Coal India board approves proposal to fatten pension corpus as number of retirees increase

• The decision to fatten the pension corpus has been taken in order to meet the growing pension expenditure of the company

• Coal India's employee strength has fallen by 57,000 since 2015 to 276,000 as of January 1, 2020

New Delhi: The Board of Directors of state-run Coal India Ltd (CIL) has approved a proposal to increase contribution towards the pension corpus. In a regulatory filing to the stock exchanges on Monday, CIL said, "CIL Board approved to enhance the non-coking coal price by Rs.10/- per tonne for Regulated and non-Regulated sectors across CIL towards contribution to the corpus of CMPS 1998 (Coal Mines Pension Scheme)." The decision will come into effect starting December 1 this year.

More Coal India employees have retired in past few years

The decision to fatten the pension corpus has been taken in order to meet the growing pension expenditure of the company. Coal India's employee strength has fallen by 57,000 since 2015 to 276,000 as of January 1, 2020. It expects manpower to contract by 97,000 from 2015 to 2024, when it is expected to produce 1 billion tonnes. And in order to meet the pension liabilities, Coal India needs to bulk up its pension corpus.

Targeting 1 BT coal production by FY24

In 2017-18, wages constituted 55 percent of the production cost. This has fallen to 49.5 percent, with 23,000 fewer employees and higher capacity equipment at some mines. In contrast, salaries account for about 22 percent of a mine contractor's cost. While a private mine contractor pays workmen Rs 15,000-25,000 a month, Coal India pays at least Rs 80,000, along with family health expenses, education, housing and other benefits.

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This year, Coal India has ordered higher capacity equipment worth Rs 6,000 crore and plans to order another Rs 5,000 crore. It is acquiring higher capacity dumpers, shovels, dozers and draglines along with spares for the next 10 years.

It aims to produce 750 million tonnes in 2020-21, and 1 billion tonnes by 2023-24, two years earlier than the revised target. In 2015, an employee produced 6.2 tonnes of coal in one shift of eight hours. It has increased to 8.51 tonnes in 2019 and is expected to rise further.

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