Coal India's Contribution To Government Exchequer Declines By 2.2% In April-May

State-owned Coal India Ltd's contribution to the government's exchequer dropped 2.2% to Rs 9,560.28 crore in the April-May period of the ongoing fiscal. Coal India Ltd, which accounts for over 80% of domestic coal output, paid Rs 9,777.64 crore to the government exchequer in the year-ago period, according to provisional figures of the coal ministry.

Total levies paid to the government in May went up to Rs 4,763.20 crore from Rs 4,716.5 crore paid in the corresponding month of FY23.

The amount paid to the Centre and state governments include royalties, GST, cess on coal, and other levies. Coal production generates substantial revenue for both central and state governments.

Of the total amount paid to the government exchequer in the first two months of FY24, maximum amount of Rs 2,122.39 crore was made to the state government of Jharkhand, followed by Rs 2,116.15 crore to the Odisha government, Rs 1,933.59 crore to Chhattisgarh, Rs 1,496.80 crore to Madhya Pradesh, and Rs 1,048.44 crore to Maharashtra among others.

State governments are entitled to receiving 14% of royalty on the sale price of coal and 30% of the royalty as contribution towards the proposed district mineral foundations -- which are meant to support people affected by various projects -- and 2% of NMET from dry-fuel produced by the coal companies and also the private sector.

In case of captive, commercial mines, states are also entitled to receiving the revenue share offered by the auction holder in a transparent bidding process.

Apart from this, state governments also benefit from increased employment, land compensation, increased investment in allied infrastructure like railways, road and several other economic benefits.

Coal India's production and off-take are pegged at 838 MT for FY25.