New Delhi: Coal India Ltd's (CIL) overall expenditure has reduced by Rs 1,838 crore or 3.3 percent during the first nine months of the ongoing fiscal ending December 2020 as a major reduction was visible in employee benefit expenses which stepped down by Rs 735 crore. The reduction in expenditure comes even as the company's composite opencast (OC) production increased by 16.1 percent during the period. This is the sum of the over burden (OB) excavated and coal produced through opencast mines. CIL's overall expenditure dropped to Rs 54,241 crore, during the referred period, from Rs 56,079 crore for the same period year ago, the decrease being 3 percent.
CIL's expenditure climbed down while the company clocked 6.3 percent output growth, 9.1 percent surge in coal off-take and 17.3 percent increase in over burden removal (OBR) during the third quarter ended December 2020. Increased OBR was a significant factor.
The major reduction was visible in employee benefit expenses which stepped down by Rs 735 crore. These include salaries of the employees, performance related pay of executives, performance linked reward of non-executives, coal mines provident fund contributions etc. Other miscellaneous expenses accounted for Rs 126 crore.
Also, there was less provisioning of stripping activity by Rs 2,894 crore during the referred period. Stripping activity is the quantity of OB removed for the required coal produced. OBR is one of the significant components of the expenditure.
In the recent years CIL has become leaner shedding its flab through superannuation of around 13,000 employees per year. Its manpower stood at 2.72 lakh at the beginning of the current fiscal compared to 3.22 lakh employees four years ago. During the nine-month period of the current fiscal, the manpower reduced by 13,800. This reduction is expected to continue for few more years which would further shrink the employee benefit expenditure which currently stands close to 50 percent of CIL's overall revenue expenditure.
During the COVID-led slowdown, CIL benefited consumers of the power sector to the tune of about Rs 703 crore as it waived off the performance incentive for increased supplies made above the committed contracted quantity of coal. As most of the customers were cash strapped, impacted by Covid-fuelled fall in the industrial activity, CIL also did not press for the penalty for lifting lower quantities of coal than the contracted quantity.
CIL's OBR has been consistently on an upward trend during the current fiscal despite the COVID-induced slowdown. OBR growth was 20.3 percent ending December 2020 at 967.26 Million Cubic Metres. OB growth peaked to a record high of 70.5 percent during the month of September 2020.
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