Mining ban, curbs on coal production stretch current account deficit
While the exports of iron, traditionally a major item in the country's export basket, have fallen by a steep 63.6% year-on-year to $1.2 billion during April-December 2012, value-added exports (iron and steel) also fell 14.4% to $4.2 billion. India's coal deficit has been on the rise owing to lack of competition in the mining of the fuel and technological obsolescence. More recently, the environment ministry's earmarking of potential areas for coal mining as no-go areas have hit the sector hard. Coal export, marginal though it is, has fallen too in the first nine months of this fiscal, by 21.9% to $56 million.
Iron ore, steel and coal contributed almost 10% of the trade deficit during April-December 2012, which is the same level as it was during the whole of 2011-12, but more than double the 2009-10 level of 4.3%. Net coal imports alone was 22.2% of CAD in the first half of this fiscal.
According to the government data released on Tuesday, mining output fell 4% year-on-year in December and was down 1.9% in first nine months of 2012-13. The sector has started showing signs of slowdown since 2011-12 when output fell by 2% after ban on illegal mining halted excavation of iron ore
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