Coal India Ltd (CIL), the state-owned coal giant, reported a slight decrease of 0.6% in its contributions to the government exchequer for the first half of the current fiscal year. According to provisional data from the coal ministry, CIL paid Rs 289.3 bn in levies during the April-September period of FY25, down from Rs 291.22 bn during the same period last year.

CIL, which produces over 80% of India’s domestic coal, saw its total payments to the exchequer for September drop significantly by 11.1%, from Rs 48.79 bn in FY24 to Rs 43.35 bn in FY25. These payments are derived from various levies, including royalties, District Mineral Foundation (DMF) contributions, and payments to the National Mineral Exploration Trust (NMET).

Major Beneficiaries: Coal-Producing States Among the coal-producing states, Jharkhand emerged as the largest beneficiary of CIL’s contributions, receiving Rs 64.52 billion in the first half of FY25. Odisha followed closely with Rs 63.83 billion, while Chhattisgarh, Madhya Pradesh, and Maharashtra received Rs 54.32 billion, Rs 51.77 billion, and Rs 27.82 billion, respectively.

Over the past nine years, coal-producing states have earned a total of Rs 1.52 lakh crore in revenues from levies such as royalties, DMF, and NMET contributions, emphasizing the sector’s vital role in boosting state-level economic growth.

Coal Production on the Rise Despite the drop in contributions, Coal India recorded a 2.5% increase in coal production during the first half of FY25, producing 341.5 million tonnes (MT) compared to 332.9 MT in the same period of the previous fiscal year. CIL’s total coal production for FY24 reached 773.6 MT, a 10% year-on-year increase, though it fell slightly short of the target of 780 MT.

For the ongoing fiscal year (FY25), Coal India has set an ambitious production target of 838 MT, continuing its focus on meeting India's rising energy demands.

Economic Impact of the Coal Sector The coal mining sector remains a critical driver of economic growth in coal-producing states, contributing significantly to their financial stability. With levies such as royalties, DMF, and NMET in place, these states are better positioned to fund development projects and infrastructure improvements.

While Coal India's contribution to the exchequer has seen a slight dip, its consistent production growth signals the continued importance of coal in India's energy landscape. The company’s efforts to meet its production targets, coupled with its role in state-level economic development, highlight its influence on both the national and state economies.