decision on Marketing including Pricing freedom for the gas to be produced from Discoveries in High Pressure-High Temperature, Deepwater and Ultra Deepwater Areas

decision on Marketing including Pricing freedom for the gas to be produced from Discoveries in High Pressure-High Temperature, Deepwater and Ultra Deepwater Areas

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approveda proposal to grant marketing including pricing freedom for the gas produced from High Pressure High Temperature, Deepwater and Ultra Deepwater areas. The marketing freedom so granted would be capped by a ceiling price arrived at on the basis of landed price of alternative fuels.

The policy guidelines would be applicable to future discoveries as well as existing discoveries which are yet to commence commercial production as on 1.1.2016. However, in case of existing discoveries which are yet to commence commercial production as on 1.1.2016, if there is pending arbitration or litigation filed by the contractors directly pertaining to gas pricing covering such fields, this policy guideline shall be made applicable only on the conclusion/ withdrawal of such litigation/ arbitration and the attendant legal proceedings. All gas fields currently under production will continue to be governed by the pricing regime which is currently applicable to them.

The ceiling price in US $ per mmbtu (GCV) shall be the, lowest of the (i) Fuel oil import landed price (ii) Weighted average import landed price of substitute fuels (0.3 x price of coal + 0.4 x price of fuel oil + 0.3 x price of naphtha) and (iii) LNG import landed price, whichever is lower.

The landed price-based ceiling will be calculated once in six months and applied prospectively for the next six months. The price data used for calculation of ceiling price in US $ per mmbtu (GCV) shall be the trailing four quarters data with one quarter lag. Director General of Petroleum Planning and Analysis Cell (DG, PPAC) under the Ministry of Petroleum and Natural Gas will notify the periodic revision of gas price ceiling under these guidelines.

Production Enhancement: 

The decision is expected to improve the viability of some of the discoveries already made in such areas and also would lead to monetization of future discoveries as well. The reserves which are expected to get monetized are of the order of 6.75 tcf or 190 BCM or around 35 mmscmd considering a production profile of 15 years. The associated reserves are valued at 28.35 Billion USD (1,80,000 Crore) The country’s present gas production is around 90 mmscmd. Besides, these there are around 10 discoveries which have been notified and whose potential is yet to be established.

Employment Generation: 

The decision is expected to result into monetization of the 28 discoveries mentioned above which can result into substantial investment by the contractors.

There would be substantial employment generated during the development phase of these discoveries and a part of it would continue during the production.

ONGC has estimated that in the development of discoveries in the block KG-DWN-98/2, there would be deployment of 3850 direct skilled labours. Besides, these there would be around 20,000 persons required during the construction phase. GSPC presently in the block KG-OSN-2001/3 is deploying around 690 personnel in the block.

Transparency and Minimum Government and Maximum Governance:

Government will not interfere in the price fixation for every block covered under the policy.

Provision of ceiling to balance the requirements of consuming sectors

Incentivize upstream investment and not getting into unnecessary details. 

South Asia Regional Training and Technical Assistance Center in India by the International Monetary Fund

Memorandum of Understanding between India and International Monetary Fund for setting up of South Asia Regional Training and Technical Assistance Center in India by the International Monetary Fund

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for entering into the Memorandum of Understanding (MoU) between India and International Monetary Fund (IMF) for setting up of South Asia Regional Training and Technical Assistance Center (SARTTAC) in India by the IMF. It also authorised the Finance Minister to approve related decisions in respect of India’s contribution for setting up of the centre, including Letter of Understanding for financial contribution by India, site of the SARTTAC, representative of India on the Steering Committee on SARTTAC, etc.

The SARTTAC will be a collaborative venture between the IMF, the member countries that is Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka and development partners for supporting the capacity development needs of the members. Additional member countries could join SARTTAC at a later stage. SARTTAC will also selectively cater to the capacity building needs at the State level, especially in India.

The IMF is organising a Regional Conference on ‘Advancing Asia: Investing for the Future’ in New Delhi. The MoU may be entered into during this Conference.

The MoU will help in capacity building of Government officials including state level in macro, fiscal, monetary policies by the IMF and greater coordination between the six member countries of South Asia.

Capacity development at Central and State level in fiscal and financial policies will enhance revenue mobilization and development of policies aimed at more effective public and financial management. This will result in economic development and inclusive growth in the country.

Capacity development by the IMF will bring in the best practices from across the globe, as well as the South Asian region, resulting in innovative solutions to fiscal, monetary and financial issues and effective response through use of IT and innovative techniques. 

Removal of the minimum capacity utilization criteria for SSP Manufacturing Units to be eligible for subsidy under Nutrient Based Subsidy (NBS) Scheme.

Removal of the minimum capacity utilization criteria for SSP Manufacturing Units to be eligible for subsidy under Nutrient Based Subsidy (NBS) Scheme.

In order to push major policy reforms in the fertilizer sector, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi today approved the proposal for removing the minimum capacity utilization criteria for the Single Super Phosphate (SSP) units to be eligible for the subsidy under the Nutrient Based Subsidy (NBS) Scheme with immediate effect.

This is in continuation of other policy reforms made recently which include New Urea Policy, 2015 and Gas Pooling for urea production. Due to the emphasis on promoting energy efficiency and rationalisation of gas pricing mechanism, highest ever urea production in the period so far has been achieved this year. It is expected that there will be an additional production of 17 lakh MT of urea this year as compared to last year. Moreover, to prevent diversion to non-agricultural use and to enhance productivity, 100% of urea is now neem coated.

Further, policy on promotion of City Compost is a major initiative which aims at the twin objectives of making cities cleaner and utilizing the city garbage as compost for improving soil health. Under this policy, for the first time market development assistance of Rs.1500 per MT will be provided to scale up production and consumption of the product.

SSP is a phosphatic multi-nutrient fertilizer, which contains 16% phosphate, 11% sulphur, 16% calcium and some other essential micro-nutrients. Because of the simple production technique, it is one of the cheapest chemical fertilizer available. It is more suited for crops like oilseeds, pulses, horticulture, vegetables, sugarcane, etc.

From 01.10.2009, it was made mandatory for the SSP units to utilize minimum 50% of their recognised production capacity or to produce 40000 MT, whichever is less, per year to become eligible for subsidy. There was some capacity addition in the beginning, but for the last four years the production and consumption of SSP in the country has remained more or less stagnant.

Due to this minimum capacity utilization criteria, large number of small SSP units which failed to reach this level were not able to avail of subsidy, in spite of having passed the subsidy benefit to the farmer in the form of lower MRP. Many units because of this apprehension, did not commence production. Non eligibility to receive subsidy created financial problems including working capital issues for the SSP units, which also resulted in loss of capacity. The new units were also finding it difficult to achieve this production criteria as reasonable time is required to establish their brand name and to increase the market share due to inadequate availability of dealers’ network. Further, this minimum production criteria was applicable only to SSP and not to other P&K fertilizers.

This new policy to remove the minimum capacity utilization criterion would put the SSP units on the same footing as other fertilizers and they would be eligible for subsidy irrespective of quantity of SSP produced and sold for agriculture purposes.

This new policy will help revive smaller SSP units and encourage new SSP units to come up in the country to further boost indigenous production of SSP. It would also provide freedom to the SSP manufacturers to plan their production as per the market dynamics. SSP is also considered as a substitute to DAP, which is largely import based. Growth of SSP industry will not only increase domestic production of phosphatic fertilizers in the country but also its consumption and partly act as a substitute for more costly DAP.

This would also encourage the evolution of a robust mixed fertilizer market with diversified micro-nutrients to promote balanced fertilization of the soil. 

Hydrocarbon Exploration and Licensing Policy (#HELP)

Hydrocarbon Exploration and Licensing Policy (#HELP)

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved theHydrocarbon Exploration and Licensing Policy (HELP).

Four main facets of this policy are:

                                i.           uniform license for exploration and production of all forms of hydrocarbon,

                              ii.           an open acreage policy,

                            iii.           easy to administer revenue sharing model and

                            iv.           marketing and pricing freedom for the crude oil and natural gas produced.

The decision will enhance domestic oil & gas production, bring substantial investment in the sector andgenerate sizable employment. The policy is also aimed at enhancing transparency and reducing administrative discretion.

The uniform licence will enable the contractor to explore conventional as well as unconventional oil and gas resources including CBM, shale gas/oil, tight gas and gas hydrates under a single license.  The concept ofOpen Acreage Policy will enable E&P companies choose the blocks from the designated area. 

Present fiscal system of production sharing based on Investment Multiple and cost recovery /production linked payment will be replaced by a easy to administer revenue sharing model. The earlier contracts were based on the concept of profit sharing where profits are shared between Government and the contractor after recovery of cost. Under the profit sharing methodology, it became necessary for the Government to scrutinize cost details of private participants and this led to many delays and disputes. Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc. This is in tune with Government’s policy of “Ease of Doing Business”.

Recognising the higher risks and costs involved in exploration and production from offshore areas, lower royalty rates for such areas have been provided as compared to NELP royalty rates to encourage exploration and production.  A graded system of royalty rates have been introduced, in which royalty rates decreases from shallow water to deepwater and ultra-deep water. At the same time, royalty rate for onland areas have been kept intact so that revenues to the state governments are not affected. On the lines of NELP, cess and import duty will not be applicable on blocks awarded under the new policy.  This policy also provides for marketing freedom for crude oil and natural gas produced from these blocks.  This is in tune with Government’s policy of “Minimum Government –Maximum Governance”

Pradhan Mantri Ujjwala Yojana - Scheme for Providing Free LPG connections to Women from BPL Households

 #PradhanMantriUjjwala Yojana - Scheme for Providing Free LPG connections to Women from BPL Households

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved Pradhan Mantri Ujjwala Yojana - Scheme for Providing Free LPG connections to Women from BPL Households. Under the scheme, Rs 8000 crore has been earmarked for providing five crore LPG connections to BPL households. The Scheme provides a financial support of Rs 1600 for each LPG connection to the BPL households. The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories. This Scheme would be implemented over three years, namely, the FY 2016-17, 2017-18 and 2018-19. 

This is the first time in the history of the country that the Ministry of Petroleum and Natural Gas would implement a welfare scheme benefitting crores of women belonging to the poorest households. 

In our country, the poor have limited access to cooking gas (LPG). The spread of LPG cylinders has been predominantly in the urban and semi-urban areas with the coverage mostly in middle class and affluent households. But there are serious health hazards associated with cooking based on fossil fuels. According to WHO estimates, about 5 lakh deaths in India alone due to unclean cooking fuels. Most of these premature deaths were due to non-communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer. Indoor air pollution is also responsible for a significant number of acute respiratory illnesses in young children. According to experts, having an open fire in the kitchen is like burning 400 cigarettes an hour. 

Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas. 

In this direction, Finance Minister in Budget speech on 29.2.2016 had announced a budgetary provision of Rs. 2000 crore for 2016-17 to provide deposit free LPG connections to 1.5 crore women belonging to the Below Poverty Line (BPL) families. Further, the Budget announced that the Scheme will be continued for two more years to cover 5 crore households. 

Cyber Gram and Hamari Dharohar

Cyber Gram and Hamari Dharohar

A pilot project namely “Minority Cyber Gram ” was launched in February, 2014 for imparting Digital Literacy in a minority dominated village Chanduli in Alwar district, Rajasthan in association with an organization namely Digital Empowerment Foundation. The village has 1300 households. Two per family (2600 persons) including non minorities in the village were selected for Digital Literacy. The project has been completed and so far 2890 persons have benefited from the programme. After the success of the pilot project, Ministry has mainstreamed the Cyber Gram Programme within the scheme of Multi-sectoral Development Programme (MsDP) from 2014-15, and guidelines were issued to all State Government/ UT administration.

‘Cyber Gram’ has been launched as an initiative under Multi-sectoral Development Programme(MsDP) to provide hands on training in computers to the students of minority communities and enable them to acquire basic Information and Communication Technology (ICT) skills; become digitally literate; actively participate in knowledge based activities; access financial, social and government services and use internet for communications. The initiative covers students of Class VI to Class X belonging to notified minority communities residing in minority concentration areas. Under the initiative, training of 3,71,657 students of Uttar Pradesh, West Bengal, Tripura and Rajasthan have been approved so far, with the total cost of Rs.57.79 crore. The proposal of Maharshtra has been in-principal approved.

To improve the compliance and implementation of projects in States, the Government has made a provision of robust mechanism for monitoring of the programme. The monitoring of the programme is done through

(1) Committees constituted at different levels starting from Blocks to the Centre

(2)       Independent agency/qualified monitors

(3)    Conferences at national, regional, sate and district levels and visits of officials to the project sites.

Under cybergram initiative of Multi-sectoral Development Programme, there is no provision for purchase of equipments. Hence no funds for purchase of equipment for implementation of cybergram initiative of MsDP has been sanctioned to States/UTs.

There is no proposal to conduct performance audit of the Cybergram initiative under MsDP separately.

“The Scheme Hamari Dharohar was launched during the year 2014-15. The scheme aims to preserve rich culture and heritage of minorities through selective intervention under the overall concept of Indian culture. Under this scheme during the year 2015-16, following two projects have been selected and approved:

-Organization of the international iconic exhibition „The Everlasting Flame‟, to preserve the rich heritage of Parsi Community of India. The Programme includes three international exhibitions namely “The Everlasting Flame: Zoroastrianism in History and Imagination”, “Threads of Continuity” and “Painted Encounters— Parsi Traders and the Community”, to be hosted at the National Museum, Indira Gandhi National Centre for the Arts (IGNCA) and National Gallery of Modern Art (NGMA) at New Delhi during 19th March to 29th May, 2016.

Merger of Ministries

Merger of Ministries

The Ministry of Overseas Indian Affairs (MOIA) has been merged with the Ministry of External Affairs (MEA). Administrative arrangements of the merger are currently underway.

A decision was taken to merge the two Ministries to bring better synergy for realising the objectives of bringing Indian Diaspora closer to India. Most policies, programmes, schemes and initiatives of MOIA were being implemented through MEA and Indian Missions/Consulates abroad. Matters pertaining to Indian nationals abroad, their welfare and protection are also taken up by MEA and the Indian Missions abroad. MEA handling the Overseas Indian Affairs would bring in more efficiency in handling matters related to Indian Diaspora. The merger is also in accordance with the Government’s objective of maximum governance with minimum government.

The Ministry of Overseas Indian Affairs was entrusted all matters relating to overseas Indians, comprising Persons of Indian Origin (PIOs) and Non-Resident Indians (NRIs), excluding matters specifically allotted to other Departments.

MOIA had been handling issues described in part (c) since 2004. However, the policies, programmes and initiatives, schemes of MOIA could not be implemented efficiently, due to MOIA’s dependence on MEA and Indian Missions abroad, and duplication in the functions of the two Ministries. MOIA was also a small Ministry which did not have the institutional mechanisms to attain the objectives that it was set up for.

One representation was received from the Government of Kerala about the decision to merge MOIA with MEA. Our response to the Kerala State Government stated that the decision to merge the two Ministries was taken to further deepen our engagement with our Diaspora, to synergize our resources and to enhance the efficiency with which we address issues pertaining to the Indian Community abroad.