Rangarajan stresses need to improve coal availability

Prime Minister's Economic Advisory Council Chairman C Rangarajan said on Friday that India's growth trajectory would be disturbed if availability of coal, a critical input in power generation, was not increased.

"Availability of coal is important and there is a need to increase its production. What India adds to its generation capacity in five years, China adds...in one year," he said at the 39th Foundation Day of Coal India Limited (CIL).

He said the state-owned coal major should improve coal availability and consider the participation of the private sector.

"CIL should explore the possibility of involving the private sector. It should enter into management agreements with private parties for exploration of mines. These private parties will act as CIL's agent," he said.

Coal is used to fire almost 60 per cent of India's installed power generation capacity. Mining has been hampered by issues such as delays in land acquisition and environmental approvals.

Coal India had 21,754 million tonnes of extractable coal reserves as of April, 2010, according to information available on its website.

Stating that a good amount of coal reserves are in dense forests, Mr Rangarajan said a compromise would have to be reached keeping in mind environmental issues.

He said there is a need for the involvement of state governments for a meaningful rehabilitation and resettlement policy for people displaced from mining areas.

Mr Rangarajan also said state-owned coal companies should increase their operational efficiencies and added that simultaneously, the railway infrastructure must be improved to facilitate transportation of coal.

Coal India officials said the company will be able to meet its coal production target if all approvals are obtained on time.

Cal output target for the current financial year has been set at 482 million tonnes, of which 235 million tonnes of the fuel has been produced. The production was at 452 million tonnes in the previous year..

India's economic growth fell to a decade low of 5 per cent in fiscal year 2012-13 (FY13).