Private, foreign investment in oil exploration at $10.30 billion till Jan 2010

The government has said that production of natural gas has increased 75% over 2008-09 and is expected to double in the near future

India has attracted $10.30 billion (about Rs46,000 crore) of private and Foreign Direct Investment (FDI) in the oil & gas hunt till January this year since the advent of the New Exploration and Licensing Policy (NELP), reports PTI.

Replying to a question in the Lok Sabha, Jitin Prasada, minister of state for petroleum and natural gas, said that natural gas production in India has increased 75% compared to 2008-09 and is expected to double in the near future.

Asked why companies were not coming forward to participate in the NELP, the minister said, “The policy (NELP) is very clear, most transparent and best in the world and this sometimes discourages foreign or private companies.”

He, however, hailed the participation of as many as 36 companies including domestic private firms, MNCs and PSUs in the 8th round of the NELP, saying that it was “good as it happened at a time when the entire world was reeling under a downturn.”

He did not share the view that PSUs were inefficient in exploration of oil fields whereas the private sector has succeeded.

“PSUs may some times relinquish a block not because they have not found oil, but due to the fact that they may have discovered oil in some other blocks,” he said. He added that this being a very capital-intensive industry, firms take the final decision keeping viability in mind.

Mr Prasada defended the policy of private sector participation, saying that India needs investment and the best technology. “We want these companies to come and have ensured a level playing field between public and private sector firms,” the minister said.


IMF supports India’s tightening of monetary policy

The global entity has said that the country’s challenge lies in ensuring durable fiscal consolidation, including implementation of structural reforms

The International Monetary Fund (IMF) has said that the tightening of monetary policy by India is an “appropriate step,” as the country is faced with high inflation and needs to consolidate the fiscal measures initiated during the slowdown, reports PTI.

“India is relatively more closed, and has relied on stimulus to support growth. The main challenge will be to ensure durable fiscal consolidation, including implementing fiscal and other structural reforms,” Abdul Abaid, senior economist in the World Economic Studies Division of the IMF, said at a news conference held at its headquarters.

He said that in relation to other countries in the Asian region, India has high inflation, and the tightening of monetary policy currently under way is appropriate.

Referring to the latest World Economic Outlook, he said in India, growth is projected to be 8.8% in 2010, and 8.4% in 2011, which is supported by rising private domestic demand.

“Consumption will strengthen as the labour market improves, and investment is expected to be boosted by strong profitability, rising business confidence, and favourable financing conditions,” he said.

In India’s neighbourhood, Nepal's real GDP growth is expected to slow to 3% in 2009-10 from 4.7% in 2008-09 due to poor monsoon and softer remittances, but growth is anticipated to strengthen again in 2010-11, said the IMF official.

For Sri Lanka, the IMF projects acceleration in growth from 3.5% last year to 5.5% this year.

“There is currently an IMF programme, which we can't comment on; the key priority in Sri Lanka is basically to obtain a credible and sustainable reduction in the fiscal deficit going forward. That is the main vulnerability there right now,” he said.


Finally, money from education cess to be spent on various schemes

The government has collected Rs8,334 crore so far as secondary and higher education cess from 1 April 2007

After lying unspent for three years, the money collected from the proceeds of the higher education cess would now be utilised for several schemes, including setting up of a finance corporation and for strengthening IITs and IIMs, reports PTI.

The government has collected Rs8,334 crore so far as secondary and higher education cess from 1 April 2007. However, this money has remained unspent and is lying with the finance ministry, official sources said.

The HRD ministry has drawn up a plan to utilise the money by creating a single and non-lapsable corpus fund for secondary and higher education.

Part of the money will be utilised for the proposed National Higher Education Finance Corporation (NHEFC) which will be mandated to provide concessional loans to higher educational institutions.

There are also plans to provide funds from this cess amount towards new Indian Institutes of Science, Education & Research, IITs and IIMs. Besides, a part of the money will be spent on the newly-launched ‘Rashtriya Madhyamik Siksha Abhiyan’ scheme for secondary education.

A proposal to this effect will be moved before the Cabinet soon, sources said.

As per the HRD ministry’s plan, the proposed NHEFC will be an institutional mechanism to address investment needs in the higher education sector.

The proposed corporation will provide loans at concessional rates for establishment of higher and vocational institutions in educationally backward areas. It will raise debt by issue or sale of bonds for augmenting resources from the market. The corporation will finance creation of universities.


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