New Delhi: The government is working "very hard" to improve domestic supplies for reducing coal imports, that accounts for a substantial amount of the current account deficit, a senior official said.
With the government approving many thermal power projects, the requirement for imported coal is expected to rise further since domestic production is yet to match the pace of demand.
"We are working very hard to see domestic coal supply increases to reduce the import requirement... It is quite a substantial amount that goes into coal import," said economic affairs secretary Arvind Mayaram in an interview.
His comments came in response to a query on whether coal import is also a factor in high Current Account Deficit (CAD).
CAD, the difference between inflow and outflow of foreign exchange, touched a record high of $88.2 billion or 4.8 percent of GDP in 2012-13 on account of higher gold and oil import.
According to Mayaram, the economy cannot be disrupted by saying "no more power because we don't want to import coal".
"So we have to live with it for a while," he added.
Without giving specific numbers, Mayaram said government believes that coal imports should actually decrease even as he admitted overseas dry fuel is required to generate electricity.
During April-September of current fiscal, CAD came down to $26.9 billion (3.1 percent of GDP) from $37.9 billion (4.5 percent of GDP) in the first half of 2012-13.
As per data from the Reserve Bank of India (RBI), the import of coal, coke and briquette, among others touched $7.8 billion in the first six months of the current financial year ended September.
"We have large reserve of coal in India. Several decisions have been taken by the Cabinet Committee on Investment (CCI) to unclog the coal sector so that we can have more coal available, coal linkages are now being created, environmental clearances are now being rationalised, that work is on," he said.
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Updated Date: Dec 21, 2014 02:54:22 IST