The CMD added that rating agency Crisil, which has given the company an “AAA rating” on its financial performance, has already “flagged this issue”. One of the crucial reasons why CIL has to take a quick decision on a coal price increase is that it contributes to the government’s coffers in a big way by way of taxes and dividends. Out of the estimated 2006-07 pre-tax profit of Rs 8212.69 crore, as much as Rs 4979.45 crore would go towards taxes and dividends.

Therefore, even a small drop in Coal India’s profits does considerable damage to the PSU’s contribution to government finances.

Asked if CIL would consider reducing coal prices in view of the current inflationary trend in the economy, as even its reduced profit was quite a substantial amount, Bhattacharyya categorically ruled out such a possibility. He had to keep the company’s interests in mind, the CMD pointed out.