KOLKATA: The government’s plan to push Coal India Ltd (CIL) to produce one billion tonnes of coal by 2020 has taken a back seat as officials now think that the Indian economy is not yet equipped to consume the quantity and huge unsold stocks are testimony to it. Now the company has been asked to produce to match demand.This is likely to mean that Coal India will have to be content with producing less than the initial targets set for each year leading to less than one billion tonnes of production by 2020. “Coal India has now been asked to produce as much as the market can consume. It has also been asked to devise ways so that more coal is sold, including import substitution as well as devise new types of e-auction that can lead to more coal sales,” a coal sector official said.In 2015, when the one billion tonne target was set, coal was in short supply and a number of coal fired power plants were languishing due to non-availability of the fossil fuel, prompting the scaled up target. The government jacked up production targets for each years starting 2015-16 to reach one billion tonnes by 2020. Coal India responded extremely well to the government’s new production target and managed to meet it in the first year – 2015-16. However, it resulted in coal surplus at almost all coal plants consistently for the last several months as well as huge unsold stocks at pit heads. If coal is stocked beyond a point it tends to catch fire and hence is risky.In fact, at present total coal stocks has been hovering around 73 million tonnes, of which 28 million tonnes which is enough to produce power non-stop for 21 days days has been lying with power plants. The rest at 45 million tonnes is stacked at mine yards. “Power demand was expected to grow around 7-8% per year.Instead it grew at 4-5%,” said Santosh Kamath, partner, KPMG , and a power sector expert. “Growth in coal production was higher than growth in the power generation leading to accumulation of coal stocks,” said Jayanta Roy, senior vice president at ICRA “Sluggish demand from power utilities was a constraining factor which resulted in muted off-take,” said Coal India in a statement recently. However, Coal India is now equipped to produce as much as required but it has been holding on to its production because of sluggish demand. Its strategy on the production front is to achieve a high growth rate of top soil removal for coal seams making them ready for production.“With coal ready for mining on the shelf, Coal India will be able to raise the production once the demand for coal picks up. The entire machinery can be deployed to extract coal to match the demand,” Coal India said.