Coal India says it instead plans to pay each family of a deceased worker 36,000 rupees ($A646) per month.
“We are in discussions with the unions to implement this scheme in lieu of the existing one because we are looking at reducing the number of female workforce in the company because they cannot be sent to mines or remote locations for coal explorations," a senior Coal India official told the India Times.
Since 1974 the company has been following the practice of employing women whose husbands have died during their tenure with Coal India.
The official said the 26,000 women employed on compassionate grounds could not be usefully employed by the company because the Indian Mines Act did not allow them to be sent to underground or open shaft mines.
Instead the women take up general positions as mazdoors (unskilled labourers), peons, sweepers and paramedical roles after they are offered a job at the company.
However, the female-dominated sector is in surplus and the company has implemented a voluntary retirement scheme.
The company said it was still willing to employ male family members if they were capable and of legal working age.
The company is in the process of working out a package that would be offered in lieu of jobs to the deceased’s wife in case there are no male members in the family.