A strike at CIL will hit output by almost 2 million tonne, given that the company produced four-fifth of the country’s coal output, estimated at 557million tonne during 2012-13.

The dominant trade unions have threatened to go on a strike in December if the government goes ahead with the stake sale of Coal India. Meanwhile with the fiscal deficit crossing 76% of the budget target by September, the government will be under pressure to meet its deficit target of 4.8% of GDP in absence of big-ticket disinvestments, such as those in CIL and Indian Oil Corp (IOC). CIL and IOC stake sales are crucial for the government to meet the 2013-14 disinvestment targets.

The government has so far raised Rs 1,325 crore from disinvestment in MMTC, Hindustan Copper, National Fertiliser, ITDC, State Trading Corp and Neyveli Lignite.

The Indian Mine Workers Federation, affiliated to the left-leaning All India Trade Union Congress, along with CITU and BJP-backed Bharatiya Mazdoor Sangh, are sticking to their guns despite the coal ministry’s claim that it had been able to persuade trade unions to allow a 5% stake sale and another 5% buyback by the PSU without any disruption in production.

The Congress-affiliated INTUC is yet to decide on joining the strike call.

“The three main issues that we are protesting are disinvestment, restructuring, and a possible break-up of CIL, and violation of labour laws for contract workers. We have called a meeting of all CIL unions on November 16 in Ranchi to decide on the strike,” Ramendra Kumar, secretary of Indian Mine Workers Federation was quoted in the Financial Express.

Besides disinvestment the labour unions are agitated with the company engaging Deloitte to advise it on restructuring of operations. The government is also contemplating public-private partnership (PPP) to help CIL raise output by digging deeper at its existing mines. The unions interpret these moves as a prelude to privatisation of the company. Violation of labour mining laws is another issue. “Contract labourers are made to work for more than 8 hours a day in violations of the Mines Act. Safety norms also have not been adhered to,” Kumar was quoted.