Companies & Sectors
E-auction of imported gas for idle power plants from Tuesday

Imported RLNG will be made available at a reduced price under the scheme

 

E-auction for allocation of imported regasified liquefied natural gas (RLNG) under the power ministry's scheme for gas-based power plants is set to begin on Tuesday, the government announced.
 
"E-auction process for Power System Development Fund (PSDF) support under the Scheme for Utilization of the Stranded Gas-based Generation Capacity will start Tuesday, 12th May at 11 a.m.," the power ministry said in a statement here on Monday.
 
On May 12, the reverse e-auction will be held for stranded gas-based power plants and on May 13, the reverse e-auction for plants receiving some domestic gas and running at sub-optimal levels, it added.
 
Imported RLNG will be made available at a reduced price under the scheme. Besides, the reverse bidding process will determine a tariff subsidy, which will be released to power plants through the PSDF.
 
The Cabinet Committee on Economic Affairs (CCEA) in March allowed gas imports by way of e-auctions for 31 gas-based power units, with a capacity of 14,000 MW, lying idle for lack of feed stock.
 
"The additional generation would help light up many unconnected households in the country, besides benefiting the public at large, including farmers and poorer sections of the society who have limited access to electricity," the CCEA communique had said.
 
"This decision will also help improve grid stability and safety, as gas-based plants are ideal for being used as spinning reserve, and for meeting peaking power requirements, as they can be started and shut down at very short notice," it said.
 
Power and Coal Minister Piyush Goyal told reporters that GAIL and GSPL (Gujarat State Petronet Ltd) will be permitted to import gas by purchasing on a spot basis from the international market and supply to companies, who can bid for this gas depending on their requirements.
 
"The bidding process will be reverse bidding, where companies can bid for this gas for up to 30 percent of their plant load factor (PLF)," he added.
 
Explaining the reverse bidding to keep down power tariffs, Goyal said: "We could start the bidding at around Rs.5.50 a unit and then see if we can go lower depending on the international gas prices."
 
The need for this intervention has arisen because discovery of natural gas in the Krishna-Godavari basin, notably from the blocks awarded to Reliance Industries, had raised expectation of considerable increase in the availability of domestic gas in the country.
 
Accordingly, a large number of gas-based plants were set up by developers, some with firm allocation and others with expected allocation. But the supply of domestic gas to them started declining since 2012 and stopped from March 2013.
 
Since then, these plants have either stopped operating or being under-utilized.
 
Out of 24,150 MW gas-grid-connected power generation capacity in the country, 14,305 MW of capacity has currently no supply of domestic gas and may be considered as stranded.
 
"This represents an investment of over Rs.60,000 crore which is at the threshold of becoming non-performing assets. The balance capacity of 9,845 MW involving an investment of over Rs.40,000 crore is also working at a sub-optimal level," CCEA said.
 
Rating agency CRISIL said in a statement on Monday that the success of the scheme will hinge on the ability of power plants that are allocated the imported RLNG to find buyers for their electricity.
 
"That's because, as per the scheme, the net sale price of electricity to distribution companies (discoms) has been fixed in the Rs.4.7 to Rs.5.5 per unit band, well above current average prices in a market plagued by low demand," it said.
 
"It is also higher than the average Rs.3.5 to Rs.4.5 per unit that discoms paid last fiscal," CRISIL added.
 

User

Lok Sabha passes bill to repeal old appropriation acts

The Appropriation Acts (Repeal) Act, 2015, was passed by the house with a voice vote

 

The Lok Sabha on Monday passed a bill that seeks to repeal 758 appropriation acts including those pertaining to railways passed from 1950 to 2012.
 
Replying to the debate on the bill, Law Minister D.V. Sadananda Gowda said that "automatic repeal clause" has been included in the bill and the appropriation act of 2013 will get repealed in 2016.
 
"This is a step for putting to death to acts which have become dysfunctional," he said.
 
The Appropriation Acts (Repeal) Act, 2015, was passed by the house with a voice vote.
 
The statement of objects and reasons of the bill states that it has been prepared to repeal 758 appropriation Acts (including appropriation (railway) acts) enacted by parliament during the period 1950 to 2012, which include 111 state appropriation acts enacted by parliament from 1950 to 1976.
 

User

Modi & Manmohan: 1 Year, spot the differences

In seven of 12 indicators evaluated by IndiaSpend, the data reveal a similar trend - a reasonable economic performance after an economic downturn

 

The economy rebounded; exports and imports declined, foreign-exchange reserves grew; coal production, electricity generation and petroleum consumption rose, non-performing assets (NPAs) in banking soared.
 
There are great similarities between Prime Minister Narendra Modi's first year in office - which he completes on May 26 - and the corresponding first year of his predecessor, Manmohan Singh's last term.
 
In seven of 12 indicators evaluated by IndiaSpend, the data reveal a similar trend - a reasonable economic performance after an economic downturn. 
 
The large variations in the first-year period centre on:
 
Industrial production: In Modi's first year, the index of industrial production (IIP) for eight core sectors (coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity) grew 5 percent during 2014-15 against 4.2 percent the previous year. In Singh's first year, the IIP for six core industries (crude oil, refinery products, coal, electricity, cement and finished carbon steel) grew 10.4 percent, compared to 2.8 percent in the previous year 2008-09.
 
Exports and imports: In terms of dollars, exports and imports declined 2 percent and 0.5 percent, respectively, in 2014-15 from 2013-14. In Singh's first year (of his second term) exports and imports declined far more sharply, 4 percent and 5 percent, respectively, in 2009-10 compared to 2008-09.
 
Nuclear energy: With the commissioning of the Kudankulam Unit-1 of 1,000 mw in Tamil Nadu during December 2014, India's installed nuclear capacity reached 5,780 mw in 2014-15 from 4,780 MW in 2013-14, an increase of 21 perccent. In 2009-10, it was up 10.6 percent from the previous year.
 
Direct comparisons are difficult, considering that Singh was in his second term in office. Modi carries Singh's economic legacy, which worsened considerably by the end of the term, attributed by observers to a global downturn and misgovernance.
 
But these indicators offer a broad statistical evaluation of the first years of Modi and Singh during UPA2.
 
A journey through the numbers
 
Economic Growth: Overall gross domestic product (GDP) growth in 2009-10, at constant prices, was reported to be 8.9 percent. After a change in calculation and base year, GDP growth isestimated to be 7.4 percent for 2014-15.
 
Agriculture: Agriculture, which employs about 600 million Indians, registered growth of 1.1 percent in 2014-15 compared to 0.8 percent during 2009-10. The numbers indicate a long-standing - and worsening - crisis.
 
Foreign-exchange reserves: Forex reserves increased 12 percent from $341 billion at the end of 2014-15 as compared to $304 billion at the end of 2013-14. For Singh in UPA2, they increased 5.4 percent from $241.7 billion at the end of 2008-09 to $254.9 billion in 2009-10.
 
Coal: Coal from India's mines increased 8.2 percent in 2014-15, later falling into a controversy over botched allotments, one of the reasons for the decline in UPA2's image. In 2009-10, production increased 8.1 percent. Performance of the coal sector is expected to improve with the re-allotment of 67 coal blocks through an auction, although Modi's figure of Rs.2 lakh crore ($31.25 billion) windfall is now contested.
 
Petroleum: In 2014-15, consumption of petroleum products (diesel, petrol, LPG and the like) increased 3.1 percent, compared to 3.2 percent during 2009-10. India's demand for petroleum products is expected to grow 3.3 percent in the next financial year, according to the oil ministry.
 
Electricity: A good indicator of an economy's health, installed electricity capacity in 2014-15, rose 10 percentagainst 2013-14. In 2009-10, it increased 7.7 percent over the previous year.
 
Renewable energy: With pressure on India to cut carbon emissions renewable energy - it is responsible for 12 percent of India's total installed power - growth rates were high during both terms. The total installed capacity of renewable energy reported a 7.56 percent growth in 2014-15 and growth of 17.20 percent in 2009-10.
 
Non-performing assets: NPAs of public sector banks increased 17 percent from Rs.2.27 lakh crore in March 2014 to Rs.2.73 lakh crore in December 2014, a carry-over from UPA2. Public sector bank NPAs had increased 23 percent in 2009-10 over the previous year. NPA growth rates of this magnitude can destabilise the banking system.
 

User

COMMENTS

Chandragupta Acharya

2 years ago

Given that govt policies affect the real economy with a lag, such comparison does not make much sense

tikku

2 years ago

The difference is that prices have soared so high that por people cannot even eat properly. We cursed MM but now we all appreciate old days---

N R KANNAN

2 years ago

Why not try comparing with best year of UPA instead 6th year? Way to go! Meaningless article indeedf! Should have been a comparison of 2013-14 with 2014-15 for proper assessment, instead what we have hear is passing off 6th year of UPA as though it was first year. What did it inherit in 2004? And was 2014 same as 2004?. Clearly agenda driven!

N R KANNAN

2 years ago

Why not try comparing with best year of UPA instead 6th year? Way to go! Meaningless article indeedf! Should have been a comparison of 2013-14 with 2014-15 for proper assessment, instead what we have hear is passing off 6th year of UPA as though it was first year. What did it inherit in 2004? And was 2014 same as 2004?. Clearly agenda driven!

Anand Doctor

2 years ago

The most important part of the article:

"Direct comparisons are difficult, considering that Singh was in his second term in office. Modi carries Singh's economic legacy, which worsened considerably by the end of the term, attributed by observers to a global downturn and misgovernance."

Just like we don't annualise and compare returns of equity funds after one month, it would perhaps be more prudent to compare the above 2 after one full term...

REPLY

srinivas

In Reply to Anand Doctor 2 years ago

I thought they were comparing Modi's 1st year with Manmohan's 1st year in office. No, they are comparing Modi's first year with Manmohan's 6th year. I would have expected this from MSM, but not Moneylife.Looks like Moneylife is quickly catching up with MSM on misleading articles.

tikku

2 years ago

I expected nothing else. All political parties will do the same, or one may say,--it is not the achievement by the Govt, It is by the people. Therefore, Govt must work for the people and not for themselves/votes. People will do better if environment is conducive.

tikku

2 years ago

I expected nothing else. All political parties will do the same, or one may say,--it is not the achievement by the Govt, It is by the people. Therefore, Govt must work for the people and not for themselves/votes. People will do better if environment is conducive.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)