Power minister on Saturday asked officials to consider diverting coal to power plants with extremely depleted stocks as shortages at some plants push several utilities to the verge of running out of fuel.
Power minister R.K. Singh asked officials to "streamline the stock and supply of coal", including a reduction in inventory targets to 10 days from 14 days, to allow coal to be moved to areas of greatest shortage as energy demand rises.
Singh said the country's electricity demand is likely to continue increasing and also asked utilities to consider blending imported coal with local fuel to address shortages.
India's electricity generation rose by 16.1 per cent in August compared with a year earlier, a Reuters analysis of government data showed, lifted by a 23.7 per cent jump in coal-fired power generation that has led to shortages at utilities.
Data from the Central Electricity Authority showed more than a half of India's 135 coal-fired power plants had less than a week's supply of coal left, of which 50 had fewer than three days left. Six plants had run out of coal.
India is the world's second-largest importer of coal despite having the fourth-largest reserves, and coal burning generates nearly three-quarters of the country's electricity demand.
Coal shortages occur periodically in India, with the last such shortage occurring in 2017. Production of coal typically slows during India's annual monsoon in June through September.
India has also urged utilities to import coal to meet the shortage. The country mainly imports coal from Indonesia, Australia, and South Africa.