Economic significance of the coal sector
Coal is vital to India’s energy needs, supplying over half of the country’s power. Despite renewable energy growth, coal-based thermal power will remain essential, with its share projected at 55% by 2030 and 27% by 2047.
Key contributions:
- Railways & revenue: Coal stands as the single largest contributor to railway freight, with an average share of nearly 49% of total freight income amounting to Rs. 82,275 Crore in the fiscal year 2022-23 alone. This revenue contribution has surpassed 33% of total railway earnings, showcasing the sector’s substantial influence on India’s transportation network.
- Government earnings: The coal sector contributes over Rs. 70,000 Crore annually to the central and state governments through royalties, GST, and other levies. These funds play a crucial role in fostering socio-economic development and infrastructure enhancement in coal-producing regions. Coal production generates substantial revenue for both Central and State Governments, with royalty collections reaching Rs. 23,184.86 Crore in the fiscal year 2022-23.
- Employment: The sector provides jobs to over 239,000 workers in Coal India Ltd and thousands more in contractual and transport roles.
- Economic growth Substantial investments in capital expenditure, averaging Rs. 18,255 Crore annually over the past five years, have facilitated infrastructure development and resource optimization within coal sector PSUs.
