Govt hopes to slash coal import bill by `40,000 crore in FY17
May 04 2016
It would be the second straight year when the coal import bill would see a decline. In FY16, the country saved over Rs 28,000 crore on coal imports, helping the exchequer maintain the fiscal deficit target without any curb in expenditure.
“While last year we saved Rs 28,000 crore in foreign exchange, this year we are hoping it save around Rs 40,000 crore,” coal and power minister Piyush Goyal said at the ‘contract labour payment management system’ portal launch event here on Wednesday.
“We would endeavour to lower import of thermal coal and increase production of domestic coal,” he said.
Goyal’s confidence on reducing coal import bill stems from the fact that coal prices in the international market continue to remain low and the sluggish global economic conditions would prevent any early spurt in rates.
Moreover, world’s largest miner Coal India (CIL) is expanding its capacity that grew to 536 million tonnes (mt) in FY16, an increase of 8.5 per cent over the previous year. For current year, CIL is targeting 598 mt production. It should reduce industry’s dependence on imported coal.
Coal imports declined in FY16 to 181.91 mt worth Rs 79,378 crore from 216.17 mt worth Rs 1,07,448 crore in FY15. Coal imports is expected to fall below 150 mt in FY17.
Along with lower imports, a 30 per cent fall in prices during FY16 also helped in cutting the coal import bill. Against a price of $85 a tonne in the early part of 2014 (Indonesian coal of over 5,000 Kcal), landed price has gone below $50 a tonne.