The government on Thursday said the current domestic production is unable to meet the country's demand, even though the country is the world's second-largest producer of fossil fuel and the fifth-largest nation in terms of coal deposits. Currently, India is producing about 729 million tonnes of dry fuel, the coal ministry said in a statement.
"However, it is a fact that the domestic production is not able to meet the demand of coal in the country," the statement said. Last year, India imported 247 million tonnes (MT) of coal and spent Rs 1.58 lakh crore worth of foreign exchange.
Commercial auction of coal mines along with transparent measures taken by the Centre has come at an opportune time to bridge the mismatch between demand and supply of coal in the country. "This will not only provide a huge opportunity for employment in the backward regions but will also save foreign exchange to the extent of almost Rs 20,000 crore to Rs 30,000 crore per year," it said.
These reforms will also have an effect on other sectors dependent on coal. With an increase in coal production, the positive impact will also be felt on production and processing in steel, aluminum, fertilisers and cement sectors.
The auction of coal blocks for commercial mining was launched in June with 38 blocks in the first tranche. Out of the said blocks, the auction process was successfully completed for 19 blocks in November.
Total annual revenue generation from the auction is estimated at Rs 6,656 crore, considering production at aggregated peak rate capacity level of 51 million tonnes per annum. The total upfront amount of Rs 262 crore will be received by the states during the financial year 2020-21, and the remaining amount of Rs 786 crore will be received subsequently based on the milestones mentioned in the bid documents.
Import substitution is one of the topmost priorities of the government. An inter-ministerial committee has been constituted for the purpose.
Towards the goal of Aatmanirbhar Bharat, the ministry along with all stakeholders is actively pursuing to achieve the mission of import substitution.