Public Sector Enterprises

Government ownership and control of business enterprises has

become a common feature in every country. In India public sector has
achieved commanding position in several industries. During the last
fifty years, public enterprises have laid down the base for heavy and
basic industries. These enterprises have created the infrastructure for
the rapid industrialisation of the country. Public sector is serving as an
instrument for attaining the economic and social objectives of the
state as laid down in the Constitution of India.
The business units owned, managed and controlled by the central,
state or local government are termed as public sector enterprises or
public enterprises. These are also known as public sector
undertakings. A pubic sector enterprise may be defined as any
commercial or industrial undertaking owned and managed by the
government with a view to maximise social welfare and uphold the
public interest.
Public enterprises consist of nationalised private sector enterprises,
such as, banks, Life Insurance Corporation of India and the new
enterprises set up by the government such as Hindustan Machine
Tools (HMT), Gas Authority of India (GAIL), State Trading
Corporation (STC) etc.
 CHARACTERISTICS OF PUBLIC
ENTERPRISES
Looking at the nature of the public enterprises, their basic
characteristics can be summarised as follows:
 Government Ownership and Management: The public enterprises
are owned and managed by the central or state government, or by
the local authority. The government may either wholly own the
public enterprises or the ownership may partly be with the
government and partly with the private industrialists and the
public. In any case the control, management and ownership remain
primarily with the government. For example, National Thermal
Power Corporation (NTPC) is an industrial organisation
established by the Central Government and part of its share capital
is provided by the public.
 Financed from Government Funds: The public enterprises get their
capital from Government Funds and the government has to make
provision for their capital in its budget.
 Public Welfare: Public enterprises are not guided by profit motive.
Their major focus is on providing the service or commodity at
reasonable prices. Take the case of Indian Oil Corporation or GAIL
India Limited. They provide petroleum and gas at subsidised prices
to the public.
 Public Utility Services: Public sector enterprises concentrate on
providing public utility services like transport, electricity,
telecommunication etc.
 Public Accountability: Public enterprises are governed by public
policies formulated by the government and are accountable to the
legislature.
 FORMS OF ORGANISATION OF PUBLIC
ENTERPRISES
There are three different forms of organisation used for the public
sector enterprises in India. These are Departmental Undertaking;
Statutory (or Public) Corporation and Government Company.
 Departmental Undertaking-this form of organisation is primarily
used for provision of essential services such as railways, postal
services, broadcasting etc. Such organisations function under the
overall control of a ministry of the Government and are financed
and controlled in the same way as any other government
department. This form is considered suitable for activities where
the government desires to have control over them in view
of the public interest.
 Statutory Corporation -it refers to a corporate body created by
the Parliament or State Legislature by a special Act which define
its powers, functions and pattern of management. Statutory
corporation is also known as public corporation. Its capital is
wholly provided by the government. Examples of such
organisations are Life Insurance Corporation of India, State
Trading Corporation etc.
 Government Company -it refers to the company in which 51
percent or more of the paid-up capital is held by the government. It
is registered under the Companies Act and is fully governed by the
provisions of the Act. Most business units owned and managed
by government fall in this category.
 Coal India Limited (CIL)
Coal India Limited (CIL) the state owned coal mining corporate came
into being in November 1975. With a modest production of 79
Million Tonnes (MTs) at the year of its inception CIL today is the
single largest coal producer in the world and one of the largest
corporate employer with manpower of 272445 (as on 1st April, 2020).
CIL functions through its subsidiaries in 84 mining areas spread over
eight states of India. Coal India Limited has 352 mines (as on 1st
April, 2020) of which 158 are underground, 174 opencast and 20
mixed mines. CIL further operates 12 coal washeries, (10 coking coal
and 2 non-coking coal) and also manages other establishments like
workshops, hospitals, and so on. CIL has 26 training Institutes and 84
Vocational Training Centres. Indian Institute of Coal Management
(IICM) as a state-of-the-art Management Training ‘Centre of
Excellence’ – the largest Corporate Training Institute in India -
operates under CIL and conducts multi -disciplinary programmes.
CIL is a Maharana company - a privileged status conferred by
Government of India to select state owned enterprises in order to
empower them to expand their operations and emerge as global
giants. The select club has only ten members out of more than three
hundred Central Public Sector Enterprises in the country.
CIL has seven producing subsidiaries namely Eastern Coalfields
Limited (ECL), Bharat Coking Coal Limited (BCCL), Central
Coalfields Limited (CCL), Western Coalfields Limited (WCL), South
Eastern Coalfields Limited (SECL), Northern Coalfields Limited
(NCL)and Mahanadi Coalfields Limited (MCL) and One mine
planning and consultancy company that is Central Mine Planning &
Design Institute(CMPDI). In addition, CIL has a foreign subsidiary in
Mozambique namely Coal India Africana Limitada (CIAL). The
mines in Assam i.e. North Eastern Coalfields is managed directly by
CIL.
 Production and Growth:
CIL ended the year with the best-ever production figure of 703.21 MT
registering a growth of 12.94 %, the highest ever offtake of 694.69
MT a massive 32.80 MT increase over 2021-22 recording a growth of
5% and the greatest overburden removal (OBR) at 1658.627 MCum
reporting a robust growth of 21.77%.MCL maintained its number one
position amongst the subsidiaries with highest coal production of
193.26 Million Te. Five of CIL’s coal producing subsidiaries BCCL
(113%), MCL (110%), NCL (108%), WCL (104%), and CCL (100%)
have raced ahead of their respective production targets of 2022-
23.The raw coal offtake during 2022-23 stood at its highest ever level
of 694.69 Million Tonnes (MT) in comparison to 661.89 MT during
2021-22. The offtake in 2022-23 recorded a growth of 5% over 2021-
22 breaking all previous records of offtake and wagon loading
performance.
 Consumer Satisfaction
Consumer satisfaction is a priority area for CIL and for enhanced
consumer satisfaction, special emphasis has been given to Quality
Management of Coal from mine to dispatch point. All consumers of
CIL have the option for quality assessment through independent third-
party sampling agencies. As a result of conscious and continuous
measures taken towards quality maintenance, the gap between the
weighted average of declared and analysed GCV of coal is well
within one GCV band.
 Coal beneficiation
CIL is presently operating 13 Coal Washeries with a total operable
washing capacity of 24.94 MTY. Out of these, 11 are coking coal
washeries and balance 2 are non-coking, with operable capacities of
13.94 MTY and 11 MTY respectively. The total washed coal
production from the existing coking coal washeries during 2022-23
was about 2.155 MT, a growth of more than 33.7% from 2021-22. To
enhance the beneficiation capacity of coking coal, CIL is further
setting up 3 new Washeries in BCCL having total throughput capacity
of 7 MTY. Out of these, 2 are under construction (4.5 MTY) and LoI
has been issued for one (2.50 MTY). Additionally, 5 coking coal
washeries are also being set up in CCL with a total capacity of 14.5
MTY. Out of these 5 washeries, LoI have been issued for two
numbers.
 Conservation of Energy
Conservation of Energy is a priority area for CIL and various
measures are taken towards reduction in specific energy consumption.
High wattage luminaries /conventional light fittings have been
replaced with low power consuming LEDs of appropriate wattage in
the majority of the places for quarry lighting, UG mine lighting, street
lighting, office and other workplaces, townships, etc., thereby
resulting in huge saving in electricity consumption. 18626 High
energy efficient super fans have been installed in different subsidiaries
of CIL. 625 Energy Efficient Water Heaters have been installed at
different places in CIL subsidiaries, and 1016 Auto Timers in Street
Lights have been installed at different places in CIL subsidiaries.
Almost all the areas of the subsidiary companies have maintained
Power Factors 0.90 to 0.99 during 2022-23 by installing capacitor
banks of appropriate KVAR rating.
Various steps have been taken for utilizing solar power as an
alternative source of energy such as in kilo-watt scale rooftop solar
plants are in successful operation. Additional rooftop solar capacity
added during 2022-23 was 3.393 MWp.
 Enterprise Resource Planning (ERP)
CIL has successfully implemented Enterprise Resource Planning
(ERP) to optimise resource utilisation and improve monitoring across
its operations. This implementation has facilitated real-time
information sharing with various stakeholders, including employees,
vendors, and customers. Through the ERP system, CIL has
established a robust monitoring system that provides timely updates
on key performance indicators related to environmental clearance,
forest clearance, land acquisition, and possession. This system is
crucial for mining projects, as it ensures compliance with regulatory
requirements. Additionally, contractor performance for major
infrastructure projects is regularly reviewed based on reports
generated through the ERP system.
To effectively track progress across all work streams, CIL has
leveraged the Project System (PS) module of ERP. This module
maintains and updates information related to statutory clearances,
land, rehabilitation and resettlement (R&R), infrastructure, and other
project related aspects on a periodic basis. This schedule monitoring
process helps identify bottlenecks, analyze interdependencies, and
determine critical actions required for expediting project
implementation. The ERP Dashboards within the system display
actionable insights derived from the project in real-time. These
dashboards enable senior management to make faster decisions based
on the latest project updates and performance metrics.
 History and Formation of Coal India Limited
With dawn of the Indian independence a greater need for coal
production was felt in the First Five Year Plan. In 1951 the Working
Party for the coal Industry was set up which included representatives
of coal industry, labour unions and government which suggested the
amalgamation of small and fragmented producing units. Thus the idea
for a nationalized unified coal sector was born. Integrated overall
planning in coal mining is a post-independence phenomenon.
National Coal Development Corporation was formed with 11
collieries with the task of exploring new coalfields and expediting
development of new coal mines.
 Initiative
CIL has a comprehensive Risk Management Framework in place,
which consists of (a) a process to identify, prioritize and formulate
mitigation plans for prioritized risks, and (b) a framework of roles &
responsibilities of various officials, Committees and the Board, in
discharging the risk management process, periodicity of reporting
(Risk Management Calendar) and related templates and enablers to
build up a strong Risk Management Culture within CIL in achieving
company's goals and objectives.
As part of this Risk Management Framework, risk owners and
mitigation plan owners have been identified for each risk and
corresponding mitigation plans to ensure continuous risk monitoring
and risk mitigation. A sub-committee of the Board of Directors viz.
Risk Management Committee (RMC) has been constituted in
compliance with SEBI (LODR) Regulations 2015.
Implementation of the governance process envisaged in the Risk
Management Framework, including facilitation for formulation of
Risk mitigation plans for the Prioritized Risks identified is being
monitored by Chief Risk Officer(CRO) and his team under the
direction of Risk Management Committee of CIL. New risks are also
being identified and incorporated with time as per the direction of the
Risk Management Committee of CIL.During the year 2019-20, Seven
meetings of the Risk Management Committee of CIL were held as per
the directive of the RMC.
 SWOT Analysis
Strengths:
 Largest coal producer: CIL is the largest coal-producing company
in the world, which gives it a significant advantage in terms of
scale and resources.
 Diverse product portfolio: CIL produces a wide range of coal
products, catering to various industries, which reduces its
dependency on any single market segment.
 Strong distribution network: CIL has an extensive distribution
network, allowing it to reach customers efficiently across India.
 Government support: As a state-owned enterprise, CIL receives
support and protection from the Indian government, providing
stability and security.
Weaknesses:
 Labor issues: CIL has faced challenges related to labor strikes and
disputes, impacting its production and operations.
 Environmental concerns: The coal industry is under increasing
scrutiny due to its environmental impact, which could lead to
stricter regulations and higher compliance costs for CIL.
 Aging infrastructure: Some of CIL's infrastructure may be
outdated, leading to inefficiencies and higher maintenance costs.
 Dependence on coal: CIL's business is heavily dependent on coal,
which is a non-renewable resource, posing long-term sustainability
challenges.
Opportunities:
 Renewable energy transition: The global shift towards renewable
energy sources presents an opportunity for CIL to diversify its
energy portfolio and invest in cleaner technologies.
 International expansion: CIL could explore opportunities to expand
its operations globally, especially in markets with growing energy
needs.
 Technological advancements: Investing in new technologies, such
as automation and digitization, could improve efficiency and
reduce costs for CIL.
 Coal beneficiation: CIL could focus on coal beneficiation to
improve the quality of its coal products, meeting the demands of
high-grade coal users.
Threats:
 Competition: CIL faces competition from other coal producers,
both domestically and internationally, which could impact its
market share and profitability.
 Regulatory changes: Changes in government policies and
regulations, especially related to environmental standards, could
increase compliance costs and affect CIL's operations.
 Substitution: The availability of alternative energy sources, such as
natural gas and renewables, could reduce the demand for coal,
posing a threat to CIL's business.
 Market volatility: Fluctuations in coal prices and demand could
impact CIL's revenue and profitability.
 Products & Services
1. Coking Coal :These coals, when heated in the absence of air, form
coherent beads, free from volatiles, with strong and porous mass,
called coke.
 These have coking properties
 Mainly used in steel making and metallurgical industries
 Also used for hard coke manufacturing
2. Semi Coking Coal: These coals, when heated in the absence of air,
form coherent beads not strong enough to be directly fed into the
blast furnace. Such coals are blended with coking coal in adequate
proportion to make coke.
 These have comparatively less coking properties than coking coal
 Mainly used as blend-able coal in steel making, merchant coke
manufacturing and other metallurgical industries
3. Non-Coking Coal: These are coals without coking properties.
 Mainly used as thermal grade coal for power generation
 Also used for cement, fertilizer, glass, ceramic, paper, chemical
and brick manufacturing, and for other heating purposes
4. Washed And Beneficiated Coal:These coals have undergone the
process of coal washing or coal beneficiation, resulting in value
addition of coal due to reduction in ash percentage.
 Used in manufacturing of hard coke for steel making
 Beneficiated and washed non-coking coal is used mainly for
power generation
 Beneficiated non-coking coal is used by cement, sponge iron and
other industrial plants
5. Middlings: Middlings are by-products of the three stage coal
washing / beneficiation process, as a fraction of feed raw coal.
 Used for power generation
 Also used by domestic fuel plants, brick manufacturing units,
cement plants, industrial plants, etc.
6. Rejects:Rejects are the products of coal beneficiation process after
separation of cleans and / or middlings, as a fraction of feed raw
coal.
 Used for Fluidized Bed Combustion (FBC) Boilers for power
generation, road repairs, briquette (domestic fuel) making, land
filling, etc.
7. Coal Fines / Coke Fines :These are the screened fractions of feed
raw coal and LTC coke / CIL Coke respectively, obtained from the
Dankuni Coal Complex and other coke oven plants.
 Used in industrial furnaces as well as for domestic purposes.
 Impact of Covid 19 on social life of coal
employees
Coal belt is generally situated in remote areas. These belts are
developed due to the existence of coal mining industry. These areas
are generally taken the shape of small towns with the population of
mine workers and inhabitants of nearby villages and localities. These
areas are having well developed infrastructures with self sustained
economy. These areas are having small population in general. These
areas having compact market places, which are only places for people
to purchase their daily needs. These places having self sustained
economy though these are situated in far places from main towns.
Majority of population in coal belts are coal employees. They are
having good earnings. They contribute much to the prosperity of these
areas. These areas having mixed population of local and outsider
inhabitants. Coal companies provides employment to land oustees as
well as recruits employees. So, they are having employees of different
region, religion, caste and customs. People in these areas having
different societal groups and gatherings, formal and informal
associations and celebrations. Corona impacts adversely to life style
of coal employees. With the arrival of corona and imposition of lock
down, all the formal and informal social gatherings are stopped.
Families of coal employees are almost locked in their houses. All type
of societal activities are ceased. Markets are closed. Gathering are
ceased. School and colleges are closed. All things are closed except
the coal mines and offices.
Corona protocols were imposed strictly in these areas. The societal
atmosphere in these areas are abruptly changed. Amid all the
adversities coal employees were on work. They are on their duties as
usual but within strict protocols to be followed. They followed all
guidelines of administration with full spirit and mean while
contributing towards the energy security of nation. Situation is tough,
scenario is tough but the objective of coal employees is same as in
normal situation. They don't having any liberty or relaxation. They are
grasped with the unseen fear of virus. Coal employees left for the
work place as usual though the atmosphere is full of panic and fear.
They know the risk they are taking for the nation's energy security.
They are well known that they may got infected and carry the
infection to their home in the situation. Markets are closed. Essential
things are available only in stipulated times. Professional and personal
lives are very difficult to run simultaneously. But coal employees
handle this difficult scenario. They understand their responsibilities
towards country as well as the family. They follow all precautions
strictly at work place. After returning from work, they follow strict
precaution to keep themselves and their family safe from virus. They
are keeping themselves separate from family members as much as
possible to stop any possible spread. Mask and sanitizer becomes the
part and parcel of life.
With the increase in spread of COVID-19, the situation became
tougher day by day. The news of death of coal workers due to
COVID-19 spread in coal belts. The atmosphere of grieves and
sorrow spread throughout these areas. Corona engulf not only coal
workers but their family members also. Death toll increases day by
day. People faced deep concern and fear. But still, coal employees are
on work with full commitment to ensure their responsibility towards
nation.
 Prior to 1991 and after New Economic Policy
Before the New Economic Policy of 1991, Coal India Limited (CIL)
operated in a regulated environment under the Indian government's
control. Here's a brief overview of CIL's corporate history during
these periods:
Prior to 1991 (Pre-New Economic Policy):
 Formation: CIL was formed in 1975 through the nationalization of
coal mines in India. It was created as a state-owned entity to
manage the coal mines previously owned by private companies.
 Regulated Market: During this period, the coal sector in India was
highly regulated, with CIL having a monopoly over coal mining
activities. The government controlled coal production, pricing, and
distribution.
 Expansion: CIL focused on expanding its coal production capacity
to meet the growing demand for coal in India's industrial sector. It
undertook various projects to increase production from existing
mines and develop new coal mines.
 Labor Relations: CIL faced challenges related to labor strikes and
disputes, which sometimes disrupted its operations and affected
coal production.
After the New Economic Policy (Post-1991):
 Liberalization: With the implementation of the New Economic
Policy in 1991, India started to liberalize its economy, including
the coal sector. The government began to gradually open up the
coal mining industry to private and foreign investment.
 Restructuring: In response to the changing economic environment,
CIL underwent a restructuring process to improve efficiency and
competitiveness. It focused on modernizing its operations, adopting
new technologies, and improving productivity.
 Market Competition: Post-liberalization, CIL faced increased
competition from private players entering the coal mining sector.
 The government introduced reforms to promote competition and
efficiency in the coal industry.
 Diversification: CIL diversified its operations and started exploring
opportunities in coal beneficiation, coal-to-liquid projects, and
renewable energy to adapt to the changing market dynamics and
reduce its reliance on traditional coal mining.
 Future Outlook
CIL is committed to playing a major role in achieving the Nation’s
energy security. Based on the demand projection in ‘Vision 2024’ for
the coal sector in the country and subsequent demand projection on
CIL, a roadmap has been prepared wherein CIL has envisioned 1
Billion Tonne (Bt) production in the year 2025-26 to meet the coal
demand of the country. To achieve this target, CIL has already
identified all resources required, including major projects that will
contribute to its 1 BT production plan.