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Coal shortage to continue

NEW DELHI: Even as India has huge reserves of coal and is the world’s third largest producer, the country is still grappling with shortages of the fuel in the domestic market and will continue to do so in the future.

To tide over the shortage situation, a report on the coal industry prepared by Ernst & Young (E&Y) has called for a boost to domestic coal production and contract mining, a more favourable regulatory environment and greater private sector participation along with foreign direct investment.

According to E&Y’s report titled ‘Coal — Unearthing its potential in India,’ which was released by Power Minister Sushilkumar Shinde at the India Coal Summit 2008 here on Friday, the demand-supply mismatch in coal is expected to continue unless these key areas receive focussed attention.

For, while domestic coal production is estimated to increase by nine per cent touch 680 million tonnes by 2012, the demand for the fuel by that year is expected to grow by 10 per cent over the next four years to 731.1 million tonnes, leaving a gap of 51million tonnes.

While the 51 million tonne deficit in 2012 will have to be met through imports, the E&Y report has pointed out that the key issues that plague the production growth in the coal industry include low productivity, poor infrastructure and an absence of clear relief and rehabilitation policies. Improvement in domestic production, the report said, can be brought about through deregulation of the industry, private participation, better governance and state-of-the-art production technologies.

According to E&Y Partner Kuljit Singh, in an environment of increasing energy problems, the coal Industry is finally getting its due importance.

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