The Ministry of Coal on Thursday said it has stepped up efforts with a robust incentive package to promote underground coal mining which is more environment-friendly, as it causes significantly less surface disruption compared to opencast operations.

The ministry has introduced a series of transformative policy measures aimed to encourage the adoption of advanced technologies—such as continuous miners, longwall systems, remote sensing tools, and AI-based safety mechanisms—which will boost productivity while ensuring ecological balance, according to an official statement.

These bold reforms address the traditional challenges of high capital investment and longer gestation periods, reaffirming the Government’s resolve to modernize the coal ecosystem while aligning with the broader vision of sustainable development, the statement explained.

As part of these reforms a strong package of incentives has been rolled out to accelerate the growth of underground coal mining. These include a reduction in the floor percentage of revenue share for underground coal mines from 4 per cent to 2 per cent. This targeted reduction offers substantial fiscal relief and enhances the financial viability of underground projects.

The mandatory upfront payment requirement for underground mining ventures has been completely waived off. This measure removes a significant financial barrier, encouraging broader participation from the private sector and facilitating faster project implementation.

These incentives are further complemented by an existing 50 per cent rebate on performance security for underground coal blocks, collectively lowering the entry threshold and facilitating smoother project implementation.

“The Ministry’s reform-oriented approach underscores its commitment to fostering a future-ready, investment-friendly, and innovation-driven coal sector. By incentivizing underground mining, the Government is not only catalysing economic growth but also driving the industry toward greater efficiency, safety, and employment generation,” the statement said.

These forward-leaning reforms mark a strategic shift toward cleaner and more sustainable coal extraction practices. They are poised to unlock the vast untapped potential of underground mining in India, fostering innovation, reducing carbon emissions, and contributing meaningfully to the nation’s energy security and Atmanirbhar Bharat objectives.