Coal continues to be essential, accounting for 55% of the country's energy mix and powering more than 74% of all power output, despite the fact that it has the fifth-largest coal reserves and is the second-largest consumer.

Coal Fields: Jharkhand, Odisha, and West Bengal in the east, as well as Chhattisgarh and Madhya Pradesh in the center, are home to India's principal coal fields.

Important contributions: Railways & revenue: With an average share of about 49% of total freight revenues, coal is the single largest contributor to railway freight.

Government revenue: Through royalties, GST, and other levies, the coal industry gives the federal and state governments more than Rs. 70,000 crore a year.

Employment: Over 239,000 people are employed by the industry at Coal India Ltd., and thousands more work in contract and transportation positions.

Problems India's Coal Industry Faces

Environmental Impact: The coal industry has a lot of problems with the environment, such as air pollution, greenhouse gas emissions, and how coal mining affects nearby ecosystems and communities.

Dependency on Coal Imports: India continues to import substantial amounts of coal, particularly high-GCV thermal coal and coking coal for steel, even though it has the fifth-largest coal reserves in the world.

Dependency on imports raises sensitivity to fluctuations in world prices and foreign exchange outflow.

Slow Environmental Clearances & Land Acquisition: Timely development of coal blocks is hampered by delays in environmental and forest clearances as well as land acquisition.

Underutilization of Mining Capacity: Because of uncertain demand, regulatory obstacles, and infrastructure delays, Coal India and other miners frequently operate below capacity.

India's Green Commitments: The fossil fuel with the highest carbon footprint is coal. India is under pressure to lessen its reliance on coal due to its commitment to global climate targets, such as the Paris Agreement and Net Zero by 2070.

Low Private Sector Participation: In spite of reforms, PSUs (Coal India Ltd. and SCCL) still control the majority of the coal mining industry, which restricts competition and creativity.

Government Actions for India's Coal Industry

Private enterprises are now permitted to mine coal for commercial sale without any end-use limitations thanks to the 2020 launch of commercial coal mining. Attempts to lessen reliance on imports, boost supply efficiency, and promote competition.

In order to give coal mining projects a single platform for acquiring all permissions and clearances (such as land, forest, and environmental), the Single Window Clearance Portal was introduced in 2021. Intends to minimize delays and expedite project implementation.

Auction of Coal Blocks for Non-Regulated Sectors: To encourage diversified use, coal blocks are frequently put up for auction for use in industries like steel, cement, and aluminum. Promoting Liquefaction and Gasification of Coal: By 2030, the government wants to gasify 100 million tons of coal.

Encourages the use of coal in a cleaner manner and supports India's energy transformation objectives. Drone monitoring, GPS tracking, online coal selling portals, and automated loading systems in mines are examples of technology and automation pushes.

Reforms in Coal Logistics: To enhance coal evacuation, coal corridors, specialized freight corridors, and first-mile connectivity projects are being developed.

Allocation of Coal to Small Consumers: Small and medium-sized businesses can now purchase coal at prices set by the market thanks to e-auctions.

In conclusion

In the short to medium future, coal will still be a significant part of India's energy mix, but a careful and well-planned shift to cleaner energy sources is necessary. In order to improve energy security and further Viksit Bharat, the Ministry of Coal is boosting domestic production, guaranteeing a self-sufficient, sustainable energy framework for long-term growth.