Trade unions at the world's biggest miner of fuel, Coal India, are demanding a 50 per cent rise in workers' wages considering the company's long-term plan to cut the workforce, increase production and raise the prices of fuel. If the demand is met, it'll lead to a dramatic rise in employees' salaries. Notably, Coal India, as a norm, has been revising salaries after every five years for non-executive staff. During previous discussions by trade unions, salaries have increased by a maximum of 20-25 per cent, Bloomberg reported.
Though these talks are at the nascent stage, Coal India is looking for a win-win for both employees and the company. Coal India is considering increasing coal prices for all the big contracts, which will drive costs. The plan to raise prices is also motivated by the soaring international fuel prices. Another benefit of increasing coal prices is assumed to be aligned with India's plan towards clean energy transition. As the coal prices will go up, more consumers will look towards cleaner options.
The cost of running coal and gas power stations is already going up, and amid international pressure to cut coal consumption, any increase in coal prices will only benefit India as more people will shift towards clean energy. Overall, India generates the highest 70 per cent through coal, followed by renewables (12 per cent), hydropower (10 per cent), gas (3 per cent), and nuclear (3 per cent).
"Coal India's production is rising and the employee numbers are reducing every year, which means more profits for the company. There should be no problem with workers getting a small share of that profit," DD Ramanandan, secretary at the Centre of Indian Trade Unions, told the news agency.
The company has over 2.56 lakh employees on its roll as of July 1, but the number is reducing each year as more employees retire. Coal India expects that the employee headcount to drop 5 per cent annually for the next 10 years. This means lower employee cost, and hence the demand for raise in employees' salaries.
In FY21, Coal India had spent 43 per cent of its revenue on employees. Coal India reported its April-June quarter profit at Rs 3,174.4 crore, while its revenue rose to Rs 25,282 crore. Coal India accounts for over 80 per cent of domestic coal output, and the company is eyeing one billion tonnes of output by 2023-24.
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