“Ministry of Coal Unveils New Incentives to Propel India’s Underground Coal Mining Sector”
In a significant step aimed at revitalizing India’s coal sector, the Ministry of Coal has unveiled a set of transformative policy reforms designed to accelerate the growth of underground coal mining. These far-reaching measures are specifically crafted to address long-standing challenges such as high capital investment and prolonged project timelines, marking a critical turning point in the Government’s effort to modernize the coal ecosystem while simultaneously pursuing the goal of sustainable development.
To expedite the operationalization of underground coal mining, the Ministry of Coal has introduced an attractive package of incentives. First, the floor revenue share for underground coal mines has been reduced from 4% to 2%, offering substantial fiscal relief and making underground projects more financially viable. Additionally, the mandatory upfront payment requirement for underground mining ventures has been completely waived, effectively removing a major financial hurdle and encouraging greater private sector participation. This is complemented by a 50% rebate on performance security for underground coal blocks, further lowering entry barriers and facilitating the swift implementation of projects.
These policy reforms reflect the Government’s unwavering commitment to developing a future-ready, investment-friendly, and technology-driven coal sector. By incentivizing underground mining, the Ministry is not only spurring economic growth but also fostering greater operational efficiency, enhancing worker safety, and generating employment opportunities across mining regions.
One of the key advantages of underground coal mining is its lower environmental impact compared to opencast mining. With significantly less surface disruption, underground mining minimizes land degradation, deforestation, and displacement. The reforms are expected to drive the adoption of cutting-edge technologies, such as continuous miners, longwall systems, AI-based safety solutions, and remote sensing tools, all of which will improve productivity while maintaining ecological balance.
These forward-thinking measures represent a strategic shift towards cleaner, more sustainable coal extraction practices. They are designed to unlock the vast, untapped potential of underground coal mining in India, boosting innovation, reducing carbon emissions, and contributing to the nation’s energy security and the broader vision of Atmanirbhar Bharat. By reshaping the future of coal mining in India, the Ministry of Coal is reaffirming its role as a catalyst for industrial growth that is both self-reliant and environmentally responsible.