“On the one hand, we (advocate) freedom to price gas on an arm’s length basis. But on the other hand we also say that (companies) must allocate gas according to the government’s priorities,” Planning Commission deputy chairman Montek Singh Ahluwalia said
New Delhi: Planning Commission deputy chairman Montek Singh Ahluwalia has criticised the current gas pricing methodology where producers are asked to ‘discover’ market price of the fuel by calling bids from consumers identified by the government, reports PTI.
“We should decide now ab intio what should be the price of natural gas. What should be the principles, which should be applied,” he said at the launch of the book, ‘Natural Gas in India: Liberalisation and Policy,’ written by Anil K Jain, a senior bureaucrat and former joint secretary-exploration in the oil ministry.
“On the one hand, we (advocate) freedom to price gas on an arm’s length basis. But on the other hand we also say that (companies) must allocate gas according to the government’s priorities,” he said citing example of fertilizer sector which can “bid for whatever price” because their input cost is pass through.
Urea-making fertiliser plants have been accorded top priority in allocating domestic natural gas by the government.
The country, he said, “must internalise real cost of energy” while subsidy should be determined separately.
“I am not aware that any of the existing model (for pricing of gas) meet the test of economic rationality,” he said.
Speaking of the formula which formed the basis for fixing the price of $4.2 per million British thermal unit for the gas produced by Reliance Industries (RIL) from KG-D6 block, Mr Ahluwalia said: “Under which circumstances that formula should be determine the price of gas.”
“These are very big decisions and the government has to take informed view on that. It is very easy to say that particular formula does not have much rationality, but then it is quite difficult to propose what the formula should be in future. The whole issue of energy is quite crucial,” he said.
Mr Ahluwalia advocated freeing of natural gas pricing. The Planning Commission has also advocated the market determined energy price in its Integrated Energy Policy which was approved by the Union Cabinet.
Speaking on the occasion, Cairn India CEO Rahul Dhir said taxation system in the country was discriminatory as crude oil producers enjoyed a seven-year holiday from payment of income tax while the same was not available for natural gas producers.
He said energy explorers had no control over what is discovered when a well is drilled and it may turn out that a well may contain both oil and gas and therefore there was an urgent need to end the discrimination between crude oil and gas for tax purposes.
Mr Jain’s book contains comprehensive discussion of the current status of India’s gas sector, including medium to long term outlook for demand and supply.
The net direct tax mop-up during the April-January period rose 9.28% to Rs3.46 lakh crore; however, the government may miss the full year direct tax collection target of Rs5.32 lakh crore which envisaged a growth of 19% over the last year
New Delhi: With the direct tax collection growing at a slower pace of 9% this fiscal so far, the government is likely to miss the revenue mop-up target for the 2011-12, reports PTI.
According to the data released by the finance ministry, the net direct tax mop-up during the April-January period rose 9.28% to Rs3.46 lakh crore mainly on account higher realisation of personal income tax and corporate tax.
The government, however, may miss the full year direct tax collection target of Rs5.32 lakh crore which envisaged a growth of 19% over the last year.
The net direct tax collection was Rs3.17 lakh crore in the 10 month period of the 2010-11 fiscal.
The slow growth in direct tax collection comes on the back of declining gross domestic product (GDP) growth rate which is estimated at 6.9% in 2011-12, down from 8.4% a year ago.
The gross direct tax collection during the April-January period, however, was up by 14.57% at Rs4.25 lakh crore. It was Rs3.71 lakh crore in the corresponding period a year ago.
Amid slowdown in industrial activities due to global factors and high domestic interest rates, revenue collections have come under pressure.
As per the official data, gross corporate tax collection was up 12% at Rs2.85 lakh crore in April-January from Rs2.55 lakh crore in same period in the previous fiscal.
The personal income tax collection in the 10 month period of the current fiscal was up by 20.43% at Rs1.38 lakh crore.
The growth in wealth tax was 45.11% at Rs682 crore against Rs470 crore collected last year.
Amid volatility in the stock market, the securities transaction tax (STT) declined by 27.19% at Rs4,145 crore. The STT mop-up was Rs5,693 crore in the year-ago period.
With only two months of the fiscal remaining, the government will have to add Rs1.86 lakh crore to its tax kitty to meet its budget estimates, which experts say is a tough task.
Even finance minister Pranab Mukherjee had said last week that he is exerting pressure on revenue officials to improve tax realisation to meet the total tax (direct + indirect) collection target of Rs9.32 lakh crore.
“I am putting pressure on my colleagues in the CBEC, CBDT ...and on my behalf secretary (revenue) is continuously breathing (down) their neck to improve revenue because our demand and requirement is much more,” he had said.
The government needs maximum revenue to contain the widening fiscal deficit, which is likely to shoot up due to higher subsidy bill and poor disinvestment receipts. The government had projected the fiscal deficit at 4.6% of the GDP in 2011-12.
According to the Bank Employees Union, Dhanalaxmi Bank’s business fell down from Rs22,000 crore but it is being camouflaged through inter-bank deposits and other measures
After the resignation of Dhanalaxmi Bank’s chief operating officer and managing director- Amitabh Chaturvedi due to serious issues with the management, a bank employees’ union has appealed for its merger with another public sector bank.
In a release, All India Bank Employees Association (AIBEA) stated that, “Dhanalaxmi Bank’s total business of around Rs22,000 crore has slipped down but the same is being camouflaged by inter bank deposits and other cosmetic measures. There are also reports the Bank may not show profit for this quarter. It is also learnt that sensing these developments, some of its customers have withdrawn their deposits and it is also reported that even Mr Chaturvedi who resigned as MD has withdrawn his family deposit of around Rs5 crore from the Bank.”
Sources say that the bank is facing liquidity problems and may report financial losses of about Rs30 crore. However, the lender is not in serious trouble, the sources added.
According to the AIBEA, the management’s decision to convert the lender into an ambitious and modern bank impacted its financial performance. The Union also accused the bank for appointing officials with huge remuneration unrelated to the capacity or performance of the bank.
Moneylife was the first one to report the bruising battle between Dhanlaxmi Bank and its union. The All-India Bank Officers Confederation (AIBOC) alleged that the bank has manipulated accounts and provisioning, has a mismatch in asset-liability resources, maintains poor capital adequacy ratio and has huge dependence on call money borrowing. It has also accused the bank for ignoring social banking and financial inclusion.
Last year in November, the Reserve Bank of India (RBI) conducted an inspection and issued a 15-point Monitorable Action Plan (MAP) to Dhanlaxmi Bank. This was followed by the furore caused due to a memorandum sent by the All India Bank Officers’ Confederation to the RBI stating the weak financials and certain wrongdoings by the bank.
As per the MAP, Dhanlaxmi Bank should moderate its loan growth, year-on-year, to 25% for 2011-12, should not be dependent on portfolio buyouts and should focus on increasing its direct advances. It has asked the bank to improve its earnings ratio and cash-income (efficiency) ratio to 70% by March 2012 from its current 83.73% during 2010-11. (Read more...RBI directs Dhanlaxmi Bank to adhere to its action plan)