Scribd
Upload
63 views2 pages

Coal

The document discusses the impact of the Union Budget 2010-11 on the coal sector in India. It notes that the budget proposes introducing competitive bidding for coal block allocation, establishing a Coal Regulatory Authority, and imposing a Clean Energy Cess of Rs. 50 per tonne on domestic and imported coal production. These measures may increase coal prices for consumers, reduce Coal India Limited's monopolistic pricing power, and help decrease dependency on domestic and imported coal supplies. The overall budget impact on the coal sector and major companies like CIL is assessed to be neutral.

Uploaded by

vishwanath180689
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
63 views2 pages

Coal

The document discusses the impact of the Union Budget 2010-11 on the coal sector in India. It notes that the budget proposes introducing competitive bidding for coal block allocation, establishing a Coal Regulatory Authority, and imposing a Clean Energy Cess of Rs. 50 per tonne on domestic and imported coal production. These measures may increase coal prices for consumers, reduce Coal India Limited's monopolistic pricing power, and help decrease dependency on domestic and imported coal supplies. The overall budget impact on the coal sector and major companies like CIL is assessed to be neutral.

Uploaded by

vishwanath180689
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

IMPACT OF UNION BUDGET 2010-11

COAL

Sector Impact – Neutral

Background

• Coal production in the country has grown by about 8% to 493 mn tonnes in FY09. Out of total
coal produced in FY09, Power, Steel & Cement sectors together accounted for about 85% of
total coal offtake.
• Power sector in the country mainly consumes domestically produced non-coking coal but the
steel sector has to rely on import of coking coal. In FY09, total coal imports were about 59 mn
tonnes comprising of 24 mn tonnes of coking coal and 35 mn tonnes of non-coking coal.
• In the period of April-November of this fiscal, total coal production in the country has reached
to a level of 365 mn tonnes including 29.5 mn tonnes of coking coal.
• Coal production in the country is mainly dominated by the two players Coal India Ltd. (CIL)
and Singareni Collieries Ltd. which together account for almost 90% of the total coal
production. Among these two, CIL alone accounts for about 83% of the total coal production.
• In the month of October 2009, CIL has revised the prices of different grades of coals by an
average 11%. This price revision is after a gap of almost two years which previously had taken
place in the month of December 2007.

Budget Proposals

1. Proposal to introduce a competitive bidding process for allocation of coal blocks for captive
mining to ensure greater transparency and increase participation in production from these
blocks.
2. Proposal to set up a “Coal Regulatory Authority” to create a level playing field in the coal
sector.
3. Imposition of Clean Energy Cess of Rs.50 per tonne on production of domestic coal and also
on imported coal.

Professional Risk Opinion


IMPACT OF UNION BUDGET 2010-11

Duty Structure
(%) Existing Proposed
CUSTOMS DUTY
• Non Coking coal 5 5
• Coking coal 0 0
• Metallurgical coke 0 0
Excluding 2% Education cess and 1% secondary & higher education cess

Budget Impact: Industry

1. The levy of Clean Energy Cess will increase prices of coal which will ultimately be passed on
to the consumers by the coal mining companies.
2. The proposal of competitive bidding process for allocation of captive coal mines and to set up
a Coal Regulatory Authority will take away the monopolistic status and pricing power from the
CIL.
3. Focus on easing the process of allocation of captive mines will reduce the dependency of
domestic coal consuming sectors on CIL and also on imports.

Budget Impact: Companies

Company Products % of Sales Applicable Proposals Overall Impact

CIL. Coal 100 1 to 3


Singareni
Coal 100 1 to 3
Collieies Ltd.

Legends:
Highly Positive Negative Neutral
Positive Highly Negative Ø No Proposals

You might also like