Coal India Limited: The Last One Standing

Abstract

Two features have characterised the Indian coal industry: centralisation and state ownership. Both have their historical reasons. Centralisation originated in the late eighteenth century when the East India Company was granted a licence to start coal mining in the Raniganj Coalfield along the west bank of the river Damodar, about 120 miles west of Calcutta. Despite the laissez-faire policy of the British-Indian government, centralisation of the coal industry continued; upon independence, about 70% of the country’s coal production was in the hands of a few large producers, and 60% of the coal was consumed by three sectors: rail, steel and utility. Today, more than 80% of the coal production is from Coal India Limited (CIL). State ownership can be traced back to the World War II era when the British-Indian government temporarily took over the production and distribution of coal, imposed price controls and determined wages through government arbitration, in order to serve the war effort of the British troops.