Reforms in Coal Sector

The Ministry of Coal has implemented comprehensive structural and procedural reforms over the past five years to transform coal allocation and mining into a more transparent, efficient, and scientific process. The fundamental shift involved moving from allotment to allocation through open competitive auction, alongside the opening of commercial coal mining in 2020 with no restrictions on sale or end-use of coal.

Key Reforms for Transparency and Market-Based Allocation

Commercial Coal Mining was opened with no technical or financial eligibility conditions, allowing 100% Foreign Direct Investment under the automatic route. The auction mechanism migrated to a percentage revenue-share model supported by the National Coal Index for transparent, market-linked pricing. The Single Window Mode Agnostic (SWMA) Auction was introduced to sell all non-linkage coal of Coal India Limited through a single window, removing market distortions and enhancing fair competition among buyers.

The SHAKTI Policy was simplified into two windows: Window I at Notified Price and Window II at a Premium above Notified Price, enabling existing linkage consumers to procure up to 100% PLF requirement. The CoalSETU Window was introduced under the Non-Regulated Sector Linkage Auction Policy to provide auction-based linkages without end-use restrictions, allowing full flexibility for self-consumption, coal washing, or export.

Efficiency and Ease of Doing Business Reforms

A Single Window Clearance System was introduced through the PARIVESH 2.0 portal for faster mine operationalization. Forty-four private entities have been notified as Accredited Prospecting Agencies, removing the need for prospecting licenses. The Colliery Control Rules were amended to empower coal company boards to accord Mine Opening Permissions, and Coking Coal was notified as a Critical and Strategic Mineral under the MMDR Act, 1957, expediting Environment Clearance and Forest Clearance processes for Coking Coal Projects.

The Mine Developer and Operator mode was introduced for coal mining, and closed/abandoned mines were offered under a revenue-sharing model to maximize resource extraction. Insurance Surety Bond was included as an acceptable instrument for furnishing Performance Security in Coal Block Development and Production Agreements, reducing dependence on Bank Guarantees and releasing blocked working capital.

Technology Adoption and Clean Coal Initiatives

Under 'Mission Coking Coal', the government aims to enhance coal washery capacity to 58 MT by FY 2030. The Ministry launched the Koyla Shakti Dashboard for real-time monitoring of coal production, dispatch, stocks, and transportation, along with the Khanan Prahari mobile app and CMSMS web app for citizen-based reporting of unauthorized mining activities. CIL deployed Integrated Command and Control Centres with AI-based video analytics, RFID-enabled weighbridges, GPS-based vehicle tracking, and drone/satellite-based mapping.

For coal gasification, the government approved two major schemes with financial outlays of ₹8,500 crore (with 8 projects already approved) and ₹37,500 crore to meet the target of 100 MT gasification capacity by 2030. CIL adopted a renewable energy roadmap targeting 3 GW of net-zero renewable capacity by FY 2027-28 and 9.5 GW by FY 2029-30, with 558 MW already installed across utility and captive projects.

Production Growth and Logistics Development

India's domestic coal production increased significantly from 731 million tonnes in 2019-20 to cross 1 Billion Tonnes for two consecutive years, reaching 1047.52 MT in FY 2024-25 and 1039 MT in FY 2025-26. The government launched an Integrated Coal Logistics Plan to develop a technology-enabled, cost-effective multimodal logistics ecosystem through rail, road, coastal shipping, and inland waterways. A total of 139 First Mile Connectivity projects with aggregate capacity of 1,319 million tonnes have been taken up, with 72 projects (589 million tonnes capacity) already commissioned.

Regulatory Framework Update

The government notified the Coal Exchange Rules, 2026 to establish a regulated online platform for trading coal and its processed forms. The Coal Exchange will enable captive/commercial miners and consumers to enter into delivery-based contracts, further streamlining the sector.

Environmental sustainability initiatives include plantation/bio-reclamation, development of eco-parks, mine water utilization, and aggressive adoption of blast-free mining technologies like Surface Miners to replace conventional drilling.