Govt may give gas subsidy to power, fertiliser sectors

June 29, 2013

Govt_gas_subsidyNew Delhi: Jun 29: The government is considering giving natural gas to power and fertiliser sectors at reduced cost to help them cope with the two-fold increase in gas prices effective from April next year.

The move is expected to increase the country’s annual subsidy burden by $1 billion, contrary to the efforts being made over the past few years to phase out subsidies.

But the government says that revenue from exploration companies by way of royalty, taxes and profits, estimated at $500 million, will take care of the subsidy burden to a great extent.

“We will be getting more than $500 million by way of taxes and profit. Increase in prices was necessary as our own upstream regulator, the Director General of Hydrocarbons (DGH), had branded several discoveries made in deep sea as economically unviable for development at the existing $4.2 per million metric British thermal unit (mmBtu) price,” Petroleum Minister Veerappa Moily said.

“The power and fertiliser ministries have raised the issue. We can look at fixing the input costs for these sectors. The issues will be addressed in course of time,” Finance Minister P Chidambaram told reporters here.

A decision on gas price hike has come for the first time in three years after the sector suffered from lacklustre foreign investment. Domestic companies, too, did not show much interest in oil and gas exploration, owing to low output cost.

No investments

Chidambaram said no investment was coming to India in the oil and gas field. “While investment in India has declined from $6.3 billion in 2008-09 to $1.8 billion in 2012-13, Indian promoters are investing abroad, with $27 billion having flowed out in the last 10 years, and another $10 billion in pipeline,” he said.

“The only way to correct this is to give investors a reasonable price which will attract them to invest here, so that we can increase our domestic production,” he added.

The minister also said that importing gas raised its price to above $13 per mmBtu.

He also said the difference between imported and domestic production even after the two-fold increase in prices would be more than $4.50 per mmBtu.

“Gas importers will make a profit even after the hike,” he said.

The increase in gas price was opposed by the power and fertiliser ministries as it would lead to a higher cost of generating electricity.

Power cost

The power production cost could go up to Rs 6.40 per unit from the current Rs 2.93, they contended.

Chidambaram also rejected suggestions that the gas price hike decision was taken to benefit the private sector.

“We are not being influenced by anyone. If at all we are being influenced, we are influenced by the condition of the economy. Our current economic condition demands that we produce more gas,” he said.

While industry players and India Inc hailed the move, the Fertiliser Association of India (FAI) criticised it, saying that it will raise the government’s subsidy burden by Rs 11,000 crore per annum if urea prices were not corrected in tandem.

FAI Director General Satish Chander rued that the fertiliser industry is already not getting its subsidies in time.

Among upstream oil companies, the ONGC said it expected to add about Rs 8,000 crore in profits annually through the hike in gas prices, while Oil India said it would add Rs 1,000 crore of extra profit through increase.

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News Network
May 25,2020

New Delhi, May 25: Mahindra Group Chairman Anand Mahindra on Monday said lockdown extensions are not just economically disastrous but also create another medical crisis.

While acknowledging that choices are not easy for policymakers, he said a lockdown extension will not help.

"Lockdown extensions aren't just economically disastrous, as I had tweeted earlier, but also create another medical crisis," Mahindra said in a tweet.

He was referring to an article that highlighted "the dangerous psychological effects of lockdowns & the huge risk of neglecting non-COVID patients".

Mahindra, who had earlier proposed a comprehensive lifting after 49 days of lockdown, further said, "The choices aren't easy for policy makers but a lockdown extension won't help".

He said, "The numbers (coronavirus cases) will continue to rise & the focus must be on rapid expansion of field hospital beds with oxygen lines".

He further said, "The army has enormous expertise in this".

On March 22, before the government announced nationwide lockdown, Mahindra had proposed such a move expressing concerns over reports that India was likely to have already reached stage 3 of coronavirus transmission.

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News Network
March 11,2020

New Delhi, Mar 11: Jyotiraditya Scindia, the Madhya Pradesh politician whose surprise exit from the Congress has brought the Kamal Nath government to the brink of collapse, joined the Bharatiya Janata Party on Wednesday. Scindia joined the BJP at an event in national capital Delhi in the presence of party chief JP Nadda.

Scindia, who was warmly welcomed by Nadda, described 10 March, the day that he exited from the Congress as one of the two life-changing days of his life. The first, he said, was 30 September 2001 when he lost his father. Scindia underscored that the Congress was not the party that it had been and had been living in denial.

Scindia had ended his 18-year-old association with the Congress on Tuesday after meetings with Home Minister Amit Shah and Prime Minister Narendra Modi.

Scindia’s exit from the Congress was followed by resignation letters by about 22 MLAs who had been sequestered in Karnataka. The resignation letters were, however, sent to the Governor and not the assembly speaker, and threatens to upend the Kamal Nath government which has a wafer-thin majority.

If the resignations are accepted, the effective strength of the MP assembly will come down to 206, leaving the Bharatiya Janata Party (BJP) with a slender majority beyond the halfway mark of 103 with its 107 MLAs. For now, the Congress is trying to persuade the MLAs to not pull down the state government.

In his resignation letter to Congress chief Sonia Gandhi that Scindia put out on Twitter soon after, he alluded to his discomfort in the party over the last year or so. “...as you well know, this is a path that has been drawing itself out over the last year,” he had written in his letter.

It was seen as a reference to the Congress settling for Kamal Nath as the chief minister after the 2018 state elections though it was Scindia who had led from the front to oust the BJP from Madhya Pradesh. Scindia’s supporters had hoped that the Congress would tell Kamal Nath to give up his second charge - as the party chief in the state - but this also didn’t happen.

The first hint that something was amiss came in November last year when Scindia removed a reference to the Congress in his Twitter bio and instead wrote “public servant and cricket enthusiast”. He had then explained the change to an effort to make the Twitter bio shorter.

Jyotyiraditya Scindia’s aunt Yashodhara Raje Scindia appeared to declare soon after that the 49-year-old would join the BJP when she welcomed his resignation, calling it “ghar wapsi” or homecoming. “Jyotiraditya was being neglected in Congress,” Yashodhara Raje Scindia said.

Scindia’s grandmother, Vijaya Raje Scindia, was one of the founders of the Jana Sangh, the precursor to the BJP. His aunt Vasundhara Raje is a former Union minister and ex-chief minister of Rajasthan and another aunt Yashodhara Raje is a former minister in the Madhya Pradesh cabinet.

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News Network
January 7,2020

New Delhi, Jan 7: The government has asked public sector undertakings to dissuade their employees from participating in the 'Bharat Bandh' called on Wednesday and advised them to prepare a contingency plan to ensure smooth functioning of the enterprises.

Ten central trade unions have said around 25 crore people will participate in the nationwide strike to protest against the government's "anti-people" policies.

Trade unions INTUC, AITUC, HMS, CITU, AIUTUC, TUCC, SEWA, AICCTU, LPF, UTUC along with various sectoral independent federations and associations had adopted a declaration in September last to go on the nationwide strike on January 8.

"Any employee going on strike in any form, including protest, would face the consequences which, besides deduction of wages, may also include appropriate disciplinary action," said an office memorandum issued by the government.

"Suitable contingency plan may also be worked out to carry out the various functions of the ministry/department," it added.

It also issued instructions not to sanction casual leave or other kind of leave to employees if applied for during the period of the proposed protest or strike and ensure that the willing employees are allowed hindrance-free entry into the office premises.

The instructions issued by the Department of Personnel & Training prohibit the government servants from participating in any form of strike, including mass casual leave, go-slow and sit-down, or any action that abet any form of strike.

Besides, pay and allowances are not admissible to an employee for his absence from duty without any authority.

The central trade unions are protesting against labour reforms, FDI, disinvestment, corporatisation and privatisation policies and to press for a 12-point common demands of the working class relating to minimum wage and social security, among others.

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