Big role for small national park in saving threatened butterflies

One of the smallest national parks records one-fifth of the country’s species

Gorumara National Park, one of the smallest national parks in India, has turned out be a safe haven for butterflies as evident by recent studies that have recorded more than 330 species of butterflies in the park.

There are about 600 known species of butterflies in West Bengal and about 1,500 in India. Gorumara alone accounts for more than half of the species found in the State and about one-fifth found in the country.

The park, located in the State’s Jalpaiguri district, covers an area of only 80 sq. km., and has recorded at least four species of butterflies that have never been found in the State before.

Of these, the Bicolour Cupid and Malayan Nawab are placed in Schedule I of the Wildlife Protection Act, 1972, and the Witch and the Branded Young Fly are in Schedule II of the Act. Animals and insects who are most threatened are slotted in Schedule I of the Act.

Among the 330 species, about 50 are placed in the different Schedules of the Act. Four species of butterflies belonging to Schedule I, 39 species in Scheduled II and seven species categorized in Scheduled IV can be found in the park.

“About 314 of the butterflies were recorded initially as part of an inventory building exercise and published in the form of a book. After the publication about 15 more species have been found,” Sumita Ghatak, Divisional Forest Officer, Wildlife Division II Jalpaiguri told The Hindu.

Representatives of Nature-Mates Nature-Club, a city based non-government organisation, working on wildlife issues, said that the work for identification of the different kinds of butterflies which started in 2012, is still continuing now.

“Apart from being home to animals like elephants, rhinoceros, gaur, leopard and different kinds of deer, we have recorded a huge collection of lesser-known but interesting species of butterflies,” Arjan Basu Roy, a representatives of Nature-Mates said.

Challenge paralysed by society

Our Prime Minister’s call to focus on zero defect manufacturing quality is certainly the correct direction for India’s future. Referring to the IT sector as showing innovation and research prowess 25 years ago, he bemoaned that India is yet to create something pathbreaking like Google, while talent has left the country. Undoubtedly, IT/ITES grew to $86 billion annual exports, but how much adaptable innovation has happened in this business size is debatable, while research investment has been miniscule.

Innovation is a big word, we use it all the time in India, but without capability to produce digital technology basics like hard discs. Thailand is dominating this market. Even the Japanese, Koreans, and now Chinese are incredible adaptable innovators in multiple domains, not fundamental inventors. Where are India’s engineers making wafers and semiconductors in India?

I’m sure our government is better facilitating technical paperwork to ease business nowadays. The real problem is elsewhere though. It’s in capability building that requires extreme behavioural change to match global standards and an entrepreneurial bent of mind. For manufacturing to acquire an edge, we need engineers dedicated to hardcore engineering, and well-trained, disciplined, capability-driven workforce. But look at the cream of our engineers jumping to MBA finance, marketing or HR without even trying out R&D or manufacturing in India. I asked some brilliant 24-year-old IIT-plus-MBA working people, why don’t we hear of 18-year-old Indians having an innovative or entrepreneurial bent of mind?

Several angles emerged in answering this question. Parents in India, they said, want the son to score high marks in school and college, get a high salaried job; the vision for the daughter is wealthy husband and reputable family. Making it to IIT is really tough, they explained. During their past two years in school, they enrolled for special and expensive coaching classes to learn engineering fundamentals to prepare for IIT entrance exams. Children continuously feel, often unstated, pressure from parents when choosing the education stream in high school. Science, required for engineering and medical studies, is always first priority. You need high overall marks to take science. So by default, arts or commerce students are considered less intelligent. Even when good in science, these young professionals said avoiding coaching class was unthinkable because basics are not properly emphasised at school. What’s worse, even with rigorous external coaching they may not make it to IIT.

Why go for competitive IIT, when so many engineering colleges exist? “The job market recognises IIT as top of the pile.” Having become an IIT engineer, why go for MBA? They answered, enterprises value MBA graduates over engineers, it’s obvious from starting salaries where MBAs get double the remuneration. Engineers wanting to pursue an engineering profession find Indian research institutes, R&D labs or corporate engineering positions do not offer the right scope of scientific or engineering work, the payscale is dismal, nor do such jobs enjoy mainstream status. For higher education, IIT graduates try going abroad as MTech or doctoral studies, even in IITs, do not match the high standard of western universities. But an IIT-plus-MBA, especially IIT-plus-IIM is every parent’s dream come true. This upwardly-mobile education gets the best job offers, highest societal recognition, uppermost starting salary, all without having any work experience. “There’s further hierarchy: IIT-IIM with finance specialisation tops all! Such a student was even offered R1 crore annually.” What’s the real difference between IIM and IIT-IIM? “The IIT-IIM definitely has better analytical ability and structured discipline at the start, but after sometime, there’s no difference.” It’s disgraceful how we misuse pure engineering professionals.

Crunching marks to family pressure somewhat explains how societal systems paralyse self-expression, denying our young generation the scope of an inventive bent or entrepreneurial mindset. Here’s where the Prime Minister should start his real brainwashing to displace this culture. When children are dependent and protected like treasures by rich parents, their inventive or entrepreneurial inclination go out the window. When parents don’t have money, children become street urchins. On the other hand, I’ve professionally experienced that less educated people in the practical field like plumbers, electricians, auto or electronic mechanics, now the mobile phone repairers, have a huge bent for entrepreneurship. Such working-class individuals are vast in number, but not valued in society. Here again the Prime Minister needs to strongly support their intellectual development. They can translate their working knowledge into adaptable innovation, but they need the right skill guidance, not through pedagogy but with practical training.

I’m very encouraged by a start-up by one of my client friends. The past 12 years I’ve known Vibhu Hajela, he’d often ask about entrepreneurship as I’ve written about it several times, and I’ve always encouraged him. This 52-year-old mechanical engineer MBA with 27 years of rich work experience, earning annually half a crore of rupees suddenly called last year to say he’s left his job to start a plastic injection moulding factory. He knows he has to generate working capital to continue, and will miss the luxury of good salary at month’s end. I’m sure “Make in India” will succeed with this kind of SME initiative, and the government will support such start-ups. I must add that Vibhu’s wife was extremely supportive of his entrepreneurial drive.

There are several young Americans, school/college dropouts like Steve Jobs and Bill Gates, among others, who invented in a garage or cellar, then successfully marketed their inventions. Thomas Alva Edison left school from age seven because his teacher said he was confused. His mother educated him at home, encouraging him to follow his scientific bent of mind. Edison spent all his pocket money buying chemicals for experiments. He invented the microphone, telephone receiver, stock-ticker, phonograph, movies, office copiers, incandescent electric lights, and owns 1093 patents. When Edison died in 1931, his assistant, Russian-born, Paris-trained chemist Martin Rosanoff said, “Had Edison been formally schooled, he might not have had the audacity to create such impossible things.”

Jan Dhan Yojana crosses 100-mn mark Ministry claims 98.4% households now have bank accounts

The ambitious plan of the government to achieve financial inclusion for all has taken a step closer to its target with 98.4 per cent household in India having bank accounts. Under the Pradhan Mantri Jan Dhan Yojna, unveiled by Prime MinisterNarendra Modi on 28 August last year, 26 January was set as the deadline to open 75 million bank accounts. The target was later revised to 100 million.  

“In the last three months, 103 million new accounts have been opened under the Jan Dhan Yojana. By now, 98.41 per cent households in the country are covered under the scheme,” said Hasmukh Adhia, secretary, department of financial services.

Banks managed to achieve the stiff target of opening 100 million bank accounts a month before the deadline of 26 January.

Adhia said banks had conducted a survey of 219 million household. Of these, 98.4 per cent respondents said they have a bank account. According to the last census, there are 250 million households in the country. “There are 3 crore to 4 crore (30 million to 40 million) who are from the effluent sections of the society declined to take part in the survey,” Adhia said. Adhia added that RuPay cards have been issued to 79.7 per cent of the accounts. The government is also working on seeding theAadhaar number with the bank accounts; 33 per cent of the accounts have already been synced with the Aadhaar numbers. At present, it is not mandatory for accounts to be seeded with Aadhaar for direct benefit transfers (DBT). But the banks have been advised to do so to make DBT transfers easy.

However, a majority of accounts are still inactive with zero balance, and it is a big challenge for the banks to mobilise savings in these accounts.

“We will be deliberating on how to keep the accounts active. We will have to see how to mobilise savings rate from 30 per cent currently to 35 per cent of gross domestic product (GDP). We will also have to see how to use these accounts for DBT, pension distribution and other benefits,” added Adhia.

To deepen financial inclusion now, the finance ministry will be getting into an “open challenge mode” for opening accounts under the Jan Dhan scheme.

This will be announced once the 100 per cent target is achieved. “Under this, anyone who does not have an account can approach a bank and an account will be opened immediately,” said Adhia.

There is a need to make history more inclusive

It is unusual, if not sacrilegious, to invite a person who does not have history bred in his bones to a conclave of men and women steeped in the intricacies of a much talked about but inadequately understood human pursuit that dwells on the past and seeks to enlighten or confound the present. I, therefore, deem it a great privilege to be invited by the Indian History Congress to inaugurate its 75th session.

My own academic discipline in the distant past was political science and I do recall Professor John Seeley's jingle, well-known in my time and presumably not forgotten today, that "History without political science has no fruit and political science without history has no roots."

In more recent times, and for professional reasons, I came to value Winston Churchill's aphorism: "Study history, study history; in history lies all the secrets of statecraft."

Historians at all times have endeavoured, as Herodotus put it, "to preserve from decay the remembrance of what men have done." Historians have dwelt on the facts of the past and sought to make implicit or explicit judgements about those facts. Not to be ignored is a mid-nineteenth century caution that historians "have been seduced from truth not by their imagination but by their reason" pursuant to the impulse of "distorting facts to suit general principles."

Equally hazardous is the propensity to read the past into the present or the present into the past; so is the temptation to ignore the distinction between memory and history. Memory is based on identification with the past and is unavoidably egocentric, while history is based on its treatment as an external object and not a part of the self. History also cannot be faith-based. The domains of the two exist separately and conflation does not further the cause of either. To a lay person, a number of questions are unavoidable. What then is history, and with what does it deal? What is the task of the historian? Is history a science, or an art, or a bit of both?

A simple answer is that it is a method of inquiry, which deals with what has reportedly happened and not exactly as it happened. It is a narrative of change. It has been suggested that historical objectivity is seen to be not a single idea but rather sprawling sets of assumptions, attitudes, aspirations and antipathies. It is evident that on most if not all occasions, the narrative is contested. Such contestations nevertheless need to have a basis in facts, demonstrable and logically sustainable. As E H Carr put it, "the historian without facts is rootless and futile; facts without their historian are dead and meaningless." He added that "the study of history is inescapably the study of causes." This would exclude what has been called "counterfactuals" or the "what if" category and its simplistic assumptions and premises.

It is thus evident that methodology is critical to the study of history. Efforts to curb "intellectual efflorescence" through official dicta can only be viewed as undesirable. Furthermore, contestations over the historical past need civility of discourse to ensure that it does not cross the imperatives of ensuring social peace and societal cohesion. Carr also dwelt on history's wider relevance: "an individual stripped of memory finds the world a confusing place: a society with no sense of history is unaware of where it has come from or where it is going."

Is there a more practical relevance of history? To my mind, it helps us know and learn from the mistakes of the past. Those mistakes relate to frailties in judgement leading to mistakes in statecraft and governance. These as one historian has put it, could be due to tyranny or oppression, excessive ambition, incompetence or decadence, and folly or perversity. In each, the inability or the unwillingness of society or its ruling establishment to pay heed to reason and realism, to dissentingopinion and to alternative courses of policy or action, led to unfounded certitude resulting in mistakes. It is for this reason that in every period of the past, beginning perhaps with the 30th century BC Egyptian King Menes, codes for dispensing justice were enunciated. Alongside, manuals were penned for the guidance of rulers. Departures from these and the resulting consequences is what historians have dwelt upon.

History writing, and history teaching, has a contemporary relevance in a more evident sense. We live in a world of nation states but the idea of a homogenous nation state is clearly problematic. Diversity is identifiable even in the most homogeneous of societies today. The global scene in modern times has been replete with complexities and tensions of what has been called the national question.

In our own country the sheer diversity of identities, 4,635 communities according to the Anthropological Survey of India, is a terse reminder about the care that needs to be taken while putting together the profile of a national identity. It has of necessity to be liberal and accommodative; marked, to quote an eminent scholar, neither by complete homogenisation nor by the particularism of closed communities. Instead, it is a balance struck by "the mutual gravitational pull of disparate sections that make the whole." Our sagacity in building pluralist structures that have stood the test for over six decades, stands in contrast to many strait-jacket edifices in other societies that came to grief. By the same token, these structures need constant nurturing.

It is no longer a matter of debate that history has to be more than narrowly political or economic. The imperative is to make it comprehensive and inclusive of neglected groups in society. These subaltern classes, as Gramsci had pointed out, are not unified and their history, therefore, has to be intertwined with that of civil society. It has challenged what has been called "the univocality of statist discourse." It has sought to focus on Dalit and gender issues. The methodology of studying these opened up new and enriching vistas of study for historians.

The pasture of stupidity, said the great medieval historian Ibn Khaldun, is unwholesome for mankind. He warned historians not to succumb to the "temptation of sensationalism", adding that "a hidden pitfall of historiography is disregard for the fact that conditions within nations and regions change with the change of period and the passage of time."

The great Indian healthcare challenge

Last week I was at a private hospital in Kolkata when I came across the family of a patient who was admitted in the Critical Care Unit (CCU). The breakdown of the current bill for the patient, which the family shared with me, showed the CCUcharge alone at around Rs 8,000 ($129) per day. Of course, this is just a small part of the bill, and only the first day's. In a country where the per capita monthly income is less than Rs 7,000 ($112), these are exorbitant prices for even middle-class households like the one I met, let alone the poor.

So why wouldn't they opt for treatment at a government hospital where prices are subsidised? Because - the family told me - they wanted the best facilities and doctors, which they believe were simply missing in state-run health facilities. The family has had to dip into its savings. It is not unusual in India where out of pocket payments (OPP) or direct cash outlays by individuals/families for healthcare account for more than 70 per cent of total health-related spending. To put things in perspective, consider that the concomitant figure in the US is below 12 per cent.

There are three aspects to the problem at hand: (a) the poor state of government hospitals (broadly lacklustre state participation in the health sector as a whole); (b) the choice citizens make in favour of private healthcare; and finally (c) poverty and health inequality. It is well known that poor Indians who dip into their family savings to pay for privately-provided healthcare often plunge back into the below-poverty-line (BPL) zone as critical illnesses potentially wipe out a lifetime of savings. Remember that even a 0.5 per cent increase in poverty would mean an addition of 6 million BPL households in India.

The three aspects highlighted above are distinct but connected to each other, with each feeding into the other.

The first disturbing reality is that there is a near absence of either a comprehensive/universal state-sponsored insurance programme or a publicly-funded health system in India. The piecemeal health schemes that exist are reportedly marred by ineffective implementation, poor health infrastructure to back up, and even corruption. With the turn of the millennium, India opened up health insurance to private players, but the latter play a marginal role in the health insurance market. Existing public health insurance programmes (by way of employee/ employer contribution) put together cover not more than a quarter of the total population. Importantly, these schemes exclude 51 per cent of Indians who are self-employed (auto-drivers, housemaids, farm labourers and what have you).

The Rashtriya Swasthya Bima Yojana does cover BPL households and its implementation by states has had tangible effects on curbing private expenditure. However, a lot of the dispensaries and hospitals in India's overall public health network lack doctors, beds, medicines and surgical and other infrastructure. Clearly, more state funds need to be channelled to the sector.

Government health expenditure as a percentage of GDP in the US is higher than seven per cent and ranges between six and eight per cent in EU countries. At 1.4 per cent of total GDP, India's state expenditure compares lowly against even other developing countries, leave aside the OECD. India's bed-to-patient and doctor-to-patient ratios (basic parameters) are way below global averages and even below the WHO's minimum ratio stipulations. This situation is fundamentally owed to government hospitals, particularly in remote parts of the country.

On the other hand, across India today, the very word 'private' evokes efficiency. And this perception has penetrated the psyche of ordinary Indians - poor, affluent and those in between. Irrespective of income situation and the impact on domestic finances of making such a choice, a large majority of Indians (an estimated 75-80 per cent) prefer to avail private healthcare facilities for minor and major illnesses. However, unless the situation with public healthcare provision improves substantially from where it is today, we can't even begin to consider reflecting upon the issue of citizen's affinity for the private sector as being a 'problem'. It is safe to assume that people will respond with their feet if government facilities are adequately shored up and brought in line with the advanced diagnostic and treatment facilities of our times.

The Social Progress Index, which ranks countries based on developmental outcomes, ranked India as low as 95th and 97th in the 'Health and Wellness' and 'Nutrition and Basic Medical Care' sections respectively. In the more popular Human Development Index (HDI) India ranked a miserable 135ththis year. Indeed, we don't need global indices to tell us how serious the health policy problem in India is. The situation merits a range of measures: increasing state spending in the sector and beefing up government health infrastructure is a good place to start. A focus on basic hygiene andsanitation meanwhile can aid in prevention. On the cure side, broad-basing and streamlining existing insurance schemes under one umbrella will ensure better delivery and implementation.

Turn the PPP model on its head In restrospect, private sector participation in infrastructure was a case of too much too soon. Now, govt should build assets, and then sell them to private operators

A fundamental feature of our political economy is the demand for social protection. Any government in this country will struggle to create fiscal space for investment spending and make budgetary allocations for infrastructure. Private sector involvement in infrastructure development has therefore become a strategic imperative.

Although the scale of private participation in infrastructure has grown dramatically over the past 15 years, the experience has been mixed. Infrastructure services are a quasi-public good. It is not easy to balance the interests of the general public that expects to have access to affordableelectricity and transport facilities with the profit motive of private developers.

The nature of these services is such that it requires the return to investors to be regulated in the broader public interest. This is not easy to do. Private-public partnerships, or PPPs, require sophistication in design and effective dispute resolution. In retrospect, India's experience in this area has been a case of too much too soon.

Over the past three years, confidence has taken a beating and private infrastructure development has been set back by a combination of regulatory uncertainty, bureaucratic delay, and allegations of corruption. Investment in infrastructure has fallen drastically. But India still needs an additional $1 trillion in infrastructure investment over the next five years. Unless remedial action is taken, this will remain elusive. Before the next wave of infrastructure asset creation can be launched, we must learn from the lessons of the past.

First, land acquisition for project development has been much harder than anticipated and exacerbated by the previous government's thoroughly over-engineered and complex legislation, the Land Acquisition Bill, 2013. Difficulties with land aggregation hit road development projects particularly hard. Under pressure from government to show progress, banks funded projects well before all the land was made available by the concessioning authority. As the land could not be delivered in the promised time, projects suffered delays, leading to cost overruns that in turn made half-completed projects unviable.

Second, the sluggish and unpredictable pace of regulatory approvals, especially environmental clearances, similarly contributed to project-cost escalation.

Third, in view of these execution risks, private developers took to gaming bids. Gold-plating of project costs was widely used by developers to take out their equity through means other than project cash flows.

Fourth, the government did not deliver on many promises. The most important example of this is the delivery of coal. About 40,000 Mw of generating capacity has already been built or is currently under construction on the promise that Coal India would deliver enough coal to have these plants operate at a Plant Load Factor (PLF) of 85 per cent. Coal India has fallen short of these targets, as a result of which many plants have either become unviable or are operating at capacity utilisation levels too low to service their long-term debt.

Fifth, the theory that competitive bidding is the best mechanism for allocating contracts because they lead to objective price discovery has been belied by the Indian experience. Bidding procedures have been poorly designed and subject to manipulation. Bidders have also bid irresponsibly. This has led to a backlog of dysfunctional bids particularly in the power sector where electricity generation contracts were bid on the basis of the lowest quoted tariff. These projects have become unviable and are stuck in litigation between state-level regulators who insist that the terms of the original contract be adhered to, and private developers who are invoking the force majeure clause to change the contract in view of circumstances beyond their control.

Sixth, the judiciary's efforts to intervene in this mess have been quite draconian. The cancellation of telecommunication licences and coal mines allocated to private parties with retrospective effect may have been technically justified in a legal sense, but have caused major dislocation and damage to investor sentiment in the infrastructure space.

Seventh, a combination of skill gaps, lack of discipline and moral suasion from government has led to irresponsible funding by banks. This had added to the burden of non-performing assets that is weighing down the balance sheet of the banking system.

Finally, a disproportionate burden of funding infrastructure has fallen to the banking system that is not structurally equipped, from a risk management perspective, to provide long-term financing of the type needed by infrastructure projects.

The reality is that although the private sector played a significant part in the recent boom in infrastructure spending, it is the government that will have to lead the next wave of asset creation in this sector. But the government's own fiscal resources remain scarce. So how might it be possible to get a resource-constrained government to lead the recovery in infrastructure investment?

Our recommendation is to turn the orthodox PPP model on its head. Instead of getting the private sector to build, own, operate, and then transfer the asset to government - in other words, to take the cost and high risk of green-field construction on to itself and then transfer an operating asset to government - our recommendation is to reverse the process. The government or a public sector entity should take on the cost and risk of green field construction. It should then sell down the project to private investors once the asset is generating operating cash flows.

In so doing not only would the allocation of risk be more appropriate between public and private stakeholders, the public sector would also easily make a profit from its sale to the private sector. This is because the public sector is much better equipped and supported to tackle the challenges of land aggregation and obstacle course of regulatory approvals involved in green field construction, and the discount rate applied to post-construction risk is materially lower than that applied to construction risk. There are numerous foreign investors with deep pockets that would be willing to come into the Indian market to own, operate and manage infrastructure assets of scale provided they do not have to take the risk of constructing these projects. Pension funds looking for predictable, but not very high returns the world over have become important owners of operating assets such as power plants and toll roads. As the operational assets are transferred to such investors, the initial equity invested by government for construction would be returned at a profit, allowing the government to more than recover the fiscal cost of building the asset.

But who in government would be equipped to take on the responsibility for building new infrastructure assets in this manner? In the power sector the obvious candidate is NTPC, which is extremely well qualified to build new generating capacity. In fact, NTPC could easily create a world- class EPC (engineering and project construction) company that would be focussed on building new power generating plants with the goal of selling the same down to private investors once they are built.

In the road sector, NHAI may not have the skills to build its own EPC company, but it could use (and has done so in the past) private EPC contractors to build new highways and expressways, while carrying the equity on its own books, but with the goal of selling these down to private investors once they are operational. Using this reverse BOT approach we believe that it is eminently feasible to build about $60 billion worth of new power and road infrastructure projects every four to five years, selling them down to private investors once operational and redeploying the proceeds into the next wave of asset creation.

Why govt wants a unified gas allocation policy

It will eliminate several anomalies in the current guidelines and redraw the priority list

Among the tasks the Narendra Modi government has taken up is the complete overhaul of the policy framework for the allocation and utilisation of domestically-produced natural gas. The implications are huge and spread across multiple sectors including power, fertiliser, petrochemicals, transport and even atomic energy and space research.

The ministry of petroleum and natural gas last week moved a note detailing the changes for approval by the Cabinet Committee on Economic Affairs. The ministry has proposed to give top priority to those who sell compressed natural gas (CNG) for transport and piped natural gas (PNG) to households. Second in the new priority list are plants that provide inputs to atomic energy and space research. They are followed by hydrocarbons, including petrochemicals, urea plants and power plants, provided they sell the entire electricity at regulated tariff. At present, urea factories are on top of the pecking order, followed by liquefied petroleum gas (LPG) plants, power stations and city gas distributors who sellCNG and PNG.

CHANGING PRIORITIES

EXISTING LIST Urea manufacturing fertiliser plants LPG plants Power plants City gas distribution PROPOSED LIST City gas distribution Strategic sectors Petrochemical and LPG plants Urea plants Power plants

The new gas allocation policy would eliminate multiple anomalies and correct many imperfections in the current policy of allocation. Natural gas available in India is divided into two categories: domestic and imported. Imported gas is unregulated: marketers are free to purchase and sell it as they like. The challenge is with domestic gas. It falls under four distinct sets of rules: those under the administered price mechanism (APM), non-APM, pre-New Exploration Licensing Policy (NELP) and NELP. Each category of gas is allocated under different gas utilisation policies. Though the policies have almost similar order of priority, there are many ambiguities and anomalies, justifying the need for a uniform policy.

The new order
As a first step, the new government issued the new natural gas pricing guidelines on October 25, 2014, raising the price from the existing $4.2 per unit to $5.6 per unit for all categories. Two, under the current policy, APM gas is allocated to a few strategically important plants in preference to other sectors. However, the current utilisation policy for non-APM and NELP gas does not provide any such priority. The oil ministry has already received requests for allocation of small quantities of gas for plants supplying essential inputs to strategic sectors. Hence, the need to accord higher priority to atomic energy and space research.

There is ambiguity regarding extraction of higher fractions in the current utilisation policy. During its exploitation, natural gas is broken down into multiple fractions each of which is processed into a specific product. Higher fractions of gas emerge first during the production process and are wasted if not used. These fractions can be used only by petrochemical and LPG plants but they fall in the lower order of priority in the current policy. Since the higher fractions are of no use for sectors other than petrochemical and LPG, they cannot be utilised if the hydrocarbons are not extracted.

In the case of the fertiliser sector, an Empowered Group of Ministers (EGoM) had last year accorded highest priority to existing gas-based urea plants for allocation of NELP gas. However, in the non-APM gas utilisation policy, highest priority has been accorded to all gas-based fertiliser plants. Moreover, the EGoM decided to "maintain at 31.5 million standard cubic meters per day (mmscmd) the level of supplies of domestic gas to fertiliser sector". While agriculture expansion in the coming years would increase the demand for fertilisers, the 31.5 mmscmd cap would mean higher imports for the sector, leading to higher fertiliser subsidy.

Expansion of the city gas network through replacement of liquid fuels (diesel and LPG) by CNG andPNG is not viable on imported liquefied natural gas. But CNG and PNG are cleaner, safer, cheaper and more convenient than liquid fuels. Also, the replacement of liquid fuels by CNG and PNG will result in savings on foreign exchange through reduction in crude oil imports. Moreover, the Supreme Court in a 2002 judgment had directed the government to give priority to transport sector with regard to allocation of CNG.

Since gas supplies to CNG and PNG have lower priority under the current guidelines, a situation arose where some city gas distributors were receiving 100 per cent supplies, while others were receiving nil. This was challenged in the Gujarat High Court which ordered the allotment of gas to Ahmedabad at the same rate as Delhi and Mumbai. Cuts were imposed on supplies to non-priority sectors in order to implement this directive.

Finally, according to the APM gas policy, in case of reduction in availability of such gas, supplies to customers should be reduced on a pro-rate basis. In case of NELP gas, reverse priority cut order is applicable with reduction in supply of KG-D6 gas. The non-APM gas policy is altogether silent on the mechanism that would be adopted in case of reduction in supply. There is need for uniformity, which the new guidelines seek to bring in.

Step in the right direction
Experts say the new priority order and the overhaul of the gas utilisation policy appears to be a step in the right direction. "It makes sense because of multiple reasons," says India Ratings Director Salil Garg. "As no new urea plant is coming up right now, CNG and PNG must be promoted because they are cleaner fuels. PNG through the city gas route replaces LPG and thus does not carry the burden of subsidy. And the demand from strategically important sectors may not be huge but must be given priority." Garg adds that the power sector is suffering because of investment in new capacities without firm allocation and the decline in gas production from allocated sources, not because of its placement on the priority order.