Navigating India’s Coal Phase-Out with Focus on Social Equity

India’s shift from coal-based energy to renewable sources is gaining pace as the country aligns itself with global climate targets and domestic clean energy goals. However, the transition presents significant challenges in ensuring social and economic equity for workers and communities historically dependent on coal. As India targets net-zero emissions by 2070, the emphasis on a "just transition" is critical to prevent widespread job displacement and economic disruption in coal regions.

Coal remains central to India’s energy landscape, accounting for over 70% of electricity generation. The sector directly employs around 500,000 people, with several million more in indirect jobs and supporting industries. States like Jharkhand, Chhattisgarh, Odisha, and West Bengal are heavily dependent on coal mining and thermal power generation for revenue and employment. The reduction of coal production and closure of power plants risk severe economic consequences if not strategically managed.

The central government, under the Ministry of Power and the Ministry of Coal, has initiated a phased plan to reduce dependency on coal while promoting renewable energy. This includes setting up solar parks, investing in green hydrogen, and expanding wind and hydro capacity. While the policy shift is clear, the pace of execution in affected regions has raised concerns among labor groups and state administrations.

The Ministry of Labour and Employment, in collaboration with state authorities, has been tasked with reskilling coal workers. Pilot projects in Jharkhand and Chhattisgarh have introduced training programs in solar panel installation, battery storage maintenance, and other renewable energy operations. However, these initiatives remain small in scale and have yet to reach a majority of the workforce. Additionally, wage levels in the green economy often fall short of the stable incomes offered by coal mining jobs, complicating the transition.

The government has also created the Energy Transition Advisory Committee, involving stakeholders from central and state bodies, labor unions, and industry experts. The committee is working on frameworks for land rehabilitation, pension security, and alternative livelihoods. Financial aid is being planned through mechanisms like the Coal Cess and carbon market revenues, which are expected to be redirected towards social protection funds for coal belt regions.

International climate finance is playing a growing role. In 2023, India signed a Just Energy Transition Partnership (JETP) with developed nations, securing commitments of $12 billion in concessional loans and grants to support renewable infrastructure and social programs. However, only a fraction of this funding has been disbursed. Delays in project approvals and state-level coordination continue to hinder deployment.

State governments have been asked to prepare district-level just transition plans, but progress remains uneven. Jharkhand has proposed a roadmap focusing on healthcare, education, and alternative agriculture in affected areas. Chhattisgarh has emphasized the need for public sector support in job creation beyond energy. However, fiscal constraints and lack of institutional capacity challenge their implementation.

Community resistance to mine closures has also surfaced, especially in regions where coal is the primary source of livelihood. In some areas, new coal block auctions have been launched despite clean energy commitments, pointing to policy contradictions and pressure from local industries and political interests.

As the energy transition accelerates, a balanced approach is needed to prevent economic fallout in coal-dependent regions. Experts stress that a successful just transition in India requires structural reforms in social protection, labor rights, and economic diversification, beyond the energy sector itself.

While India has made policy-level progress, the on-ground implementation of just transition measures remains limited. Ensuring that no community is left behind in the move to clean energy will depend on scaled investments in social infrastructure, labor retraining, and targeted support for vulnerable populations.

Without a clear roadmap and consistent funding, the promise of a just transition risks remaining aspirational. For India to meet its climate and development goals, aligning energy policy with social equity will be essential in the coming decade.

Sources: Ministry of Power, Government of India