India, being among the largest coal producers in the world, has abundant stocks and reserves of the black mineral. Power and cement plants along the coast prefer to import their fuel, though, now that domestic prices are no longer competitive.

The closing stocks of coal companies have been getting bigger over the years. Last year CIL and SCCL's closing stocks jumped 14 per cent to 31.89 million tonne from 28.06 million tonne the year before. Between April and December 1999 coal companies in the country produced 185.77 million tonne of coal, sold 193.32 million tonne of it and still had a stockpile of 20.87 million tonne.

Coal imports are on OGL (open general licence) and freeing of coal prices at home have rendered imports cheaper at many locations. Non-coking coal imports jumped 45 per cent in 1997-98 to 6.56 million tonne from 4.53 million tonne the year before.

Even though imports have not grown at that pace, the level of imports have remained in the region of six million tonne since. The fact that imports took a leap in 1997 is significant, because the partial decontrol of coal prices began then.

The Union government allowed coal companies to fix prices of the ``E,'' ``F'' and ``G'' grades of coal (commonly used to fuel power plants) in March 1997. The phased price reforms in the coal industry continued right uptill January this year, when coal prices became entirely market-driven. Apart from the basic import duty, which has now gone up to 25 per cent from 15 per cent, non-coking coal imports attract a 10 per cent surcharge on the basic duty and a special additional duty of four per cent.

The price of coal produced by Coal India Limited (CIL), a company with a grip over 86 per cent of the Indian coal market and the Singareni Collieries Company Limited (SCCL) entails royalty, stowing excise duty (SED), a four per cent Central Sales Tax (CST) and cess in West Bengal.At a basic customs duty of 15 per cent, the scales were loaded in favour of imports, especially near the ports. The increased import duty of 25 per cent should now put coal companies here more on an even keel with overseas producers.