Coal to add Rs. 95,000 crore to government coffers by 2020

8 January 2018

Coal, considered a polluting fuel, is turning out to be a heavy contributor to the government coffers. It is likely to contribute around Rs. 95,000 crore to the government’s coffer in the form of clean energy cess between this financial and 2020.

Going by Coal India’s production targets and assuming they are achieved by the monopoly this year, the government is likely to collect around Rs. 26,400 crore in the form of cess on coal. It is expected to touch Rs. 30,920 crore next year and Rs. 40,000 crore in 2020.

According to data compiled by the Comptroller and Auditor General, the centre, has already collected Rs. 53,967 crore in the form of Clean Energy Cess between 2010-11 and 2016-17. In fact, total cess collected by the government since its inception in 2010-11 till 2020 is likely to touch Rs. 1.51lakh crore.

Clean energy cess collected from coal at the rate of Rs 400 per tonne of coal sold totalled Rs 26,117 crore during 2016-17 contributing a shade over 15% of the total cess collected by the government.

National Clean Energy Fund (NCEF) was established in 2010-11 for funding research and innovative projects in clean energy technology by levying a Clean Energy Cess on coal produced in India and imported coal.

According to data compiled by CAG cess collected by the government in 2012-13 amounted to Rs. 3053 crore which increased to Rs. 3082 crore in 2013-14 and Rs. 5393 crore in 2014-15. During these years the cess was Rs. 200 per tonne of coal sold. In 2015-16 it was increased to Rs. 400 per tonne which resulted in collected from cess increase to Rs. 12676 crore followed by Rs. 26117 crore in 2016-17.

In fact, cess and dividend collected by the government from coal companies were the second largest components in their respective heads in 2016-17.

The government collected a shade over Rs. 41,400 crore from coal during 2016-17 in the form of cess on coal, dividend from Coal India and income from divestment proceeds of coal companies.

Coal also contributed almost 12% of the total divestment proceeds into the government’s income stream. According to figures compiled by the Comptroller and Auditor General, Coal India contributed Rs. 4,289 crore from divestment proceeds.

The centre also earned Rs. 11,018 crore as dividend from three coal companies including Coal India and Neyveli Lignite. Dividend paid by coal companies to the centre was around 9% of the total dividend received by the government.

Source: THE ECONOMIC TIMES