Diesel deregulated, prices cut by Rs 3.37 a litre

October 18, 2014

New Delhi, Oct 18: In much-awaited reform, the government on Saturday deregulated diesel prices, a move that will result in a price cut of Rs 3.37 a litre with effect from midnight tonight.

Diesel deregulatedFinance Minister Arun Jaitely said the Cabinet in its meeting today decided to deregulate or free diesel prices. Retail rates will now reflect international movement in oil prices.

As a result, rates will be cut by Rs 3.37 a litre with effect from midnight tonight.

This is the first reduction in diesel rates in over five years. Diesel rates were last cut on January 29, 2009 when they were reduced by Rs 2 a litre to Rs 30.86.

Diesel prices were last raised by 50 paisa on September 1 and cumulatively risen by Rs 11.81 per litre in 19 instalments since January 2013.

There couldn't have been more opportune time for the decision. Oil prices are near a four-year low and two major state elections are out of the way.

Reserve Bank Governor Raghuram Rajan has recently called on the government to "seize this moment", while inflation is the lowest in five years and refiners are selling at a profit for the first time ever.

Brent crude has fallen 25 percent this year to around USD 83 per barrel and expectation is that it may not cross USD 100 barrel anytime soon.

The process was set in motion by the previous UPA government when it eliminated controls on petrol prices in 2010 and in January last year decided to raise diesel prices by up to 50 paisa a litre every month.

The result has been that petrol prices have moved in tandem with global cost and retail rates being reduced on five occasions since August on falling oil rates. Prices have cumulative come down by close to Rs 7 per litre in last two-and-half months.

On diesel, the entire under-recovery or loss has been eliminated and oil firms started making profit from second half of September. The over-recovery or profit has since reached Rs 3.56 per litre.

Deregulation would mean that the government and state-owned explorers including Oil and Natural Gas Corp (ONGC) are no longer subsidising diesel.

Finance Minister Arun Jaitley had budgeted Rs 63,400 crore for petroleum subsidies which was 25 per cent lower than previous fiscal. But unlike past, the subsidy bill is unlikely to overshoot the budgeted amount due to fall in oil rates.

Oil subsidy account for a quarter of Rs 2.51 lakh crore.

Originally, petrol and diesel prices were deregulated in April 2002 when the NDA government was in power. Administered pricing regime, however, made a back-door entry towards the end of NDA regime in the first quarter of 2004 when crude prices started inching up.

The Congress-led UPA controlled rates as international oil prices went through the roof. In June 2010, however, it freed petrol price from its control and rates have since then moved more or less in tandem with cost.

It had in-principle decided to deregulate diesel, which is used in everything from cars and trucks to back-up power generators and agricultural water pumps. The fuel accounts for 43 per cent of the nation's fuel consumption.

In January 2013, the then UPA government decided to deregulate diesel prices in stages through a monthly 50 paise a litre increase. Rates were last hike on September 1 after which losses have been wiped off.

It is estimated that under-recovery or revenue loss on selling diesel, LPG and kerosene at prices lower than imported cost this fiscal will be around Rs 86,080 crore.

This will have to be met by cash subsidy from government as well as dole from upstream oil producers like ONGC.

The under-recovery estimate for the current fiscal is lower than Rs 1,39,869 crore of last fiscal. In 2013-14, the government had provided Rs 70,772 crore by way of cash subsidy while upstream firms picked up Rs 67,021 crore tab.

Sources said the under-recovery in (April-June) was Rs 28,691 crore. This was mostly met by Rs 11,000 crore cash subsidy from the government and Rs 15,547 crore coming from ONGC, Oil India Ltd and GAIL. The remaining Rs 2,144 crore was absorbed by fuel retailers (IOC, BPCL and HPCL).

In second quarter, the under-recovery is estimated at Rs 21,198 crore with diesel accounting for Rs 2,848 crore as compared to Rs 9,037 crore in the June quarter. Kerosene under-recovery was Rs 6,950 crore (Rs 7,524 crore in Q1) and LPG was Rs 11,400 crore (Rs 12,129 crore in Q1).

While diesel losses have been wiped off, oil firms lose Rs 31.22 a litre on kerosene and Rs 404.64 per 14.2-kg LPG cylinder.

Sources said government had provided Rs 1,00,000 crore cash subsidy in 2012-13 when under-recoveries touched an all- time high of Rs 1,61,029 crore. In the preceding year, Rs 83,500 crore was given. Upstream firms had chipped in with Rs 60,000 crore in 2012-13 and Rs 55,000 crore in 2011-12.

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News Network
July 24,2020

New Delhi, Jul 24: The Delhi High Court on Friday asked the ICMR to come out with a clarification that mobile number, government-issued identity card, photographs or even a residential proof ought not to be insisted upon for Covid-19 test of mentally ill homeless persons.

According to an Indian Council of Medical Research (ICMR) advisory of June 19, every person who was to be tested for Covid-19 has to provide a government-issued identity proof and should have a valid phone number for tracing and tracking the individual and his/her contacts.

A bench of Chief Justice D N Patel and Justice Prateek Jalan said that ICMR should issue a clarification by way of a circular or an official order that the identity proof, address proof and mobile number are not required for testing mentally ill homeless persons.

The high court said a camp can be organised for testing such persons as is being done across Delhi for others.

"Guidelines have to be given by you (ICMR). You put it in black and white for the states'' benefit. You only need to clarify in two-three lines that mobile number, address proof and identity cards are not required for testing mentally ill homeless persons," it said.

"Use your powers for the public at large. Once you do so (issue the clarification), all states will comply," the bench added.

Additional Solicitor General Chetan Sharma, appearing for ICMR, sought time to take instructions from the government regarding the observations made by the bench.

The high court, thereafter, listed the matter for further hearing on August 7.

The bench was hearing a PIL moved by advocate Gaurav Kumar Bansal seeking directions to ICMR and Delhi government to issue guidelines for Covid-19 testing of mentally ill homeless persons in the national capital.

Coronavirus India update: State-wise total number of confirmed cases, deaths on July 24

The high court on July 9 had asked the ICMR to consider the plight of the mentally ill homeless persons and see whether they can be tested without insisting upon a mobile number, government issue identity card and residential address proof.

The bench had said to ICMR that many homeless mentally ill persons are institutionalised or in shelter homes and therefore, traceable, so there was no need for their identity proof or phone numbers to test them for Covid-19.

In response to the court''s query, ICMR has filed an affidavit stating that the purpose behind the submission of government identity card and telephone number was to ensure proper tracking and treatment of positive cases and their contacts as ''Test/Track/Treat'' is the best strategy for control of Covid-19 pandemic. 

It further said that since health was a state subject, the concerned state health authority may consider adopting a suitable protocol to ensure that the strategy of ''Test/Track/Treat'' is followed and the grievance raised in the PIL is also addressed.

ICMR, in its affidavit, has said that it has only advised facilitating contact tracing as well as tracking of the Covid-19 infected patients.

"The modalities regarding the contact tracing as well as tracking of the Covid-19 infected patients completely falls under the domain of IDSP. NCDC and state health authorities. 

"ICMR is a research organization and the contact tracing, as well as tracking of the Covid-19 infected patients, is not under the domain of ICMR," it has said in its affidavit.

Bansal has claimed in his petition that the Delhi government has not taken seriously the lack of guidelines with respect to Covid-19 testing of mentally ill homeless persons.

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He has said the high court had on June 9 directed it to address the grievances raised by him in another PIL with regard to mentally ill homeless persons in accordance with law, rules, regulations and government policy.

He said that on June 13 he also sent a representation to the Chief Secretary of Delhi government for providing treatment to mentally ill homeless persons in the national capital who have no residence proof. 

However, nothing was done by the Delhi government, he had told the court.

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Agencies
April 14,2020

Mumbai, Apr 14: The Shiv Sena and NCP said Prime Minister Narendra Modis address to the nation on Tuesday lacked substance as he did not suggest ways to strengthen the economy or a relief package for the poor and those worst hit by the lockdown.

Shiv Sena spokesperson Manisha Kayande also took a dig at the prime minister, saying he thankfully did not give any activity to people this time like clanging utensils or lighting lamps.

Modi on Tuesday announced that the lockdown across the country will be extended till May 3, saying the measure has produced a significant outcome in containing the infection.

He said implementation of the lockdown will be strictly ensured in its second phase and detailed guidelines will be brought out on Wednesday to ensure that outbreak does not spread to new areas.

Some relaxations may be allowed after April 20 in places where there are no hotspots, he said.

Kayande said Modi could have announced extension of the lockdown on Wednesday itself along with the new guidelines, instead of declaring it separately.

"He could have elaborated steps to be taken to tackle the coronavirus, relaxing restrictions on movements in different areas (depending upon threat posed by the disease)," she said.

"His speech normally is more of a rhetoric than substance. Thankfully, he did not give any other event to the people like lighting up lamps or clanging utensils. There was nothing substantial (in the address), the only takeaway was that the lockdown has been extended, she added.

Maharashtra Minister and NCP national spokesman Nawab Malik noted that Modi talked about helping the poor.

"But, he could have announced a package on behalf of the central government to help the poor, those working in the unorganised sector who are the worst hit due to the lockdown.

There was no mention of it anywhere," Malik said.

Another NCP spokesman Mahesh Tapase said it was expected that the prime minister would address the economic concerns being faced by the country.

"The least to expect was the announcement of a slew of measures to kick-start the economy in a phased manner as and when the restrictions are lifted, he added.

Tapase said the employers and employees wanted to know from the government how recession and unemployment will be tackled in the time to come.

"Access to capital for business, especially for MSMEs and agriculture, is a big concern. Supply and logistics is the cornerstone of economic activity which has come to a virtual standstill," he said.

The 2020-21 fiscal looks grim and hence, the right stimulus from the government coupled with a renewed zeal by the industry will only bring the economy back on track, he suggested.

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News Network
March 27,2020

Mumbai, Mar 27: The Reserve Bank of India (RBI) on Friday lowered the key repo rate by 75 basis points to 4.4 per cent in a bid to arrest the economic slowdown amid coronavirus (COVID-19) outbreak.
The reverse repo rate now stands at 4 per cent, down by 90 basis points, said RBI Governor Shaktikanta Das adding this has been done to make it unattractive for banks to passively deposit funds with the central bank and instead lend it to the productive sectors.
The six-member monetary policy committee (MPC) met on March 24, 25 and 27 and voted 4:2 in favour of the repo rate reduction. The MPC also decided to continue with the accommodative stance as long as it is necessary to revive growth and mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target.
"The need of the hour is to shield the economy from the pandemic," said Das. "We need to mitigate the impact of coronavirus, revive economic growth and provide financial stability."
Repo rate is the rate at which a country's central bank lends money to commercial banks, and the reverse repo rate is the rate at which it borrows from them.
The RBI Governor further said that the economic growth and inflation projection will be highly contingent depending on the duration, spread and intensity of the pandemic.
"Global economic activity has come to a near standstill as COVID-19 related lockdowns and social distancing are imposed across a widening swathe of affected countries. Expectations of a shallow recovery in 2020 from 2019's decade low in global growth have been dashed," said Das.
"The outlook is now heavily contingent upon the intensity, spread and duration of the pandemic. There is a rising probability that large parts of the global economy will slip into recession," he said.
However, the RBI has injected liquidity of Rs 2.8 lakh crore via various instruments equal to 1.4 per cent of GDP. "Along with today's measures, liquidity measures equal to 3.2 per cent of GDP. The RBI will take continuous measures to ensure liquidity in the system."
The RBI governor has said that all banking institutions can offer a three-month moratorium on all loans for a period of three months. The RBI has also allowed banks to restructure the working capital cycle for companies without worrying that these will have to be classified as a non-performing asset (NPA).
The three-month moratorium will permit banks to avoid a large onset of NPAs during the 21-day lockdown and keep their books healthy.
Das said banks and other financial institutions should do all they can to keep credit flowing to economic agents facing financial stress on account of the isolation that the virus has imposed.
"Market participants should work with regulators like the RBI and the Securities and Exchange Board of India (SEBI) to ensure the orderly functioning of markets in their role of price discovery and financial intermediation," he said.

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