Chennai: The Prime Minister's economic think tank today said autonomy of the regulators should not be affected by the mechanism to resolve disputes between watchdogs, a comment that comes in the wake of the Reserve Bank of India's (RBI) apprehensions over the loss of freedom under such a set up proposed by the finance ministry, reports PTI.
"We need to find an effective mechanism to resolve if dispute arises between regulators. I think every care should be taken to ensure that the autonomy is no way affected", said C Rangarajan, chairman of the PM's Economic Advisory Council (PMEAC).
On turf war between market regulator Securities and Exchange Board of India (SEBI) and insurance watchdog Insurance Regulatory and Development Authority (IRDA), he suggested an effective mechanism for resolving 'disputes' between market regulators.
SEBI and IRDA were engaged in a public spat over regulation of Unit Linked Insurance Products (ULIPs), with both coming out with contradictory orders.
Later, the government gave the regulation of ULIPs to IRDA through an ordinance that also provided for a joint mechanism between the finance ministry and financial regulators to sort out disputes over hybrid products.
However, RBI had expressed reservations that the ordinance may curtail the autonomy of regulators as disputes are currently handled by high level coordination committee headed by the central bank, while the proposed authority was to be chaired by the finance minister.
While tabling the bill, which was later passed by the Lok Sabha to replace the ordinance, finance minister Pranab Mukherjee allayed fears of RBI that regulators' autonomy will encroached through the joint mechanism.
"It was true there were lots of apprehensions whether we are going to dilute the regulators' independence or autonomy.
It will only be in the case of jurisdiction disputes between the regulators that the joint mechanism will be used," Mr Mukherjee had said.
Mr Mukherjee further assured that the joint mechanism will not deal with other areas and only the regulators can refer the matter of jurisdiction to the committee.
The bill also elevated the position of the RBI governor to vice-chairman in the joint body, whereas the ordinance made him just a member along with other financial sector regulators.
Earlier, addressing the conference Mr Rangarajan called for initiatives that would bring significant surge on the micro-finance sector.
He said as the Committee on Financial Inclusion had recommended, there was a need to recognise a separate category for "micro-finance-non-banking finance companies (MF-NBFCs)".
"This should be done without any relaxation on the start up capital. They should also be subject to all the regulatory prescriptions as applicable to NBFCs," he said.
New Delhi: The government is considering putting up a fertiliser plant in the gas-rich Gulf region to bridge the demand-supply gap, reports PTI.
"Various proposals are under consideration in the Middle East for exploring the possibility of putting up an ammonia-urea fertiliser plant in countries like Oman, Saudi Arabia, Qatar and Kuwait", minister of state for chemicals and fertilisers Srikant Kumar Jena said in a written reply to the Rajya Sabha.
A fertiliser-deficit nation, India generally imports one-third of its total fertiliser requirement for a year. It will have to import more than 11.6 million tonnes of fertiliser to meet its domestic demand for the current kharif season, ending September, which includes 30 lakh tonnes of urea. Domestic urea production caters only 70% of the total requirement.
India had produced 21.1 million tonnes urea, 4.2 million tonnes DAP and 8 lakh tonnes complex fertilisers in 2009-10.
"The government is continuously following-up the issue of availability of gas with the competent authorities in the respective nations", Mr Jena said.
The minister, however, added that so far no country in the Gulf region has given confirmation about supply of gas at affordable price.
Failed to attract the desired investment in the sector, the government had announced New Investment Policy, 2008.
Following that, investments worth Rs24,000 crore were committed by six fertiliser firms, but could not be carried forward as the units were seeking firm gas allocation at a pre-determined price or insulation from additional liability due to price rise.
New Delhi: The government plans to sell 5% of its stake in Oil and Natural Gas Corporation (ONGC) and 10% in Indian Oil Corporation (IOC) to raise about Rs21,000 crore this fiscal, reports PTI oil secretary quoting S Sundareshan.
"We have received a note from Department of Disinvestment (DoD) that says they have approval of the finance ministry for divestment of government stake in ONGC and IOC," he told PTI.
The proposal, he said, is for sale of 5% or 10.6 crore equity shares in ONGC through a follow-on public offer (FPO) which at today's trading price of Rs1,233.25 would fetch the government Rs13,189 crore.
In IOC, DoD has proposed to sell 10% of government equity through an FPO.
"Simultaneously, IOC also proposes to sell 10% of the expanded equity capital (through an FPO) to raise funds for its expansion plans," he said.
Post stake sale, the government's shareholding in ONGC will come down to 69.14% from 74.14% currently. In IOC, the twin divestment and stake sale would reduce the government holding from 78.92% to 64.57%.
"We are not preparing any Cabinet note. It is the Department of Disinvestment which will do that. We only have to seek approval (for the stake sale) from the (oil) minister (Murli Deora)," Mr Sundareshan said.
According to the road map being prepared, IOC would be the first to be disinvested. It will first sell 10% or 24.27 crore equity shares that at today's stock price of Rs363.90 would fetch the company Rs8,835 crore to help it part-finance its capital expenditure programme of Rs75,000 crore.
This would be followed sale of 10% government holding amounting to 19 crore shares to raise Rs7,000 crore.
IOC has written to the oil ministry expressing its interest in raising money from the market for its capital investment requirement.
The nation's largest oil marketing firm wants to take advantage of the recent government decision to free fuel prices by tapping the capital markets.
The government had in June decontrolled petrol price that resulted in a Rs3.50 per litre hike in rates in Delhi. Also, diesel prices were hiked by Rs2 per litre, domestic liquefied petroleum gas (LPG) by Rs35 per cylinder and Rs3 a litre on kerosene.
Despite the June move, IOC currently loses Rs2.76 a litre on diesel, Rs170.57 per cylinder on LPG and Rs15.41 a litre on kerosene and is estimated to lose Rs31,770 crore in revenues this fiscal.