Development of #CoalBed Methane

Development of Coal Bed Methane

The Minister of State (I/C) for Petroleum & Natural Gas Shri Dharmendra Pradhan informed the Lok Sabha in a written reply today that the Government has taken steps to explore and exploit Coal Bed Methane (CBM), Shale Gas and Gas Hydrates. For Underground Coal Gasification (UCG), the policy has not been finalized by Ministry of Coal.

In order to harness CBM potential in the country, the Government of India has awarded 33 CBM blocks under 4 rounds of CBM bidding and on nomination basis. Total prognosticated CBM resources for 33 awarded blocks is about 63.3 TCF (1792.43 BCM) of which so far, 9.9 TCF (280.8 BCM) has been established as Gas – In – Place (GIP). As on date, 8 CBM blocks have entered the Development Phase, 5 blocks are in exploration phase and for 4 CBM blocks grant of PEL from the respective State Government is awaited. 16 CBM blocks have been relinquished or are under relinquishment.

The Government has, on 14.10.2013, notified the policy guidelines for exploration and exploitation of shale gas and oil by National Oil Companies (NOCs) in their onland PEL(Petroleum Exploration Lease) /PML (Petroleum Mining Lease) blocks awarded under the nomination regimes. Under the first phase of assessment (3 years) 55 PEL/PML blocks (ONGC 50, and OIL – 5) have been awarded to NOCs. These blocks are located in the states of Assam (6 blocks), Arunachal Pradesh (1 block), Gujarat (28 blocks), Rajasthan (1 block), Andhra Pradesh (10 blocks) and Tamil Nadu (9 blocks). ONGC has drilled one well and spudded another well in Cambay Basin, Gujarat for assessment of shale gas/shale oil potential where coring has been completed. In addition, ONGC has collected cores from another 8 wells.

The National Gas Hydrate Programme (NGHP) was formulated by MoP&NG in 2000. The first NGHP Expedition – 01 was launched 2006, wherein coring was done at 21 sites in Western, Eastern and Andaman offshore areas to obtain information on presence of Gas Hydrates. The data so collected has established Gas Hydrates deposits in KG, Mahanadi and Andaman offshore areas.

NGHP Expedition – 02 is in progress wherein 40 wells shall be drilled/cored in KG and Mahanadi offshore areas to obtain information on sand prone Gas Hydrates. As on 31.03.2015, Logging while drilling (LWD)/ Measuring while drilling (MWD) operations have been completed in 12 wells.

A Multi Organizational Team (MOT) of DGH, ONGC, OIL, GAIL was formed by MoPNG to analyse the existing data set and suggest methodology for Shale Gas development in India.

Based on scrutiny of geo-scientific data, MOT has identified six prospective basins namely, Cambay, Krishna-Godavari onland, Cauvery onland, Assam-Arakan and Indo-Gangetic for assessment of Shale Gas potential. ONGC and OIL are presently permitted to carry out Shale Gas and Oil exploration and exploitation activities in the PEL/PML areas awarded under nomination regime.

The Shale Gas/Oil data generated by ONGC and OIL is reviewed by DGH and maintained by the National Oil companies.

Various agencies have estimated the shale gas and oil resource potential in selected sedimentary basins/ sub basins in India. The details are as under:

i.        M/s Schlumberger: 300 to 2100 tcf of shale gas in the    country (as available in public domain);

ii.       Energy Information Administration (EIA), USA in 2011: 290 tcf of shale gas in four basins namely, Cambay, KG, Cauvery and Damodar;

iii.      United States Geological Survey (USGS) in Jan’12: 6.1 tcf of technically recoverable shale gas in 3 basins, namely, Cambay, KG & Cauvery.

iv.      EIA, USA in 2013: 584 tcf of shale gas and 87 Billion barrel of shale oil in 4 basins namely, Cambay, KG, Cauvery and Damodar;

v.       ONGC in 2013: 187.5 tcf of shale gas in 5 basins namely, Cambay, KG, Cauvery, Ganga & Assam and Assam – Arakan;

vi.      Central Mine Planning and Design Institute (CMPDI) in Jul’13: 45 tcf of Shale Gas in Gondwana basin;

             The policy guidelines for exploration and exploitation of Shale Gas and Oil by National Oil Companies (ONGC and OIL) in their onland Petroleum Exploration License (PEL) / Petroleum Mining Lease (PML) areas awarded under the nomination regimes, was issued on 13^th October, 2013. As per the policy, ONGC and OIL will undertake a mandatory minimum work programme in a fixed time frame for shale gas and oil exploration and exploitation. Under the first phase of assessment (3 years) 55 PEL/PML areas (ONGC 50, and OIL – 5) have been awarded to NOCs.

Steps taken by the Government to increase Tourist Arrivals into the country

As per the 2nd Tourism Satellite Account of India (TSA) 2009-10 and subsequent estimation, the contribution of tourism to total Gross Domestic Product (GDP) during the years 2011-12 and 2012-13 were 6.76% and 6.88% respectively.

The steps taken by the Ministry of Tourism to increase the arrival of tourists to India are:-

(1) Launch of Tourist e-Visa for citizens of 44 countries.

(2) Promotion of the destination through the Incredible India Campaign across the globe.

(3) Participation in major International Tourism & Travel Fairs & Exhibitions.

(4) Organising Road Shows to promote tourism destinations and products of country in major tourist source markets in collaboration with stake holders.

(5) Development and promotion “Niche Tourism” products.

(6) Creating an increased pool of trained man power in Hospitality & Tourism sectors for delivery of quality service to the tourist.

(7) Organising International Buddhist Conclave once in 2 years to show case the Buddhist Heritage and International Tourism Mart for showcasing the tourism potential of North East being held every year.

Who's afraid of capital convertibility?

The issue of a completely open capital account, or full capital convertibility, saw a significant change in perspectives and positions after the financial crisis of 2008. Up until the crisis, the predominant global view on this issue, perhaps best reflected in the institutional stance of the International Monetary Fund (IMF), was that more convertibility and a floating exchange rate were unambiguously good. All economies should move towards this objective, though they must be mindful of the macroeconomic, institutional and regulatory context in which it work to the economy's advantage.

However, after the crisis, the perspective changed. It shifted from focusing on the efficiency gains to highlighting the risks. The IMF played a significant role in this transition, raising questions about the merits of unconditional and absolute convertibility. Massive volatility in capital flows and, consequently, in exchange rates could have significant and persistent impacts on the domestic economy in both the financial and the real sectors. A more pragmatic view on the convertibility issue would suggest that in such situations, governments and central banks must consider the use of some form of controls and market interventions to gain control over a potentially spiralling situation.

In other words, while the efficiency gains from convertibility may swing the argument under normal circumstances, the risks come to the forefront, particularly in countries in which an underdeveloped ecosystem does not provide adequate buffers to protect stakeholders against extreme volatility. If one is to characterise the current state of the debate, it would be in terms of this pragmatism. Don't lock yourself into positions that might cost you heavily in turbulent times. Always retain the capacity and instruments to protect domestic stakeholders from extreme volatility. And make sure that both domestic and foreign stakeholders know this and believe it.

India has moved steadily down the path towards full convertibility. In the pre-crisis paradigm, it was often criticised for being too slow and cautious. However, with the paradigm itself changing, there really isn't a clear benchmark to assess where India's, or for that matter, any country's capital account management framework stands currently. Both theory and practice in this domain are in a state of evolution, as reflected in the essays in a recent book* co-edited by Bruno Carrasco, Hiranya Mukhopadhyay and myself.

Theoretical developments are taking the debate in the direction of identifying capital account management instruments and time frames for their use that will most effectively deal with different sources of capital account and exchange rate turbulence. Practical perspectives, coming from central bankers who were directly involved in managing external turbulence, provide insights from the experiences of different countries about how specific instruments were used in different situations and how effective they were.

One might have thought that the pragmatic middle ground was now the dominant position in the debate and that research efforts were focused on refining the understanding on what kind of controls might work when and why and, very importantly, what will not work and why. Going by this yardstick, the Indian regime appears to be an eminently sensible one. There is a broad acceptance of the benefits of free capital movements. There is also an understanding of the different level of risks that different kinds of capital flows pose. Exchange rate flexibility is also part of the framework, but within certain boundaries. And the willingness to step in with a variety of interventions, both market-based and administrative, in order to deal with extreme volatility has been demonstrated.

Against this backdrop, the recent statements emanating from both the finance ministry and the Reserve Bank of India (RBI) about the aspiration to move towards full convertibility are significant. Equally significant are the apparently contradictory messages from the central bank, highlighting the risks intrinsic to a more open capital account. Based on the background provided above, I think that the debate has shifted from "more open versus less open", which was essentially a pre-crisis formulation, to "matching vulnerabilities with toolkits", which is the tagline for the post-crisis pragmatism.

From this perspective, I would argue that a constructive debate on the appropriate capital account management framework for India needs to address three major issues, each of which involves trade-offs. First, should all inflows be made completely free? Currently, there are restrictions, mostly in the form of limits on amounts invested by foreign investors in government and corporate bonds. These limits have been steadily raised, but caps remain. That outflows of debt investments can be destabilising was demonstrated in the 2013 episode. But if domestic market conditions for these securities are appropriately structured, foreign investments can contribute to increasing depth and efficiency. The policy objective here should be to create domestic market conditions that will minimise the potentially destabilising effects of foreign investment. We need to figure out if such conditions exist and can realistically be created; if not, some prudence, in the form of caps, may continue to be justified.

Second, intervention by the RBI in the currency market achieves multiple objectives, but they are not necessarily aligned. Is it being done for the purposes of reserve accumulation, which then provides a bigger buffer against external shocks? An unobjectionable motive, but in the process, the RBI shoulders the responsibility of containing exchange rate risks, thus absolving other, particularly private, stakeholders from mitigating them. The critical question is: how is exchange rate risk most efficiently managed? Do market-traded hedging products offer the best prospect, in which case the policy focus needs to be on rapidly developing these options and ensuring that they are being used for purposes of risk mitigation. Or, all things considered, is there a public good aspect to exchange rate risk, which justifies a major role for the central bank in the process?

Third, in episodes of high turbulence, what is the right sequence of intervention and where should the process stop? On the one hand, there are enormous reputation risks for the policy establishment if an attempted defence of the currency should fail. On the other, there are equal risks associated with not trying at all. Further, there are longer-term consequences of steps taken during the management of a crisis. Obligations taken will have to be met some time and risks may be pushed from one part of the system to another, manifesting much later.

The short point is that a debate on convertibility in the current context needs to be exploring answers to questions such as these.

A mix of old and new:NITI Aayog

The NITI Aayog will surely continue to both formulate plans and engage with the states

The Planning Commission has been abolished. A new body in its place has been set up - the National Institution for Transforming India (NITI) Aayog. Fresh responsibilities, too, have been outlined for the NITI Aayog, indicating what kind of role it could play in the coming months. But more significant and revealing are the details in the Expenditure Budget for 2015-16 that show the government's financial allocations for the NITI Aayog.

First, it would be interesting to take a look at the new set of responsibilities for the NITI Aayog. The overall task of setting national development priorities with the active involvement of states has been entrusted to the new body. It is expected to foster cooperative federalism and prepare credible plans at the village level and aggregate them progressively at higher levels of the government. There is also a hint that the new body would provide support to the government through its advice and research work and even build itself to be a think tank.

All this might appear a little vague. But what could provide some clarity are the two words that have been used by the government in articulating the new responsibilities of the NITI Aayog. And these are: Plan and states. What this means is that whatever else the NITI Aayog may be doing, it surely will continue to both formulate plans and engage with the states. What these plans would be and what the nature of engagement with states would be are issues that the NITI Aayog will have to work out. Similarly, the government will have to decide if it would permit the NITI Aayog to determine the allocation of central resources to states or act as a forum of discussion of Centre-state issues.

It, therefore, appears that the NITI Aayog will not be completely different from what its predecessor was. There are other indications as well that support such an assessment. For instance, even though the Planning Commission has been abolished, the planning ministry continues to remain in existence. You might wonder what the need for a planning ministry would be when the government has bid goodbye to the planning era. And an even more important question: What role would a full-fledged minister for planning play when there is no Planning Commission?

Probably, restructuring institutions are easier than reforming the council of ministers. One possible reason for retaining the planning minister could be to have a person who could be present in Parliament to address questions and issues concerning the NITI Aayog. If that is the only reason for having a planning minister, then why not have the prime minister, who is the chairman of the NITI Aayog, or a minister of state in the Prime Minister's Office to do that job in Parliament? Or has planning not been completely abandoned?

Controversies have also surfaced over the status of the vice-chairman and members of the NITI Aayog. It appears even as its vice-chairman will enjoy the rank of the Cabinet minister, his pay and perquisites will be equivalent only to those offered to a Cabinet secretary. Likewise, its members will enjoy the rank of a minister of state but their salaries will be the same paid to a secretary in the Union government. What does it mean for the NITI Aayog vice-chairman's status as a permanent invitee to the Cabinet meetings? Remember that the deputy chairman of the Planning Commission was an invitee to all such Cabinet meetings.

Equally interesting is the financial outlay for the NITI Aayog's secretariat for this year, estimated at Rs 52 lakh, compared to Rs 42 lakh spent on the secretariat of the Planning Commission in 2014-15 and Rs 25 lakh in 2013-14. The overall expenditure on the NITI Aayog for this year would be around Rs 88 crore, compared to Rs 93 crore in 2014-15 and Rs 78 crore in 2013-14. So, what is going on about institutional reform? And where are the financial savings that the creation of a leaner body like the NITI Aayog was to have generated?

The government has of course saved some money by doing away with the Independent Evaluation Office that was set up in 2011-12 to assess the effectiveness of the government's flagship development programmes. Have the flagship programmes too been wound up? Not really, even though the funding pattern for some of them has changed and the states have been asked to cough up more on financing some of them. So, who will evaluate these programmes?

In short, whatever role the government may want the NITI Aayog to play, it should articulate it more clearly. Equally important, there is an urgent need for some reforms of the council of ministers and the rules of business framed by the government for the NITI Aayog.

‪#‎PrimeMinister‬ to confer awards in public administration on ‪#‎CivilServicesDay‬

Prime Minister to confer awards in public administration on Civil Services Day

The Prime Minister, Shri Narendra Modi will confer the `Prime Minister’s Awards for Excellence in Public Administration’ for the years 2012–13 and 2013-14 to outstanding initiatives in Public Administration on the Ninth Civil Services Day which is being held here on April 21, 2015. To mark the Day, a two-day programme organised by the Department of Administrative Reforms and Public Grievances, begins on April 20, 2015 (AN).

A number of outstanding initiatives in Public Administration in three categories – Individual, Team and Organisation - have been selected for the award for the year 2012-13 and 2013-14, from across the country. Under this scheme of awards all officers of Central and State governments, individually or as a Team or as an Organisation, are eligible. The award includes a medal, scroll and a cash amount of Rs.1 lakh. In case of a team, the total award money is Rs.5 lakh subject to a maximum of Rs.1 lakh per person. For an organisation, this is limited to Rs. 5 lakh.

Unlike previous years, the Civil Services Day which is being held on two days this year, focuses on ‘Minimum Government, Maximum Governance’ with specific sectoral emphasis on Social Sector, Housing, Employment & Skill Development and Agriculture. The related sessions would be chaired by senior Union Ministers viz. the Union Minister of Raiways, Shri Suresh Prabhu, Minister for Skill Development, Entrepreneurship & Parliamentary Affairs, Shri Rajiv Pratap Rudy, Union Minister for Human Resource Development, Smt. Smriti Zubin Irani and other dignitaries Vice Chairman, NITI Ayog, Dr. Arvind Panagariya and the Professor from Indian Council for Research on International Economic Relations, Dr. Ashok Gulati. A number of eminent speakers in the respective fields are expected to deliberate on these issues of contemporary relevance and seek to address the challenges before the Civil Services in India and re-inventing government for efficient service delivery.

During the event, a book on ‘Best Practices – Tomorrow is Here’ will also be released by the Prime Minister on April 21, 2015.

This Day is being observed by all Civil Services to rededicate and recommit themselves to the cause of the people, since 2006. It provides a unique opportunity for introspection as also for working out future strategies to deal with the challenges being posed by the ever changing times. 

#UPSCIAS (Mains) revised preference forms: Important instructions

#UPSCIAS (Mains) revised preference forms: Important instructions

The candidates should note the following instructions/guidelines for filling up of revised service preferences in the application form:

The candidates who have qualified the Civil Services (Main) Examination, 2014 shall be required to mandatorily indicate revised order of preferences only for those services participating in the said Examination for which they are interested to be allocated to and such revised order of preferences shall be in supersession of the earlier order of preferences filled by the candidates in their detailed application form;

In case of recommendation of their name by UPSC, the candidates shall be considered for allocation to one of those services by the Government for which they shall indicate revised order of preference subject to fulfilment of other conditions;

The candidates should note that they would not be considered for allocation to the service for which they would not indicate any preference;

The candidates would be required to fill up and submit their revised service preferences online in the following manner:

The candidates will be mandatorily required to fill up their revised service preferences during the period April 20 and April 27

The candidates will be required to register on Commission's website using their roll number to get a new password, which would be forwarded to their e-mail registered with the Commission

The candidates will have to login with their user ID (Roll No.) and the password which will be sent through email and fill up the revised preferences in order of preference say 01, 02 and 03 etc

The candidates can give preference for as many services as they desire

In case of the service/services, which they do not want to opt for, they will have to mark '99' against such service/services

A printout of the revised preferences duly signed by the candidates concerned will also have to be handed over by the candidates to the officers concerned of the commission at the time of their personality test

One bill to rule them all

Tax" has always been a dirty word. It is dirty for the people who pay, who evade and who collect. Those who pay, don't really want to pay but do so either out of compulsion or perhaps because they don't have the option to evade. They are never really given due recognition despite being the venerated four per cent who pay taxes for the remaining 96 per cent of Indians. Those who evade also have their reasons - e.g. high tax rates or justification of the logic "most don't pay, so why should I?" The collectors are a demoralised lot; professionally, they never meet their performance goals and personally, they are looked upon suspiciously and only respected out of fear. So, no one is really happy.

A more friendly, transparent and intelligent tax ecosystem could be implemented. That ecosystem should aim to give a seamless experience to tax payers and create an amiable relationship between a genuine taxpayer and taxmen.

Four programmes of the Government of India - Digital India,Jan Dhan Yojana (JDY), GST implementation and Bharat Bill Payment System (BBPS) - weaved together, have the potential to create such an ecosystem. It can curb generation and enable recovery of black money and increase the government's revenues significantly to support the broader objective of Bharat Nirman. More importantly, a system that incentivises volitional tax-paying behaviour is likely to be more effective in broadening the tax base than creating policies inclined to beat up tax evaders.

First, India can be the first country ever to adopt a "One Bill" policy. It means that all financial transactions across India for trade of goods and services, no matter how small, is billed through one universal billing system. Today's technology maturity can make this happen. It should be internet-based, made ubiquitous through mobile smartphones and can be hosted on a cloud platform. Every transaction will require PAN/TIN numbers of the buyer and seller. The transacted amount and GST paid will flow into the 26AS statement for individuals and an equivalent statement for companies. There will be no need for paper invoices.

Such a system will provide every seller of goods and services a credible, easy-to-use, universal and cutting-edge invoicing system, bring all financial transactions in the white economy, discourage under-invoicing and over-invoicing, ensure transparent accounting of tax collected and deposited and eliminate "kachcha" bills. Taxmen, on the other hand, will have a platform to detect evasion accurately and perform surgical enforcement operations with undisputed data. Most importantly, this can bring the black economy into the tax net.

The success of this system is based on the principle of a backward propagation of pressure in which the end-consumer will forcibly drive sellers of goods and services to declare their actual revenues and deposit tax collected from them instead of making windfall profit from it. Volitional adoption will be key to success - i.e. the more people insist that sellers give bills, the more the white economy will grow. Consumer awareness campaigns have been trying to educate people but have not been effective.

Encouraging people to adopt this system is the answer. The government must reward the taxpayer for generating more white money. If people are allowed to reduce their taxable income by a percentage of GST that they pay for purchase of goods and services over and above income tax, it will incentivise everyone to demand bills from sellers. Unbilled transactions, a major contributor to the shadow economy, will reduce. Sellers who continue to operate in black will be eventually eliminated by market forces.

There is no dispute that the shadow economy is big; estimates vary between 22 per cent and 30 per cent of the GDP based on Friedrich Schneider's report of The Institute of Economic Affairs and Indian think tanks. That is a whopping Rs 25 to 34 lakh crore. If the government fixes the GST rate at 20 per cent, every one per cent reduction of the shadow economy will bring Rs 16,000-22,000 crore additional revenue receipts per year! Considering the US and UK black economy at eight per cent and 12 per cent of GDP respectively, if India can bring its own down to 10 per cent, an additional Rs 2-4.5 lakh crore will accrue to the exchequer every year. This can double the current planned expenditure of the government.

The One Bill system can be implemented as an extended module of the BBPS, which is currently under implementation but with a much higher degree of artificial intelligence, technology power and integration with the income tax system. One Bill will be the universal billing system and BBPS the universal payment gateway. The benefits of building such a system would far outweigh the investment required for it.

Three other supporting initiatives will further help the cause. First, elimination of Rs 1000, Rs 500 notes and having fewer Rs 100 notes in circulation. With the success of JDY and the direct cash transfer mechanism, a large population now has a bank account and we have a proven system that enables direct transfers. We really don't need a big cash economy.

Second, the velocity of adoption will increase if the government fixes a high rate of GST. Although it will artificially inflate the price of every commodity, this can be used as a mechanism to make transactions in black prohibitively expensive. Imagine, getting a refund of a part of the GST amount credited to your account the moment you complete the transaction in white!

Third, the IT department must show every tax payer the mirror of their income, spending and taxes paid. Doing so will improve the IT department's image as a transparent enforcement body and will also put pressure on individuals to pay taxes on time. If everyone finds a simple monthly statement of total income, total tax paid and total expenditure from their IT department, more people will comply and pay taxes on time.

Let us accept that it is grossly unfair to tax four per cent of the population, which contributes about 16 per cent of total government tax revenue. If India can double the tax-paying population and reduce the shadow economy, leveraging technology under the ambit of Digital India, it is possible to dramatically cut the budget deficit, in which case, it is time to give the real Indian taxpayers money back in their pockets. The FM should provide a roadmap for drastically reducing income tax rates, similar to what he has done for corporates this year.