After diesel, the government is considering raising cooking gas (LPG) and kerosene rates in small doses of Rs 5 per cylinder and Rs 0.50-1 a litre every month to wipe out Rs 80,000 crore subsidy on the two fuels.The previous UPA government had in January 2013 decided to raise diesel prices by up to 50 paisa litre every month.But for aberrations on two occasions, the monthly increases have taken place regularly to trim subsidy on diesel to an just Rs 1.62 a litre. This too looks set to be wiped off to make the fuel deregulated or free, with the new government continuing with the UPA decision.Following the diesel model, the oil ministry is now proposing monthly increases in LPG and kerosene rates, sources privy to the development said.Subsidy on LPG currently is a staggering Rs 432.71 per 14.2-kg cylinder and at Rs 5 per month increase it will take 7 years to wipe out the subsidy.Sources said the ministry is of the view that the monthly increases can be as high as Rs 10 if the political leadership takes a stand.On kerosene, the subsidy currently is Rs 32.87 per litre and at Re 1 hike per month it would take more than two-and-a- half years to wipe out the subsidy.Fuel subsidy, they said, is the biggest drain on the exchequer. In the current fiscal, subsidy on diesel, LPG and kerosene is estimated at Rs 115,548 crore. Of this, LPG accounts for Rs 50,324 crore and kerosene Rs 29,488 crore.This subsidy is met through a combination of direct cash dole from the budget and contribution by state-owned firms like ONGC.In 2013-14, the government paid Rs 70,772 crore in cash subsidy while upstream firms shelled out Rs 67,021 crore. In the previous year, the government payout was Rs 100,000 crore and upstream contribution Rs 60,000 crore.For diesel, the subsidy estimated is Rs 35,736 crore but this will come down if the monthly increases continue as planned, sources said.Petrol price was deregulated in June 2010 and retail rates have more or less moved in tandem with the cost.With the beginning of monthly increases in January, subsidy on diesel tripped to less than Rs 3 a litre in May last year before a fall in rupee value led to it widening to Rs 14.50 per litre in September, 2013.Top-level Parleys Going OnHectic top-level parleys have been going on to hammer out a more palatable increase in natural gas prices that would boost production and not impose a heavy burden on consumers.Finance Minister Arun Jaitley and Oil Minister Dharmendra Pradhan, were in the Prime Minister's Office over the last two days discussing possible tweaks to the Rangarajan price formula, under which the price of gas would rise to $8.8 from July from $4.2 currently.Sources said the new government was looking at making some changes in the previous United Progressive Alliance-government approved Rangarajan price formula, which will result in a steep rise in the prices of electricity, urea, CNG and piped cooking gas.A panel, headed by Bharatiya Janata Party leader Yashwant Sinha, had recommended "factoring domestic cost of production of gas for arriving at the price," the Communist Party of India (Marxist) MP said, adding that it had also suggested fixing the gas price in rupees and not dollars, as is the current practice.The Rangarajan formula calls for pricing gas at the average cost of importing liquefied natural gas into India and the rates prevailing at international hubs in the US and UK, as well as the price of gas imported into Japan.CPI(M) leader and MP Tapan Sen has written to Prime Minister Narendra Modi, seeking a review of the pricing formula, saying doubling of rates will lead to a phenomenal burden on the people."Natural gas is being produced domestically and must be priced based on cost plus reasonable returns on investment," he said."Any other methodology of pricing having no relevance with the cost of production in the name of market-determined or arm's-length basis, tailor-made to benefit the contractor, is bound to have perverse impact on the economy as well as people at large."The Rangarajan formula would double prices to $8.4 per million British thermal units and result in an additional fertiliser subsidy of Rs 14,500 crore per annum while putting a Rs 29,800 crore burden on the power sector, he said.Sen, a known opponent of higher gas prices, said the Rangarajan formula, which is being made the basis for revising the rates, should be reviewed as recommended by a parliamentary standing committee.Iraq Crisis Adds Fuel To PowerWhile the new government is keen to take an early decision, it doesn't want to add to already high inflation, which may accelerate due to a below-normal monsoon and a spike in oil prices in the aftermath of the Iraq crisis.Every dollar increase in gas price will lead to a Rs 1,370 per ton rise in urea production cost and a 45 paise per unit increase in electricity tariff. There would be a minimum Rs 2.81 per kg increase in CNG price and a Rs 1.89 per standard cubic metre hike in piped cooking gas.If the Rangarajan formula is implemented without changes, power tariff will rise by about Rs 2 per unit and CNG rates will jump by over Rs 12 per kg in Delhi.Sources said replacing or removing some elements of the formula to bring the revised rate to $7 per million British thermal units, or at best $7.5, are among the options being explored.Another possibility is to allow higher prices only on output that exceeds current production, or on production from fields discovered under the New Exploration Licensing Policy such as the Reliance Industries-operated KG-D6 fields. This would exclude state-owned firms including ONGC, which produce gas from pre-NELP blocks, from the revision.Keeping state firms out of the price revision would mean there will be no hike in CNG and piped cooking gas price because their input comes from ONGC fields.An increase in the rate for RIL, which along with partner BP plc had slapped an arbitration notice against the delay in implementation of the new rate from April 1, when the old rate expired, would make only fertiliser costlier, which the government can subsidise. No KG-D6 gas is supplied to power or CNG companies and the new rate would make its deepsea finds viable.Sources said a final call on the rate to be implemented may be taken by the Cabinet.The Rangarajan formula calls for pricing rates at an average cost of importing liquefied natural gas (LNG) into India and rates prevailing at international hubs in the US and UK as well as the price of gas imported into Japan.Sources said there is a thought that high-priced Japanese imports, which have no relevance to India, should be excluded from the formula to limit the gas price increase to about $7-7.5.The previous UPA government had in December last year approved the new formula for pricing all domestic gas from April 1 but the general elections were declared before the new rate could be announced.The oil ministry had on April 21 told Reliance Industries, which had been supplying gas from its eastern offshore KG-D6 field at the old price of $4.2 even after it expired on March 31, that the new rate will be implemented from July 1.Sources said the government does not want to miss this deadline.Will Win Public Trust: Mukesh AmbaniFacing criticism from certain political quarters over natural gas price hike, Reliance Industries Chairman Mukesh Ambani today expressed confidence the company will win public trust as it believes in creating wealth and livelihood for millions in a transparent manner."We are here to win trust and we will win this with truth and transparency," Ambani told the shareholders at the 40th AGM here in response to an indirect question on Aam Aadmi Party's (AAP's) allegations against the company.He went on to add that "I want to assure you that we are a mature corporation and we are committed to creating value...I am a big believer that we should work with people who have different views than us, convince them that what we are doing is right".AAP leaders, including its national convener Arvind Kejriwal, alleged that the proposed gas price hike would lead to further inflation and only benefit RIL.
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India may turn to Iran this year for meeting its crude oil demand. The move has become necessary in the wake of attacks by al-Qaeda-inspired militants in Iraq who have seized a portion of the country posing a threat to the regional stability and crude oil exports from the Middle-East nation. Despite US sanction over imports from Iran, the Indian government is hoping to get the leeway because the Iraq crisis has brought US and Iran on the same table, giving hope of cooperation between the two nations.Iran was the second largest crude oil supplier to India till 2010, when India started reducing its imports from the country under US pressure.In FY14, India purchased 11 MT of crude oil from Iran, which was 50 per cent less than its peak import of 21.8 MT in 2008-09.“We will have to meet our demand from somewhere. Now that the US and Iran are ready to work together on Iraq issue, we are sure that we will also be able to meet our requirements by engaging with Iran,” said an official in the Ministry Of Petroleum working on the contingency plan for crude imports. Read Also: No Impact On Fuel Supply?Read Also: India Plans More Transparent Iran Oil PaymentAccording to the Ministry of Oil and Natural Gas, India imported about 13 per cent of its crude oil requirements from Iraq last year. In the current year, government owned Oil Marketing Companies (OMC) had planned to import 19.4 Million Metric Tonnes, (about 20 per cent of total requirement) of crude oil from Iraq. The strife torn nation is the second largest crude oil producer in the OPEC group. So far, the OMCs have imported 50 per cent of the planned quantity from Iraq. However, in case of increased tension in Iraq, India will have to increase have a contingency plan for meeting its crude oil requirement.Former chairman, Indian Oil Corporation RS Butola told BW|Businessworld, “ The crude from Iran can replace crude from Iraq because it is of the same quality. However, we will have to see if the US is ready to ease its control on the issue as allowing India will mean giving exemption to other countries like China, Japan and South Korea.India's oil purchases in the 2013-14 dropped 16.5 per cent to 222,000 bpd. In the wake of nuclear tension between the US and Iran, India was asked by the US to cut down its crude oil imports from Iran between 15 and 20 per cent per annum.India planned to import 97 million tonnes of crude oil in 2014-15.
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Brent crude held near $115 a barrel on Friday (20 June), close to a nine-month high and headed for its second weekly gain on increased risks of supply disruptions from Iraq.Iraqi government forces battled Sunni militants for control of the country's biggest refinery on Thursday (19 June). If the 300,000 barrels per day refinery stays closed, Baghdad will need to import more oil products to meet its own domestic consumption, further tightening oil markets. Fields south of Baghdad, where most of Iraq's 3.3 million barrels per day (bpd) of oil is produced, as well as exports remain unaffected. But heavy fighting north of the capital and foreign oil firms beginning to pull out staff pose a risk to supplies from OPEC's number two producer."This raises the risk of production halts in the near future, so although there are no disruptions at the moment, we do see further upside to prices," said Ken Hasegawa, a Tokyo-based commodity sales manager at Newedge Japan.Brent crude slipped 8 cents to $114.98 a barrel at 0333 GMT, after ending 80 cents higher at $115.06 a barrel, the highest settlement since 6 September, 2013. The contract was up 1.3 per cent for the week, after rising 4.4 percent last week.The US crude oil contract, which expires on Friday, increased 27 cents to $106.70 a barrel. The contract settled 46 cents higher in the previous session, but was on course for a third weekly decline in four."Brent is at a high for the year, triggering some short covering and possibly adding further long positions," said Hasegawa. "The contract may go to a previous high of around $117.30 hit last August."President Barack Obama said he was sending up to 300 U.S. military advisers to Iraq. Speaking after a meeting with his national security team, Obama said he was prepared to take "targeted" military action later if deemed necessary, although insisted US troops would not return to combat in Iraq. (Reuters)
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Suzlon Group, a wind turbine manufacturer, has announced that it has received the Notice to Proceed (NTP) from CLP India, a leading investor-owned power business in Asia and one of the largest foreign investors in the Indian power sector, for a 100.8 MW wind power project. The project, located at Tejuva in Rajasthan, will comprise 48 units of Suzlon's robust S97- 2.1 MW wind turbines featuring Doubly Fed Induction Generator (DFIG) technology. This is the latest addition to Suzlon's wind portfolio of over 8000MW projects across eight states. Upon completion, this project will boost CLP India's wind power portfolio to close to 1000 MW, reinforcing its position as the leading independent power producer in the wind sector in India, foreign or domestic. Tulsi Tanti, Chairman, Suzlon Group said: "This contract is another milestone for our business in India. Through our comprehensive capabilities across wind energy value chain and end-to-end solutions, we will assist CLP India in further expanding their wind energy footprint in India. We appreciate the trust they have in our technology and look forward to a long-term collaboration."Lay’s Launches Football Favourite FlavoursLay’s, a potato chip brand from PepsiCo India has launched of its Football Favourite flavors. Lay’s has added local flavor to the global Leo Messi campaign by launching these three new limited edition offerings of Apple Chilli, Cheesy Jalapeno, Tangy Herb, to delight consumers. As part of the Football Favourite program, consumers are invited to taste these limited edition flavors and get a chance to watch Messi play live by voting for their favourite flavour. All that consumers need to do is to give a missed call on the unique numbers provided on the respective packs. The Lay’s flavor which gets the highest number of missed calls shall be the Winning flavor and one lucky Winner will be selected from the Winning flavor entries who will get a chance to watch Messi play live. Gaurav Mehta, Category Director – Western Snacks, PepsiCo India said, “With the Football Favourites campaign we plan to take the excitement to a new platform by engaging with the fans and adding fun to TV watching time. Our global campaign with international football superstar Leo Messi in India offers our consumers a chance of seeing the international football superstar play live. At Lay’s we believe in bringing in Global flavours to India that add to magical moments for consumers. The brand is about youthful optimism and carefree fun, and this is exactly what we have tried to represent in the campaign.”DDI Named Among Top 20 Leadership Training CompanyDevelopment Dimensions International (DDI) has been adjudged as one among the Top 20 Leadership Training Companies by Training Industry.com. A bench marking authority to continuously monitor the training marketplace for the best providers and services across globe.The “Top 20” list includes those leaders in the training industry that have demonstrated experience and excellence in providing leadership training services to a variety of clients.The selection of ‘2014Top 20 Leadership Training Companies’ List - just released by Training industry.com were based on the following criteria: thought leadership and influence within the leadership training industry, industry recognition and innovation, breadth of programs and range of audiences served, delivery methods offered, company size and growth potential, strength of clients, geographic reach and experience serving the marketHarley-Davidson India Launches iOS & Android AppBuilding on their initiatives to develop deeper and meaningful connections with customers that go beyond the motorcycle, Harley-Davidson India is bringing Harley owners closer together through the launch of a new H-D India app. With World Ride 2014 just around the corner the application provides the perfect platform for Harley-Davidson owners to create and share content around their rides.The application will give Harley-Davidson owners the ability to create, share and plan rides, stay connected with their H.O.G. Chapters, follow events, share experiences, receive up to date information about their motorcycle, access road side assistance and information on new products from the company. The application also enables riders to look for other riders in the vicinity when they are on the move. A custom social network has been built which allows riders to follow each other’s updates. Over 50% Real Estate Buying Decision Now Influenced By Internet: GoogleGoogle India today released a study to understand the influence of Internet on real estate purchase decisions in India. The study compiled by Google, basis a pan India offline research conducted by Zinnov and real estate related search query trends on Google revealed that over fifty percent of real estate buyers decisions are influenced by Internet research. The phenomenon, of researching online for real estate information was not limited to metros but also extended to buyers in tier two cities. The study revealed, that the overall influence of Internet today on real estate transaction value of both residential and commercial property including rentals amounted to $43 billion, with $31 billion for residential and $12 billion for commercial properties.The offline survey conducted across 15 cities in India with over 6000 respondents revealed that 74% of real estate research online was focused on residential buying and 26% focused on residential renting. Almost half the respondents were indifferent to new or resale property (47%) as the criteria for research focused more on their space requirement, budget and location. 23% respondents were in the market for resale property only, and 30% were looking for new property under construction.Amongst the top destinations on the Internet for real estate information, aggregator sites (62%) were rated as the top source for information, followed by builder and developers sites (52%). Online broker sites and real estate blogs and forums (~45%) were also rated as popularly used destinations for information.In tier 1 cities over 57% buyers were influenced by online research and in tier 2 cities the impact was equally high with 48% buyers saying that they used Internet to research for real estate purchase decisions. The usage of mobile phones for accessing real estate information online was also significant with over 55% buyers using it to access the information. This finding was consistent with Google search, with mobile contributing to over 40% real estate queries on Google search. Mobile apps were preferred over websites by buyers with 73% respondents saying they prefer to use mobile apps.NEC India To Increase Focus On The Retail MarketNEC India, a leading network and IT solutions provider, has announced its renewed focus on the retail market in India, and will showcase its state of the art technology solutions at the Retail Technology Conclave (ReTechCon), the largest retail technology conclave organised by Retail Association of India from 18 to 19 June 2014 at booth no R-71 at Renaissance Hotel in Mumbai.Reports suggested that the Indian retail segment is estimated at $520 billion and is expected to grow at a CAGR of 13% to reach around US$950 billion by 2018. Organized retail penetration, currently estimated at 7.5% ($39 billion), is expected to clock a 19-20% p.a. growth to reach 10% ($95 billion) by 2018.Koichiro Koide, Managing Director, NEC India said, “Technology is redefining the entire customer experience in retail, right from the point where the customer enters the store to the point of exit, and even beyond. IT solutions in retail therefore have a more strategic role to play today than ever before. We, at NEC India aim to strengthen its focus on the retail as well as the entertainment industry and assist its customers with end-to-end solutions right from the point of sale to payments. NEC’s NFC complemented with security solutions like NEC’s Face Recognition will empower retailers to acquire customer loyalty and enhance customer experience through its ease of use.”Adobe Announces All New 2014 Release of Creative CloudAdobe, the leader in creative software, has continued to drive Creative Cloud innovation by announcing 14 new versions of CC desktop applications, including essential tools such as Adobe Photoshop CC, Adobe Illustrator® CC, Adobe Dreamweaver CC and Adobe Premiere Pro CC. The biggest Adobe software release since CS6, it also includes four new mobile apps, updates to Creative Cloud services and new offerings for enterprise, education and photography customers. Yesterday, Adobe announced that there are now over 2.3 million Creative Cloud subscriptions, far exceeding original projections when it was unveiled two years ago.The release serves a creative industry that is changing at a staggering pace: three in four creatives believe the industry has changed more in the past five years than the previous 50 and about two thirds believe their role will significantly change in the next 3 years (see The New Creative Report, surveying 1,000 U.S. creatives, issued June 16). Creatives cited new technologies as the top driving force behind the rapid change.Anirban Dey, MD, SAP Labs India Exits SAPSAP Labs India announced that Anirban Dey has left the organization for personal reasons. He was associated with SAP Labs since 2008 and was appointed as the Managing Director of SAP Labs India in January, 2013.Additional information on Anirban’s replacement will be forthcoming. Mr. Clas Neumann, Senior Vice President and Global Head of the SAP Labs Network will work closely with the SAP Labs India leadership team to ensure a smooth transition till a new MD is appointed. SAP Labs India is the third largest R&D center outside Germany for SAP and contributes to a wide spectrum of SAP’s product portfolio ranging from developing technology platform and enterprise software, to providing customer support, accelerating sales and partnering with a rich and vibrant SAP ecosystem in India. SAP Labs India has facilities in Bangalore, Gurgaon and Pune.
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Reliance Industries on Wednesday (18 June) said it will invest Rs 1.8 lakh crore across businesses in the next three years and launch the much-awaited 4G broadband services in 2015 as it looks to break-into top 50 companies of the world.RIL Chairman Mukesh Ambani, the world's richest energy billionaire, unveiled his vision to achieve in next three years what the firm had done in 37 years of its listed history.Addressing the 40th annual general meeting of RIL, Ambani said Rs 1,80,000 crore will be invested in margin-enhancing petrochem units, expansion of energy business, opening more retail stores and roll-out of telecom business.RIL's telecom arm Reliance Jio Infocomm, which is the only company to have nationwide permits for 4G services, will start rolling out broadband services in the coming months.It will begin with field trials in August and commercial launch in 2015, he said.Read Also: RIL Take Govt To Arbitration Over Gas PricingAmbani said the company, which last fiscal became the biggest retailer in the country by revenue, is aiming doubling revenue from its retail business every 3-4 years.While it looks to raising output from its eastern offshore gas fields, RIL will in 2015-16 begin extracting gas from coal seams (coal-bed methane or CBM) from Sohagpur blocks in central Indian state of Madhya Pradesh, Ambani said.His mother Kokila Ambani, wife Nita Ambani and children were also present on the occasion.RIL, which is currently ranked 135 on the Fortune 500 list of global companies, is looking at breaking into the top 50, Ambani said.Meanwhile, Nita Ambani was on Wednesday inducted into the company board."In the past 37 years, we invested Rs 2,40,000 crore, and in this current three years' investment cycle, we will be investing over Rs 1,80,000 crore," Ambani said.Stating that RIL was at the mid-point of the investment cycle in its history, he said the projects in petrochemicals, refining, retail and telecom will come on stream over the next two fiscals."The next three years are transformational in RIL's journey... By the time we finish four decades since our first public offering, we will again be a radically different company. We hope to accomplish as much in the next three years as we have achieved in the past 37 years," he said.The company is strengthening each of its existing businesses. It is looking to double business every 3-4 years and build India's pre-eminent retailing company."Over the next three years, the commissioning of each of our large projects in petrochemicals and refining, strengthening of our retail business and the launch of Jio business will propel us closer to our aspiration of being a Fortune 50 company as we complete 40 years of our corporate journey," he said.On its flagging oil and gas business, he said efforts are on to maximise production from the existing fields even as the firm's three-year old partnership with BP resulted in two significant discoveries in KG-D6 and CYD5 blocks."Timely regulatory approvals and market-based gas prices are the key to developing these resources," he said, adding RIL and its partners have initiated the arbitration against the government, seeking revision in gas prices that were due on April 1.This arbitration is besides the one it had initiated previously against penalties levied for producing less than targets."We will endeavour to work with the government for both the arbitrations to achieve prompt and efficient resolution on the matter," he said.Ambani said with the development of CBM blocks in Madhya Pradesh, RIL will become the largest player in the unconventional energy sector in India.(Agencies)
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Have you never felt any requirement for any loan? If your answer is yes, then congratulations! You are amongst the 10 per cent of the world to enjoy this status so revel in it. Not that it speaks well for your credit score. For the rest 90 per cent, we may think that life without loans is stress-free but despite that, our life cannot be loan-free. But considering today's spiraling inflation, to maintain a lifestyle and manage and create assets for an individual has become next to impossible just on the basis of the salary or savings. Taking a loan has become a part of most of us. Opting for a loan or a life of credit is not a problem. The problem starts when an individual takes a wrong loan/credit with a high interest rate without considering his other expenses. The catch is to understand which loan to take so that you don't end up in a debt trap. Effectively managing your loan portfolio ensures you are debt-free sooner and saves money. Managing your loan portfolio efficiently ensures repayments without defaulting. So here we will discuss a few tips which can help you lead a stress free life despite being a borrower.Take Only Two Credit CardsIndian banks have suffered credit card delinquencies. Between December 2012 and February 2013 the outstanding have risen by Rs. 700 crores to Rs. 25,500 crores. The defaulters or delinquents suffer from a bad credit health as a result. Hence, it is advisable to apply or subscribe to not more than two credit cards. These should only be used only if the user is able to pay the total amount due by the time of the due date to avoid fines or excess interest. In case, if one pays just 5 per cent or the minimum amount due the rest is payable at above 40 per cent increasing the financial burden. One should also avoid taking credit card loans.Credit cards are for the customer's convenience but it is the user's responsibility that he should use it consciously and up to the limit where he can pay back 100 per cent on due date and enjoy its rewards and cash backs.Education LoanIdeally the first loan that a person should go for is an education loan and that too for a reputed institute or college. An education loan should be avoided for non-reputed colleges. So if you covet that top notch MBA institute, but lack the finances, go for that loan.Home LoanTaking a home loan not only saves tax but also creates asset. While applying for this loan one should ensure that the EMI is less than 30 per cent of the borrowers' total income. Buying an expensive house/property which takes away 50-60 per cent of the income in EMI is not desirable and should be avoided. Always go for a property within your budget. Car LoanA car has become a necessity in today's time. With the market flooded with new models every month suiting all budgets it's understandable that an individual wants to opt for a 4-wheeler. While going for a car loan, it should be ensured that the EMI of the loan doesn't exceed 10 per cent of the total salary. An individual with a Net salary of Rs. 30,000 should not opt for a car which will make him pay an EMI of more than Rs. 3000. Settle for a car slightly lower than your budget as car brings in additional expenses like fuel, insurance, maintenance etc which can trouble your budget. Moreover it is a liability and not an asset.Personal LoanA Personal loan should be avoided as far as possible. It's advisable to go for one only in case of dire need as personal loans tend to serve up a higher interest rate. Do not take this loan to go for a holiday or to buy gadgets etc. Taking a personal loan for investment purpose hasn't worked for nearly 95 per cetn of the people and chances are it won't work for you either. Loans and credit expenditures which are done with proper planning and thought will do you better than harm. Let's revise some mantras to follow while planning out your credit:Follow a life which gives you a credit card at 25Pay 100 per centTake a home loans when above 30 years with an EMI percentage of 30-35 per centTake a car loan whose EMI isn't more than 10 per cent of your salary.Any further loans should be avoided. Investing in health insurance and other insurances will protect you and your family in times of need and also help you stay away from borrowing at such times.
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For a coal producer trying to navigate India's complex federal structure, size matters. And the smaller the better.That harsh lesson was learnt by S. Narsing Rao, the outgoing chairman and managing director of Coal India Ltd, the world's biggest coal miner. While Rao has been at the helm in the past two years, Coal India has missed its annual output targets.But in the six years before that, Rao led Singareni Collieries and the company beat output targets every year. Even though it is India's second-biggest coal producer, it is small compared with Coal India. In the fiscal year ended March 31, it produced a tenth of Coal India's 462 million tonnes.Some experts say India needs more small and nimbler companies like Singareni, rather than monoliths like Coal India, to narrow its crippling supply shortfall - forecast to more than double to 350 million tonnes by 2016-17.The inability of Coal India - accounting for 80 per cent of the country's coal output - to raise production fast enough has made India the world's third-largest coal importer despite sitting on the fifth-largest reserves.That is forcing new Prime Minister Narendra Modi to explore drastic remedies like a break-up of the company, sources say.The key reason Singareni can meet its targets lies in the ownership of the two companies, Rao says.While Coal India is majority owned by the central government, Singareni is controlled by Telangana. Since the central government can do little without the consent of the states, it is easier for the likes of Singareni to acquire land for mining, access infrastructure such as railways and get environment approvals.Land acquisition and access to railways are the two most important factors for boosting coal production."Coal India, being a federal company, is somehow not proving to be very successful in influencing state governments and district administrations to positively respond to our requests. That is the challenge," Rao told Reuters."Singareni being a state government company, it is much easier to do that."State resistance has, for instance, hampered Coal India's plans to build railway lines connecting remote mines. Rao has said previously that better transport connections could raise the company's output by 300 million tonnes per year.Rao has quit Coal India to join the government of Telangana, a new state formed this month through the division of Andhra Pradesh.Coal India's 370,000 highly unionised workforce has resisted attempts to introduce new technologies, fearing job losses.In contrast, Singareni, with a workforce of around 62,800, is using state-of-the-art technologies, having pioneered mechanisation of coal mines in India way back in 1937 using coal-drilling machines.Coal India's productivity, measured in output-per-man-shift, was 4.92 tonnes in 2011/12, below a target of 5.54, according to the last available Planning Commission figures. For Singareni, which digs out a higher percentage from underground mines that are harder to operate than open-cast mines, productivity was 3.80 tonnes, above a target of 2.67.Singareni Chairman Sutirtha Bhattacharya said Telangana has promised the company full co-operation, which would spur it to a record production of 54.5 million tonnes this fiscal year from about 50 million in the previous year to end-March. A tenth of India's coal reserves of about 293.5 billion tonnes is estimated to be in Telangana.Should Modi decide to open up the nationalised coal sector, Singareni-like small companies could be a better fit for local as well as foreign investors. President Pranab Mukherjee said last week that reforms in the coal sector will be pursued with urgency to attract private investment.Reuters reported last month the government was exploring spinning off some of the eight units of Coal India into independent firms, making respective state governments equity holders to help speed up land acquisition.A smaller firm has some advantages, says Dipesh Dipu, partner with Jenissi Management Consultants."You have better control of operations," Dipu said.Hurdles To GrowthCoal India was formed in November 1975 as a holding company. It operates mines in Jharkhand, Odisha, Chattisgarh and West Bengal states. The company's sales by volume are almost twice those of industry No.2 Peabody.Fast-tracking growth at a company of that size won't be easy.Credit Suisse analysts wrote in a note that despite the resounding election victory of Modi's Bharatiya Janata Party (BJP), governments in Odisha, West Bengal and Jharkhand are "likely to stay non-BJP for several years, potentially hindering centre-state co-operation".And unions representing Coal India's workers plan to oppose any move to split the company or divest stakes as many jobs could be on the line, said D.D. Ramanandan, vice president of the All India Coal Workers Federation."We know for sure this government will try hard to restructure Coal India," Ramanandan said. "But once we come out on the streets, neither Modi nor BJP will be able to save the country from falling into darkness."(Reuters)
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The price of domestic LPG cylinders will not be increased and the number of subsidised refills given to consumers would continue, Union Petroleum Minister Dharmendra Pradhan said on Friday (13 June)."LPG will be provided to the consumers at the same rate at which it is being made available now. No additional burden will be imposed on them. The subsidy and the number of subsidised cylinders that people are getting will be continued by our government," Pradhan told reporters here.About petrol and diesel prices, he said these are big issues and the central government is paying attention to them."Petrol prices have been out of control since 2006 when it was connected to the market price mechanism. Diesel prices are still under control with subsidies."There is a need to increase oil and gas production in the country. The policy should be such that neither the government nor the farmers and poor should feel burdened," the minister said.Pradhan, who is scheduled to take stock of the oil and gas situation in Bihar at a meeting with Indian Oil Corporation officials during the day, expressed concerns over the low LPG penetration in the state, which is 26 per cent as compared to 45-50 per cent in others.At the meeting, the condition of Barauni refinery in Bihar would be reviewed, besides the status of the proposed gas pipeline between Haldia to Jagdishpur.Low LPG penetration will also be reviewed, he added.(PTI)
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