Centre Allocates ₹5,925 Crore for Coal & Lignite Exploration from FY27

The Union government has approved a major expansion of India’s coal and lignite exploration programme with an allocation of ₹5,925 crore beginning FY27.  

The funding is aimed at increasing geological coverage, strengthening long-term fuel security and supporting rising power and industrial demand. 

Exploration Push Under Central Scheme 

The investment will be deployed through the Central Sector Scheme for coal and lignite exploration and is expected to enable detailed surveys over an additional 1,845 sq km of prospective terrain.  

This expansion is designed to improve reserve visibility, accelerate mine planning and enhance the pipeline of blocks available for future commercial and captive mining. 

The move builds on reforms introduced to simplify approvals for geological reports and exploration programmes, making it easier for agencies to carry out surveys and bring new blocks into the development pipeline. 

Coal Supply Strength and Import Reduction 

India produced 1,042.9 mt of coal in 2025, marginally higher than the 1,039.6 mt recorded a year earlier, reflecting stable output despite rising demand.  

Domestic coal-based power plants held 50.31 mt of stock at the end of December, around 17.4% higher than the same period last year, with the stockpile crossing the 50 mt mark 80 days earlier than in the previous financial year. 

Abundant domestic supply has also sharply reduced dependence on imported coal for blending. Blending coal imports fell 54.17% in 2025, with volumes dropping to just 5.5 mt up to December compared with 12 mt a year ago. Total coal imports from April to October stood at 149.8 mt, broadly flat compared with last year. 

Strategic Significance of Resource Expansion 

India currently holds about 401 billion tonnes of coal resources, making it one of the largest holders globally. The new funding cycle signals a clear focus on converting this geological potential into usable reserves that can support thermal power, steel, cement and other energy-intensive sectors over the next decade. 

By expanding exploration coverage and improving reserve mapping, the government aims to ensure smoother mine development, reduce import vulnerability and provide long-term visibility to investors and power producers. 

Read More: Coal India Production Falls 3.7% in Apr–Nov FY26, First Decline in 6 Years! 

Conclusion 

The ₹5,925 crore allocation from FY27 marks a decisive step to deepen India’s coal and lignite resource base, reinforcing domestic energy security while aligning production growth with the country’s rising power and industrial needs. 

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