Row over Singareni bonus intensifies as Kavitha presses for gross-profit payout to miners

The debate over how to reward Singareni Collieries Company Limited (SCCL) workers has sharpened, with Telangana Jagruthi president K. Kavitha alleging that the state government’s latest profit-share announcement undercuts miners and weakens the state-run coal company. Speaking in Srirampur, Mancherial, during Bathukamma celebrations, she called for bonuses to be calculated on gross profits instead of net profits and pressed the government to settle substantial dues allegedly owed to SCCL.

What triggered the row

• The Telangana government announced a 34% profit-share bonus for SCCL workers, pegged to the miner’s net profits for 2024–25.
• Kavitha contends this basis reduces workers’ take-home bonus compared with a gross-profit calculation and undermines morale in the coal belt.
• She said Telangana Jagruthi will consult SCCL employees and other stakeholders before deciding on next steps.

The numbers in dispute

• Bonus basis: The core dispute is whether the bonus pool should be computed from gross or net profits. A net-profit basis, after deductions and expenses, typically yields a smaller distributable amount than gross profit.
• Worker impact: Kavitha argued that each worker stands to lose significantly under the current plan. While she did not provide a per-employee estimate, she framed the gap as material for families reliant on coal-sector wages.
• Dues claim: She alleged the state owes SCCL around ₹42,000 crore. The claim, if accurate, would be a major balance-sheet issue for the miner. There was no immediate official clarification on the amount or its components.

Claims on borrowing and investment priorities

• Kavitha accused the state of attempting to leverage SCCL’s balance sheet by seeking large loans from the public-sector miner.
• She said the government is exploring gold and copper opportunities in Karnataka while not prioritising new coal mine development in Telangana.
• The concern: Redirecting focus and financial capacity away from SCCL’s core operations, she argued, could constrain output, profitability, and long-term worker benefits.

What SCCL means to Telangana

• Strategic role: SCCL, jointly owned by the Telangana government and the Union government, is a key coal producer and supplier to the region’s thermal power plants. Its operations anchor employment and local economies across districts like Bhadradri Kothagudem, Mancherial, and others in the coal belt.
• Worker welfare: Bonus declarations are a recurring flashpoint in public-sector coal companies. The formula used—gross vs net—can decisively influence worker payouts and labour relations.
• Fiscal linkages: SCCL’s finances are interconnected with state energy needs, power tariffs, and public-sector wage settlements. Large outstanding dues, if validated, could affect investment cycles and maintenance.

Political and festival backdrop

• Kavitha’s remarks came during Bathukamma festivities, a key cultural event in Telangana that often doubles as a community outreach platform for political leaders.
• Her intervention aligns with a broader political contest over economic stewardship of state-run enterprises and the treatment of organised labour.
• Telangana Jagruthi’s promise of consultations suggests potential escalation, including protests or policy petitions, depending on the response from the government and SCCL management.

What’s missing and what to watch

• Government response: As reported, there was no immediate reaction from the Telangana government or SCCL management to the allegations about bonus calculations, dues, or borrowing plans.
• Data clarity: Transparency on SCCL’s 2024–25 financials, the bonus formula, and any state liabilities will be central to resolving the dispute.
• Operational outlook: Whether the state advances approvals for new mines, accelerates capex, or revises the bonus methodology will shape the company’s trajectory and labour climate.

Potential ripple effects

• Industrial relations: Disagreements over bonus calculations can strain management-worker relations, affecting productivity and safety at mines.
• Power supply: Any disruption at SCCL could have knock-on effects for coal availability to power plants and, by extension, grid stability and costs.
• Investment confidence: Clarity on SCCL’s financial independence and the state’s dues could influence lender and vendor confidence, impacting borrowing costs and project timelines.

In the near term, the focus will be on whether the state revisits the bonus policy or offers a clarifying breakdown of the net-profit calculation to address worker concerns. Medium term, the balance between supporting SCCL’s core mining program and broader mineral exploration ambitions will test the government’s ability to manage both fiscal prudence and worker welfare in Telangana’s coal heartland.