Daily Economic News 20-21 December 2016

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24 Dec, 2016

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Indian Economy News

December 20-21, 2016

ND has initiated a new section of daily news, where our news desk compiles the latest news on the Indian economy, to keep our readers abreast and updated on daily economic state of affairs.

The economy news compilations bring business news reports that are relevant today and tomorrow, based on the new pattern of current affairs, and for English awareness. This gives vital inputs on the various sectors of the Indian Industry and trade.

• Doha Bank sets ball rolling to start subsidiary in India
• Marriott, Carlson Rezidor & ITC plan more budget hotels in state capitals, tier-II cities
• Income tax relief for small firms in bid to encourage digital payments
• Govt launches portal for accessing various services on single platform
• Wi-Fi launched at 8 more stations, Mumbai-Goa travel to get faster
• For the first time in nearly 150 years, India’s economy surpasses that of United Kingdom
• Next step towards ’24×7 Power For All’: Shri Piyush Goyal launches GARV-II App to track Rural Household Electrification and Citizen Engagement Window ‘SAMVAD’
• More than 1.22 crore new LPG connections released to BPL women under Pradhan Mantri Ujjwala Yojana
• Next step towards ’24×7 Power For All’: Shri Piyush Goyal launches GARV-II App to track Rural Household Electrification and Citizen Engagement Window ‘SAMVAD’
• More than 1.22 crore new LPG connections released to BPL women under Pradhan Mantri Ujjwala Yojana

Wi-Fi launched at 8 more stations, Mumbai-Goa travel to get faster

Economic Times:  December 20, 2016

Mumbai: Railway minister Suresh Prabhu on Sunday announced a new terminus for long-distance trains at Kalyan, a 130kmph superfast train from Mumbai to Goa and an all-AC Humsafar train with modern amenities from here soon.

Prabhu was speaking at a function to flag off a new train from Bandra Terminus to Gorakhpur. He promised Rs 40,000 crore for city projects to develop and strengthen the rail network, provide more facilities and ensure speedy transit. It could include the Bandra-Virar and CST-Panvel elevated corridors, besides projects under MUTP-III, formulated by Mumbai Metropolitan Region Development Authority , sources said. Mumbai to Goa travel will so on get faster.

“For those hea ding to Kon kan or Goa, a Kon kan or Goa, a superfast Tejas train will soon ensure you reach your destination in the fastest possible time,“ Union railway Tejas train will soon ensure you reach your destination in the fastest possible time,“ Union railway minsiter Suresh Prabhu said on Sunday . Expected early next year, it will be faster than Jan Shatabdi, which travels at 120kmph, officials said. Tejas will offer services such as entertainment, local cuisine and Wi-Fi. It will have TV screens on the back of each seat. The Jan Shatabdi ferries passengers to Goa in eight hours and 25 minutes.

The Humsafar train, to be launched in north India, will start from Mumbai, although Prabhu did not disclose the destination. It will have 16 AC III-tier coaches and two power cars. It could run inter-city overnight journeys and has been targeted at middle-class passengers. The train will have CCTV , global positioning system (GPS)-based passenger information, mobile and laptop charging points, integrated Braille display for the visually impaired, a smoke detection and suppression system and a high-quality exterior and interior design.

Prabhu was keen on a terminus for Kalyan and redevelopment of Thane station soon. Several outstation trains stop at Kalyan, so some could be terminated there once the terminus is built, sources said.

Prabhu also launched other facilities and train services for commuters on Sunday .“I am happy that Diva has finally got 24 fast train halts, it will ensure there is no more congestion, especially during peak hours. Besides, we are converting 12 services of 12-coach rakes to 15-coach rakes on the Western Railway suburban section; 25% more commuters can be ferried in each service.“

He also launched Wi-Fi services for commuters at Vashi, Belapur, Kurla, Mumbai CST, Byculla, Panvel, Thane and Borivli stations, platform 7 at Dadar (Western Railway), an FOB at Mankhurd and escalators at Dadar (WR), Bhayander and Vasai Road.

For the first time in nearly 150 years, India’s economy surpasses that of United Kingdom

Economic Times:  December 20, 2016

New Delhi: Owing to Britain’s recent Brexit-related problems and thanks to India’s rapid economic growth, India has managed to overtake its erstwhile colonial master United Kingdom in terms of the size of the economy – the first time after nearly 150 years.

This dramatic shift has been driven by India’s rapid economic growth over the past 25 years as well downslide in the value of the pound over the last 12 months, a report published in Forbes magazine said.

“Once expected to overtake the UK GDP in 2020, the surpasso has been accelerated by the nearly 20 per cent decline in the value of the pound over the last 12 months, consequently UK’s 2016 GDP of GBP 1.87 trillion converts to $2.29 trillion at exchange rate of GBP 0.81 per $1, whereas India’s GDP of INR 153 trillion converts to $2.30 trillion at exchange rate of INR 66.6 per $1,” the report said.

Interestingly, economic think-tank Centre for Economics and Business Research (CEBR) had, in December 2011, forecasted that India would become the “fifth largest by 2020” but India has crossed this significant milestone much sooner.

“Furthermore, this gap is expected to widen as India grows at 6 to 8 per cent p.a. compared to UK’s growth of 1 to 2 per cent p.a. until 2020, and likely beyond. Even if the currencies fluctuate that modify these figures to rough equality, the verdict is clear that India’s economy has surpassed that of the UK based on future growth prospects,” the report said.

Union Minister of State for Home Affairs Kiren Rijiju while celebrating India’s landmark, said, “India overtakes UK & becomes 5th largest GDP after USA, China, Japan & Germany.”

“India may have large population base but this is a big leap,” Rijiju added.
On October 8, this year, International Monetary Fund (IMF) too had predicted India to surpass Europeans by the end of the fiscal.

“India is the seventh largest economy worth $2.29 trillion – just $50 billion less than the current UK’s GDP, which will be bridged by end of this fiscal,” IMF had said.

Govt launches portal for accessing various services on single platform

Livemint:  December 20, 2016

New Delhi: With the aim to provide seamless access to government services under various ministries and government entities, a government services portal (services.india.gov.in/) was launched by the information technology (IT) ministry on Monday.

Citizens will now be able to avail different services such as application for PAN card, scholarship, jobs, digital certificates, voter IDs, passports and visa, through a single window.

It will also serve as a directory where users can enter the pin code or state name to get the post office name along with the district corresponding to that pin code.

As of now, a total of 1,955 services related to education, health, electricity, water and local services, justice and law, pensions and benefits have already been listed on the website.

The website which has been designed and developed by the National Informatics Centre (NIC) was launched by P.P. Chaudhary, minister of state for law and IT, at ‘Digital India Awards 2016’.

Speaking at the event, law and IT minister Ravi Shankar Prasad, said, “The government is working towards the concept of digital villages. To start with, we would like to enable 100 such villages with virtual world facilities in the field of infrastructure, education and healthcare.”


Income tax relief for small firms in bid to encourage digital payments

Livemint:  December 20, 2016

New Delhi: Small merchants with a turnover of up to Rs2 crore will have to pay less tax on financial transactions that have been carried out digitally, the finance ministry said on Monday, unveiling one more measure aimed at making the Indian economy less dependent on cash.

The tax relief applies to any individual, HUF (Hindu undivided family) or a partnership firm other than limited liability partnerships (LLP) carrying on any business other than transportation, agency, brokerage and commission and having a revenue of Rs2 crore or less.

Under the Presumptive Taxation Scheme under section 44AD of the Income-tax Act, 1961, such entities will now pay a lower 6% of deemed profit in tax instead of the current 8% of deemed profit in respect of the amount of total turnover or gross receipts received through banking channels or digital means for the financial year 2016-17. However, the existing rate of 8% will continue to apply for total turnover or gross receipts received in cash.

Such an assessee is not required to maintain the regular books of account and is also exempt from getting the books of account audited.

The finance ministry said the necessary legislative amendment in this regard shall be carried out through the Finance Bill, 2017.

Since 8 November, the government has announced a slew of measures to encourage cashless transactions. The government hopes that reducing the usage of cash and encouraging more electronic transactions will help create a paper trail for all transactions and curb the creation of black money. This will, in effect, increase the tax base and add to tax revenues.

To ensure that the cashless push is pan India and led by Indian states, the government last week appointed a high-level panel comprising six chief ministers and experts such as Nandan Nilekani, former chairman of the Unique Identification Authority of India, to chart out a road map for adoption of digital modes of payment. The panel, led by Andhra Pradesh chief minister Chandrababu Naidu, met bankers and the central bank on Thursday and will submit an interim report in the next few days.

The government has already waived merchant discount rates (MDR) on digital transactions of up to Rs2,000 till 31 December.

Customers will also not bear the burden of transaction fees and MDR for payments made to central government departments and public sector firms. Customers will also get a 0.75% discount on digital purchases of petrol and diesel from state-owned outlets.

On Thursday, Niti Aayog also announced awards for people making payments through digital means. A total of 15,000 winners will get Rs1,000 each for 100 days starting Christmas. The scheme runs from 25 December 2016, to 14 April 2017. On 14 April, a mega award of Rs1 crore will be announced for consumers. The second prize will be of Rs50 lakh and third of Rs25 lakh. The scheme will not cover transactions above Rs5,000 or below Rs50.


Marriott, Carlson Rezidor & ITC plan more budget hotels in state capitals, tier-II cities

Economic Times:  December 20, 2016

Hyderabad, New Delhi: Don’t be surprised if you come across more Marriott or ITC budget hotels when planning your next vacation. Looking to tap into the increasing spending capacity of middleclass business and leisure travellers, luxury hotel majors such as Marriott International, Carlson Rezidor and ITC have lined up mega plans to set up more upscale, budget hotels in state capitals and tier-II cities. Industry observers call it a logical move as mid-segment hotels involve less costs and generate better returns.

According to experts, the mid-hotel segment is expected to see an investment of close to Rs 6,600 crore, excluding land value, in the next five years.

For Marriott, of the 103 to be launched by 2020, 50% would be upscale and upper mid-scale hotel brands. Neeraj Govil, area vice-president for South Asia at Marriott International, said, “Since midsegment hotels have been giving better returns because of rising demand from domestic travellers, we plan to add more hotels under this segment by 2020.” Marriott has over 10 brands in the upscale and upper mid-scale segments, in its hotel portfolio of 30 brands.

Carlson Rezidor, which has a portfolio of mid-scale brands such as Country Inn & Suites and Park Inn by Radisson, plans to increase its share in this segment to 50% from the current 36-37%. Carlson expects to have 84 operational hotels in this segment by the end of this year in the country. “The metros and larger cities are saturated. We are expanding into secondary and tertiary markets as mid-scale properties offer better returns on investment.

Also, the segment holds a brighter future in terms of growth,” Raj Rana, CEO, South Asia, Carlson Rezidor According to Knight Frank, around 7,000 keys will be added this year across segments, of which 38% would be in the mid-market space. In 2015, around 8,500 keys were added. Over the next 3-5 years, the segment will see an average addition of 6,000 keys per year.

ITC Hotels chief executive Dipak Haksar too believes the segment has immense potentail in metros, state capitals and tier-II, III cities. Hyatt had previously stated that the company was focusing on its select-service brand Hyatt Place, which offers a cost-effective option for business travellers and their families.

Pavethra Ponniaha, vice-president, ICRA, said, “Due to high land costs, hoteliers earlier used to construct luxury hotels in large numbers as it was difficult to recover the desired return on investment from budget or upscale hotels. However, with the rising income levels and an uptick in domestic travellers, hoteliers are now focusing on this segment.”

“From a hotelier’s perspective, mid-size hotels offer higher occupancies as the price range is more conducive for middle-class travellers and lower overhead costs such as staff numbers, food and beverages. Revenue per available room (RevPar) in this segment has grown by about 3.5% year-on-year in 2015 and 5.7% in 2016,” said Abhijeet Umathe, associate director (hospitality & leisure), Knight Frank.


Doha Bank sets ball rolling to start subsidiary in India

Economic Times:  December 20, 2016

Mumbai: Qatar’s Doha Bank will seek permission from its central bank to apply for a local subsidiary in India as it seeks to diversify into the world’s fastest growing economy and fully tap the potential for remittances between the gulf state and India.

R Seetharaman, CEO at the Qatari lender said it will apply with the Qatar Central Bank in the next two months and subsequently start putting together an application to open a local subsidiary with the Reserve Bank of India (RBI) giving it an opportunity to build a branch network in India.

“Our board has approved the plan in principle. We plan to build a retail branch network. In the first phase we plan to be present in 12 locations followed by six locations in the second phase and another six locations following that. The first phase will start in the next three years,” Seetharaman said.

Doha Bank has three branches in India currently. It added two branches last year after acquiring HSBC Bank Oman’s India business. Seetharaman said that the long term plan of the bank is to build a network in both Tier I and Tier II cities in India.

“Our long term plan is to build a subsidiary which you cannot do with one or two branches. We want to build a network in Tier I and II towns and connect the world. Capital is not a constraint for us. We are an AA rated entity and we will get capital as and when required,” he said. Doha Bank has invested $50 million in capital in India so far.

So far, State Bank of Mauritius and Singapore’s DBS Bank Ltd are the only two foreign banks that have publicly expressed willingness to open local units after RBI announced final guidelines for foreign banks wanting to open subsidiaries in India in November 2013. Both these banks have applied to the central bank in 2015.

RBI has promised to treat foreign banks opening local subsidiaries equally with local lenders, giving them the freedom to open branches and also later allow them to acquire local banks.

Banks from the gulf see India as a lucrative market because of the high growth potential and more importantly because they can tap deposits through the remittance inflows between their home markets and India. Doha Bank for example helped transfer Rs 3,200 crore in remittances into India last year.

Doha Bank’s larger peer Qatar National Bank with $195 billion in assets also get a license to start operations in India earlier this year. Doha Bank is much smaller with $23 billion in assets but has a head start with a $1 billion credit line to Indian companies and Rs 500 crore of fund and non-fund exposure in India.


More than 1.22 crore new LPG connections released to BPL women under Pradhan Mantri Ujjwala Yojana

Press Information Bureau:  December 21, 2016

A large number of important policies, activities, decisions and initiatives were undertaken by the Ministry of Petroleum & Natural Gas in last one year. The achievements were in downstream, midstream as well as upstream sectors. The year was declared as the year and saw launch of a number of people-oriented initiatives.

  1. Pradhan Mantri Ujjwala Yojana (PMUY)

Government has approved Rs. 8000 crore under the Pradhan Mantri Ujjwala Yojana (PMUY) for release of 5 crore deposit free new LPG connections to Women of BPL families over three years, i.e. FY 2016-17, 2017-18 and 2018-19. The scheme will provide an initial cost of Rs. 1600/- for providing LPG connection to poor households in the name of women of the household. The Prime Minister launched the scheme on 01.05.2016 at Balia, Uttar Pradesh.

LPG connection to BPL families is being provided to the BPL family access to clean cooking fuel. The provision of LPG as a cooking fuel helps in addressing health problems caused by use of traditional sources of cooking fuel such as fire wood, coal, cowdung, etc. This will in turn enhance productivity of woman, raise their quality of life by removing drudgery associated with collection of wood and ensure them against non-availability of cooking fuel, at times.

Under the scheme, the Government of India provides deposit free LPG connection of BPL families identified through the Socio-Economic Caste Census 2011 data, which includes security of one cylinder, pressure regulator, hose pipe, installation charges and DGCC Book. The consumer has to purchase ISI standard gas stove, which is optional. Further, Oil Marketing Companies are also financing purchase of LPG stove and 1st refill to BPL customers on instalment basis, if they so desire.

To ensure smooth supply chain of LPG cylinders to meet the demand, Government is in process of setting up of 10,000 new distributorships. Majority of these distributorships will come in rural areas to cater to unserved consumers.

As on 09.12.2016, Oil Marketing Companies (OMCs) have released 12288517 new LPG connections under Pradhan Mantri Ujjwala Yojana (PMUY).

  1.  Direct Benefit Transfer in PDS Kerosene Scheme (DBTK)

Jharkhand has become first State in the country to implement DBTK and others have been requested to join the Scheme. Under the Scheme, the Kerosene is being sold at non-subsidised price and subsidy, as admissible, is being transferred to consumers directly into his/her bank account. The States would be given cash incentive of 75% of subsidy savings during the first two years, 50% in the third year and 25% in the fourth year. In case the States voluntarily agree to undertake cuts in kerosene allocation, beyond the savings due to DBT, a similar incentive would be given to those States/UTs. The initiative of the Government is aimed at rationalizing subsidies based on approach to cut subsidy leakages, but not subsidies themselves. The scheme will also stop diversion of Kerosene.

State Government of Karnataka had volunteered to undertake cut in Kerosene allocation and the similar proposal has also been received from Government of Haryana and Government of Telangana.

Further, Government of Haryana has requested to make the State Kerosene free by 31.03.2017.

  1.  Kerosene Free Delhi and Chandigarh

NCT of Delhi and UT of Chandigarh have been declared Kerosene Free cities effective 1st October, 2013 and 1st April, 2016 respectively and hence no PDS SKO allocation is made to them.

  1.   PAHAL: World’s largest Direct Benefit Transfer Scheme

PAHAL (Pratyaksh Hasthantarit Labh) is the world’s largest Direct Benefit Transfer Scheme. Through PAHAL, subsidy given to consumers is directly transferred to the registered account of the consumer without involving any intermediary.  More than 16.99 crore consumers are registered to avail subsidy as on 28.11.2016.  PAHAL Scheme has been acknowledged by the Guinness Book of World Records as the largest cash transfer programme (households). More than Rs. 38,276 crore of subsidy has been transferred to the LPG consumers through 204 crore transactions since inception of the Scheme.

An intensive exercise was carried out for identifying duplicate / fake / ghost / inactive domestic LPG connections and, as of 01/04/2015, 3.34 crore such connections were identified. As a result of implementation of DBTL (PAHAL) mechanism, it became possible to block these 3.34 crore LPG connections as the subsidy was transferred in the accounts of only those consumers who had registered under PAHAL and who have been cleared after de-duplication exercise. For the financial year 2014-15, for 3.34 crore consumers outside the PAHAL net, the estimated savings would be 3.34 crore x 12 cylinders x Rs.369.72 (average subsidy per cylinder for FY 2014-15) equal to Rs.14,818.4 crore. Following a similar principle, the savings estimated for FY 2015-16 is Rs.6,443 crore and total savings for both the years works out to Rs.21,261 crore.

  1.  Giveitup and Giveback

Till date, around 105 lakh households have voluntarily given up their LPG subsidy, Nearly 63 lakh new LPG connections have been released to BPL families in Financial Year 2015-16 linked to Giveback campaign utilizing CSR funds of OMCs.

  1. Production of Crude oil and Natural Gas

Crude oil production during the year 2015-16 is at 36.950 Million Metric Tonnes (MMT) as against production of 37.461 MMT in 2014-15, showing a decline of 1.36%. Production of natural gas during the year 2015-16 is at 32.249 Billion Cubic Meters (BCM) which is 4.18% lower than production of 33.657 BCM during 2014-15. Crude oil production was mainly affected due to various reasons, including inter alia, less than envisaged production, natural decline due to mature fields and reservoir issues in some of the fields, rise of water cut, restricted bowser movement due to Assam bandh and power supply failure. Natural Gas production was affected due to natural decline in some of the fields, underperformance of wells, closure of wells for maintenance activities, less off-take by potential consumers etc.

  1. Refining Capacity and Production

There has been considerable increase in refining capacity in the country over the years. During 2015-16, there was capacity expansion by 15 Million Metric Tonnes Per Annum (MMTPA) with the commissioning of Paradip Refinery. With this increase, the refining capacity has now reached at 230.066 MMTPA. Refinery Crude throughput (Crude Oil Processed) during 2015-16 was 232.854 MMT.

  1.  Emphasis on Bio-fuels

Ethanol Blended Petrol Programme

The Government, through Oil Marketing Companies (OMCs), is implementing Ethanol Blended Petrol (EBP) Programme under which, OMCs sell ethanol blended petrol with percentage of ethanol upto 10%.  In order to improve the availability of ethanol, the Government on 10.12.2014, inter-alia, decided to fix the delivered price of ethanol in the range of Rs. 48.50 per litre to 49.50 per litre, depending upon the distance of distillery from the depot/installation of the OMCs.  Further, ethanol produced from other non-food feedstocks besides molasses, like cellulosic and lingo-cellulosic materials including petrochemical route, has also been allowed to be procured. Due to these efforts, for the sugar year 2014-15, a quantity of 67.42 crore litre has been procured, almost doubling the supply of ethanol as compared to previous sugar year.  For Sugar year 2015-16, Oil Marketing Companies have contracted 130 crore litres of ethanol till 26.7.2016.

Bio-diesel Programme

On 10th August, 2015, the Government has issued notification to allow the sale of Bio-diesel (B100) by private manufacturers to bulk consumers like Railways, State Transport Corporations and other bulk consumers. Also, retailing of bio-diesel blended diesel by Oil Marketing Companies has started on the same day.  As on 1.7.2016, 1.32 Cr Litre biodiesel (B100) has been procured by OMCs.

Second Generation Ethanol

In furtherance of the decision of the Government to allow procurement of ethanol produced from cellulosic and ligno-cellulosic feedstock, Numaligarh Refinery Limited (NRL) has completed the Detailed Feasibility Report (DFR)  for a project to set up a bio-refinery for production of 49 TMT of bio-ethanol per annum from bamboo, in collaboration with M/s Chempolis Oy, Finland, at a project cost of Rs. 950 crores.

  1.  Auto Fuels

Ministry of Petroleum & Natural Gas vide order dated 19.01.2015 has notified the implementation of BS-IV auto fuels in the entire country w.e.f 01.04.2017 in a phased manner. It has been decided that the country will leapfrog directly from BS-IV to BS-VI fuel standards and BS-VI standards will be implemented in the country w.e.f 01.04.2020.

  1. Gas pipeline in eastern India

The eastern India gas corridor i.e. Jagdishpur-Haldia pipeline (JHPL) project of 1847 Km is being implemented by GAIL. The design capacity of JHPL is 16 MMSCMD. JHPL project is considered for meeting the energy and feed stock needs of various industries (viz. Fertilizer Plants, Power Plants, City Gas Distribution etc.) en-route the Pipeline in Uttar Pradesh , Bihar, Jahrkhand and West Bengals. GAIL is implementing the JHPL in a phased manner at the total cost of about Rs. 13000 crore. Survey work for the entire project has been completed. GAIL has started work on execution of Phase-I of JHPLTrunk line of 341 Km from Phulpur (U.P.) to Gaya (Bihar) along with Spur-lines (414 Km) to Varanasi, Gorakhpur, Patna and Barauni at the cost of about Rs 4000 crore. GAIL has opened the pipeline construction office at Patna (Bihar). The activities related to acquisition of Right of User (RoU) for pipeline laying has been commenced. The construction work on pipeline sections of 236 Km in Bihar (Patna and Barauni) has been commenced on September 15, 2015. Further, GAIL has taken steps to procure Line pipe for mainline from Phulpur to Dobhi (316 Km) and work is in progress. Phase-I of JHPL project is expected to be completed by 2018-19 in synchronization of anchor gas customer and gas sources. The matter was considered in PIB meeting held on 6th July, 2016 and it was agreed to provide 40% monetary support of the capital cost to GAIL from Government Budget.

  1.  Make in India

All Oil PSUs have formulated INDEG (Indigenisation Group) to increase the domestic component in all kinds of procurements. MoUs have been signed with research and academic institutions to develop indigenous technologies. The work on the feasibility for establishing a Petroleum Economic Zone is in an advanced stage. A concept note on use of OIDB funds for Make in India has been sent to Min. of Finance and Niti Aayog for comments.

  1.  Indian Strategic Storage Programme for storage of crude oil by Indian Strategic Petroleum Reserves Limited (ISPRL).

Ministry of Petroleum and Natural Gas, in pursuance to the decision of the Union Cabinet on 7th January, 2004, through Indian Strategic Petroleum Reserves Limited (ISPRL), has constructed Strategic Crude Oil Reserves with storage capacity of  5.33 Million Metric Tonnes (MMT) at three locations viz. Visakhapatnam (storage capacity: 1.33 MMT), Mangalore (storage capacity: 1.5 MMT) and Padur (storage capacity: 2.5 MMT) to enhance the energy security of the country.  The reserves are being created by the Government so that the crude oil will address the oil needs of the country, in the event of a national calamity, disruption of supplies, unforeseen global event leading to scarcity of supplies/abnormal spike in prices etc.  Indian Strategic Petroleum Reserves Limited is a Special Purpose Vehicle, which is a wholly owned subsidiary of Oil Industry Development Board (OIDB).  The crude oil storages are in underground rock caverns and are located on the east and west coasts so that they are readily accessible to the refining sector.

The capital cost of the three storages, namely, Visakhapatnam, Mangalore and Padur is Rs 4098.35 crore.

As regards filling of crude oil in these caverns, the Cabinet Committee on Economic Affairs (CCEA), in its meeting held on 31st March, 2015  decided that the cost for filling crude oil in Visakhapatnam cavern will be met by the Government of India  against the 12th Plan outlay of Rs. 4948 crore under the GBS Scheme of Ministry of Petroleum & Natural Gas for the Indian Strategic Storage Programme for storage of crude oil by ISPRL and the  remaining amount would be used for filling up the strategic part of the caverns which are being constructed at Mangalore and Padur. Besides, Ministry of Petroleum and Natural Gas would continue to explore alternative models for filling part of the reserves in respect of Mangalore and Padur caverns including commercial utilization by other interested parties.

The Vishakhapatnam and Mangalore storage facilities have already been commissioned. The facility at Vishakhapatnam has already been filled up and nearly one fourth of Mangalore storage facility has also been filled. The storage facility at Padur has also been completed.

  1.  Production and Consumption of Petroleum products

The production of petroleum products is at 231.924 MMT in year 2015-16 as against 221.136 MMT achieved n 2014-15, showing an increase of 4.88%. During the year 2015-16, the consumption of petroleum products in India was 183.495 MMT with a growth of 10.86% as compared to consumption of 165.520 MMT during 2014-15.

  1. Import of Crude oil

Import of crude oil during 2015-16 was 202.851 MMT valued at Rs. 4,16,361 crore which marked an increase of 7.08% in quantity terms and 39.43% decrease in value terms over import of 189.435 MMT valued at Rs. 6,87,416 crore during 2014-15. The decline in value terms is related to reduction in average crude oil price from 84.2 US$/bbl in 2014-15 to 46.17 US$/bbl in 2015-16.

  1. Import and Export of Petroleum Products

During the year 2015-16 imports of petroleum products were 28.302 MMT valued at Rs. 65,803 crore which shows an increase of 32.87% in quantity terms and 11.84% decrease in value terms against imports of 21.301 MMT valued at Rs. 74,644 crore during 2014-15.

During the year 2015-16, exports of petroleum products were 60.536 MMT valued at Rs. 1.76,733 crore which shows a decrease of 5.31% and 38.74% decrease in quantity and value terms against the exports of 63,932 MMT valued at Rs. 2,88,580 crore for the corresponding period of last year.

  1.  Swachh Bharat Mission

The Oil & Gas Central Public Sector Enterprises and its Joint Ventures (CPSEs/JVs) under the administrative control of Ministry of Petroleum & Natural Gas have under Swachh Bharat Abhiyaan, completed construction of 20,186 school toilets with a total cost of Rs. 355.85 crore, providing services to more than 5.5 lakh girl students. Also Oil Marketing Companies have provided clean toilets in 51,846 Retail Outlets (ROs). Out of these, 21,750 ROs are having separate facilities for men/women as on 30.06.2016.

  1.  Policy for Discovered Small Field

Cabinet on 02.09.2015 approved Discovered Small Field Policy for monetization of 69 hydrocarbon discoveries made by National Oil Companies ONGC and OIL which could not be monetized for many years due to various reasons such as isolated locations, small size of the reserves, high development costs, technological constraints, fiscal regime etc. Policy notifications were issued. In addition, notifications for royalty and exemption of cess and customs duty were issued.  MoP&NG decided to defer auctioning of two fields in Nagaland. The Ministry launched the bid on 15/07/2016. National and International Road Shows were held at various places. 134 e-Bids for the 34 contract areas under the Discovered Small Fields (DSF) Bid Round 2016 were received by the deadline of 1200 Hours on 21st November 2016. The bid round took place in a challenging global market environment when the oil & gas prices have been volatile and the investment in the exploration & production sector has seen substantial decline. Out of the total 134 e-bids received, 120 e-bids were received for onland areas and 14 e-bids were received for offshore areas. As many as 42 companies (Individually or as member of the bidding consortium) participated in the bid round.

  1.  Hydrocarbon Exploration Licensing Policy (HELP)

Cabinet on 10.3.2016 has approved Hydrocarbon Exploration and Licensing Policy (HELP) for award of hydrocarbon acreages.  The salient features are (a) Single License for exploration and production of conventional as well as non-conventional hydrocarbon resources; (b) Open Acreage Policy-option to select the exploration blocks without waiting for formal bid round; (c) Revenue Sharing Model – simple, easy to administer – no cost recovery – no micromanagement by the Government – operational freedom to the operator; and (d) Pricing and Marketing Freedom – a major incentive for investment.

DGH has initiated the process of preparation of various documents such as Notice Inviting Offer and Model Revenue Sharing Contract etc. and to operationalise the Open Acreage Policy. On completion of preparatory work, launch of bidding round can take place.

  1.  Appraisal of Sedimentary Basin

This is a crucial step towards increasing India’s Hydrocarbon Production.  Ministry has approved a project to appraise about 1.5 Million Sq. Km in 24 Indian sedimentary basins where no/scanty geo-scientific data is available. Under the project, 2D seismic surveys are to be conducted apart from drilling of parametric Wells. The acquired database will enable understanding of the geology and hydrocarbon prospectively of the areas for carving out and offering blocks for exploration.  About 48,243 Line KM of 2D seismic data shall be acquired in onland area along with 4 parametric wells at a cost of approximately Rs. 5100 crore through the ONGC and OIL India Ltd. under the supervision of DGH. The project duration will be for five years (2015-2020).

  1. Marketing including Pricing freedom from the gas to be produced from the discoveries in High Pressure-High Temperature

CCEA has approved a 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. This initiative is expected to incentivize gas production in the country.

  1. Skill Development Initiatives

Under the Skill Development  Initiative of the Government of India,  Oil & Gas PSUs under MoPNG are setting up 6 Skill Development Institutes (SDIs) in the country.

IOCL SDI at Bhuvaneshwar, Odisha was inaugurated by Hon’ble MoS (IC) PNG, Shri Dharmendra Pradhan on 09th May, 2016. Pending allotment of land for a full-fledged Institute, the SDI has been established by refurbishing four sheds leased to Oil India Limited by Odisha Industrial Development Corporation.

The first batch comprising 45 students each in Industrial Welding and Electrician was started on 30.06.2016. The students on successful completion of the 6 months course will be issued certificates aligned to National Skills Qualification Framework (NSQF) of the Government of India. For Industrial Welding the certification will be through the Mining Sector Skill Council and for Electrician through the Capital Goods Sector Council.

Nettur Technical Training Foundation (NTTF) has been engaged as Training Partner. NTTF is providing faculty support  and will also provide placement support.

The students are charged a subsidized fee of Rs. 5000 each, while IOCL will incur an expenditure of Rs. 1 lakh on each student. Free hostel accommodation (lodging & boarding facility) has been arranged in the rented premises in the vicinity of the Institute for the students.

  1.  Start-Up

All Oil PSUs have been requested to prepare their Action Plan to  facilitate “Start-Ups” in oil and gas sector.

  1.  Indian Institute of Petroleum and Energy (IIPE), Visakhapattnam

As per 13th Schedule of Andhra Pradesh Reorganisation Act, 2014, Indian Institute of Petroleum and Energy (IIPE) has been set up with the objective to meet the quantitative and qualitative gap in the supply of skilled manpower for the petroleum sector and to promote research activities needed for the growth of the sector.  The Government of Andhra Pradesh has made available an area measuring about 200 acres of land in Visakhapatnam District for the Institute which is free of cost.  IIPE Society has been registered on 18.04.2016. College of Engineering (Autonomous) situated in Andhra University at Visakhapatnam has provided the resources to start the IIPE sessions during the academic year 2016-17 in two B.Tech. Programmes, viz., Petroleum Engineering and Chemical Engineering.  Rank list from JEE-Advanced, 2016 (IIT-Guwahati) has been received and Rank holders have been invited to apply for admission to IIPE.  About 100 students have got admission in these two programmes.  IIT-Kharagpur has been roped in to act as a Mentor Institution for starting the academic session.

The capital expenditure for the project is estimated to be around Rs.655.46 crore (Rs.432.37 crore for the 1st Phase and Rs.223.09 crore for the 2nd Phase).  Deficit funding against recurring Expenses for 2016/17 to 2014/25 period would be Rs.334.84 crore.  The source of funding for the proposal would be through Gross Budgetary Support (GBS). Foundation stone of the Institute has been laid by Hon’ble MoS (IC), PNG on 20.10.2016.

  1.  Rajiv Gandhi Institute of Petroleum Technology

Permanent Campus of RGIPT has been inaugurated at Jais, Amethi, Utter Pradesh by Minister of State (IC), Petroleum & Natural Gas on 22.10.2016 in presence of Minister of HRD and Minister of Textiles.

  1. Consumer –Centric  Initiatives

MoPNG has launched a number of consumers empowering initiating such as MyLPG.in providing online information to LPG consumers, rating of distributors based on delivery performance, SMS/IVR system to facilitate refill booking, E-SV (Sahaj) which is electronic subscription voucher released to consumer, LPG emergency help line No.1906, online payment facility for new connections and online portal to PNG customers for making bill payments.

  1.  Acquisition of stake in Vankorneft oil block OVL /Indian Consortium

With the approval of CCEA in December 2015, ONGC Videsh Ltd acquired 15% stake in Vankorneft, a 100% subsidiary of Rosneft (Russia’s National Oil Company) at a cost of US $ 1268 million and completed all related formalities on 31 May 2016. The acquisition provides 4.53 MMTOE of hydrocarbon resources. OVL is presently negotiating acquisition of additional stake of 11% in Vankorneft and is expected to add 3.32 MMTOE of hydrocarbon resources.

An Indian Consortium comprising Oil India Ltd (OIL), Indian Oil Corporation Ltd (IOCL) and Bharat Petro Resources Ltd (BPRL), a wholly owned subsidiary of Bharat Petroleum Corporation Ltd (BPCL), signed Share Sale Agreement (SSA) on 16 March 2016 in New Delhi for acquisition of 23.9% stake by the Consortium in Vankorneft from Rosneft. This acquisition is equivalent to 7.22 MMTOE of hydrocarbon resources. Presently, a draft ECS note is being process for obtaining requisite approvals. Once all acquisition formalities are completed i.r.o. 11% by OVL and 23.9% by the Indian Consortium, Indian public sector oil companies will have total 49.9% stake in Vankorneft and over 15.09 MMTOE of hydrocarbon resources will be added to India’s energy security.

  1. Hydrocarbon Vision 2030 for North East India

In tune with the Government of India’s act east policy, the Ministry of Petroleum and natural Gas has prepared a hydrocarbon vision 2030 for the north east India which was released on 9th February, 2016 in Guwahati. The document has been prepared in consultation with all stakeholders including the state governments.

The Vision aims at doubling Oil & Gas production by 2030, making clean fuels accessible, fast tracking projects, generating employment opportunities and promoting cooperation with neighbouring countries.   These synchronized goals and action plans emanate from the Vision to develop North East Region as a dominant hydrocarbon hub at the forefront of India’s energy economy and a step towards realizing our Prime Minister’s vision to develop the North East India in a mission mode. The Vision rests on five pillars: People, Policy, Partnership, Projects and Production. The document, not only envisages doubling the oil and gas production, but it also chalks out an action plan to double the availability of petroleum products such as petrol, diesel and LPG by the year 2030. It proposes for expansion of Guwahati, Bongaigaon and Numaligarh refineries, establishment of bio-refinery at Numaligarh and development of network of natural gas, POL and LPG pipelines in the state.

The Hydrocarbon Vision Document 2030 provides for an investment to the tune of Rs. 1.3 lakh Cr by the year 2030 in oil and gas sector in NE. Meanwhile we have already started implementing the action plan envisaged in the vision document. On 17th March the MOS(IC) PNG flagged off a rake containing NRL products for transporting to Bangladesh. NRL has done all the prep work for establishment of its bamboo refinery. For Siliguri-Parbatpur pipeline, NRL has entered into MOU with Bangladesh Petroleum and route survey and DFR has been completed. Guwahati Indmax has been commissioned in April 2016. For BGR Indmax project has been approved and will be completed by the year 2019.

Augmentation of Gopanari bottling plant has been completed. Additional LPG tankage at Silchar, Manipur and Nagaland has been completed. In order to address the serious LPG shortage issues, IOCL has planned for the LPG terminal at Chittagong and laying LPG pipeline to Agartala. IOCL has signed an MOU with M/S Premium LPG in May 2016.

  1.  Petrotech 2016

PETROTECH-2016, the 12th International Oil & Gas Conference & Exhibition, organised under the aegis of the Ministry of Petroleum & Natural Gas, Government of India, was inaugurated by Hon’ble Prime Minister, Shri Narendra Modi, at Vigyan Bhawan on December 5, 2016. Shri Dharmendra Pradhan, Minister of State (Independent Charge), Ministry of Petroleum & Natural Gas, inaugurated the PETROTECH-2016 Exhibition at Pragati Maidan, New Delhi the previous evening on December 4, 2016.   As the prime showcase of India’s hydrocarbon sector, the three-day mega event saw participation of over 100 eminent speakers and 6,000 delegates from 68 countries, including technologists, scientists, planners and policy-makers, management experts, entrepreneurs, service-providers and vendors. During the events, 11 MoUs relating to the sector were signed.

Next step towards ’24×7 Power For All’: Shri Piyush Goyal launches GARV-II App to track Rural Household Electrification and Citizen Engagement Window ‘SAMVAD’

Press Information Bureau:  December 21, 2016

New Delhi: Union Minister of State (IC) for Power, Coal, New & Renewable Energy and Mines, Shri Piyush Goyal launched the ‘GARV-II’ App here today, as the next step in Government of India’s aim to provide access to electricity to all households in the country. Under this module, village-wise and habitation-wise base line data on household electrification for all States, as provided by them, has been incorporated.

Explaining the features of the ‘GARV-II’ app, Shri Goyal said that the data in respect of about 6 lakh villages, with more than 15 lakh habitations having 17 crore people, has been mapped for tracking progress on household electrification in each of the habitations of these villages, which is a remarkable progress over the previous GARV App. In the earlier version of the ‘GARV’ App, launched in October 2015 for the effective and efficient monitoring of village electrification programme, the data of only 18,452 un-electrified villages had been mapped and a 12-stage milestone-based monitoring mechanism was put in place.

a Further, the Minister informed that the status of village-wise works sanctioned under the Deen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) and release of funds to the States for these projects has also been mapped in ‘GARV-II’ to monitor progress of works in each village.  The progress is required to be updated by the implementing agencies of the States on day to day basis. All data would be made available in public domain to ensure transparency, enhance accountability of various stakeholders and facilitate view of near real time progress.

Shri Goyal further said that this app is an important part of the ‘Digital India Initiative’ of Government of India and will contribute in further development of the villages. In order to bring more transparency, the Minister asked the Power Ministry officials to place more details regarding discoms, tenders and contracts in public domain.

For places, where internet facilities are not available, Shri Goyal suggested to publish information regarding rural electrification projects like contractor’s name, amount sanctioned by the Government, deadline of the project etc. to be put on boards on the working sites in villages. This will help people in better monitoring of Government’s work, he added.

Shri Goyal, also urged State governments to determine an average price for electricity connections for APL (Above Poverty Line) families across the State so that they can be given electricity connections through the option of paying by easy monthly installments. The Minister said that the Government aims to achieve ‘24×7 Power for All’ and does not distinguish between BPL and APL households.

The Minister also interacted with State Power Secretaries on the occasion, in which a suggestion for increased appointment of Grameen Vidyut Abhiyanta (GVAs) in districts with heavy work load was well appreciated. Several GVAs also shared their experiences of working in inaccessible and hostile areas to achieve electrification of every rural household. The Minister congratulated them for their immense dedication and zeal in making ‘24×7 Power for All’ a reality.

During the event, Shri Goyal also unveiled the Citizen Engagement Window ‘SAMVAD’ which has been created to enhance participation of public at large. The feedback and suggestions from the people would be automatically forwarded to the concerned Managing Director(s) and Superintending Engineer(s) of DISCOMs through SMS & e-mail on their dashboard for online monitoring and further action.

The Minister presented awards to the best performing GVAs as well as the Digital India Award 2016 to GARV for featuring in the Top 3 best Apps that have played a pioneering role in bringing Good Governance in the country.

Other dignitaries present during the event were Shri P.K. Pujari, Secretary, Power, Shri B.P. Pandey, Special Secretary, Power and CMD, REC Ltd and other senior officials of the Ministry of Power, along with over 400 GVAs from 19 States, who interacted with the Minister. State Power Secretaries from 29 States were also connected through video conferencing.

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