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GS Paper: GS3-13.Infrastructure: Energy, Ports, Roads, Airports, Railways etc:

  • GST Council not for inclusion of Petroleum Products

    The Goods and Services Tax (GST) Council has decided to keep petroleum products out of the GST regime.

    Present taxation of Fuels

    • Currently, taxes on petroleum products are levied by both the Centre and the states.
    • While the Centre levies excise duty, states levy value added tax (VAT).
    • For instance, VAT on petroleum products is as high as 40% in Maharashtra, contributing over ₹25,000 crore annually.
    • By being able to levy VAT on these products, the state governments have control over their revenues.

    Impact of inclusion of fuel under GST

    • If petroleum products are included under the GST, there will be a uniform price of fuel across the country.
    • However, petroleum products coming under GST not necessarily means that taxes or prices will come down.
    • If the GST council decides to opt for a lower slab, taxes may come down.
    • At present, India has four primary GST rates – 5 percent, 12 percent, 18 percent and 28 percent.
    • Levying a standard rate of GST on petrol would mean that the prices increase dramatically in Andaman and Nicobar, but on the flip side, they would fall in Maharashtra if the cumulative rate is lower than the current rate.

    Key takeaways from States VAT

    • Among the states, Rajasthan levies the highest tax across the country keeping VAT on petrol at 36 percent, followed by Telangana at 35.2 percent.
    • Other states with more than 30 per cent VAT on petrol include Karnataka, Kerala, Assam, Andhra Pradesh, Delhi and Madhya Pradesh.
    • On diesel, the highest VAT rates are charged by states like Odisha, Telangana, Rajasthan and Chhattisgarh.
    • So far, five states, West Bengal, Rajasthan, Meghalaya, Assam and Nagaland have cut taxes on fuel this year.

    Back2Basics: Petroleum Pricing Mechanism

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  • Four-year moratorium for AGR dues

    In big bang reforms, the Union Cabinet approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100% foreign investment through the automatic route.

    What is AGR?

    • Adjusted Gross Revenue (AGR) is the usage and licensing fee that telecom operators are charged by the Department of Telecommunications (DoT).
    • It is divided into spectrum usage charges and licensing fees, pegged between 3-5 per cent and 8 per cent respectively.

    Why is AGR important?

    • The definition of AGR has been under litigation for 14 years.
    • While telecom companies argued that it should comprise revenue from telecom services, the DoT’s stand was that the AGR should include all revenue earned by an operator, including that from non-core telecom operations.
    • The AGR directly impacts the outgo from the pockets of telcos to the DoT as it is used to calculate the levies payable by operators.
    • Currently, telecom operators pay 8% of the AGR as licence fee, while spectrum usage charges (SUC) vary between 3-5% of AGR.

    Why do telcos need to pay out large amounts?

    • Telecom companies now owe the government not just the shortfall in AGR for the past 14 years but also an interest on that amount along with penalty and interest on the penalty.
    • While the exact amount telcos will need to shell out is not clear, as in a government affidavit filed in the top court, the DoT had calculated the outstanding licence fee to be over ₹92,000 crore.
    • However, the actual payout can go up to ₹1.4 lakh crore as the government is likely to also raise a demand for shortfall in SUC along with interest and penalty.
    • Of the total amount, it is estimated that the actual dues is about 25%, while the remaining amount is interest and penalties.

    Is there stress in the sector?

    • The telecom industry is reeling under a debt of over ₹4 lakh crore and has been seeking a relief package from the government.
    • Even the government has on various occasions admitted that the sector is indeed undergoing stress and needs support.
    • Giving a ray of hope to the telecom companies, the government recently announced setting up of a Committee of Secretaries to examine the financial stress in the sector, and recommend measures to mitigate it.

    Issue of lower tariff

    • Currently, telecom tariffs are among the lowest globally, driven down due to intense competition following the entry of Reliance in the sector.
    • The TRAI examines the merits of a “minimum charge” that operators may charge for voice and data services.

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  • Govt. tells utilities to ship in coal as demand surges

    The govt. has urged utilities to import coal despite having the world’s fourth-largest reserves, with several power plants on the verge of running out of fuel due to a surge in power demand.

    Coal Mining in India

    • Coal in India has been mined since 1774 and is now the second fastest mined in the world, producing 716 million metric tons (789 million short tons) in 2018.
    • Due to high demand and poor average quality, India imports coking coal to meet the requirements of its steel plants.
    • Dhanbad city is the largest coal-producing city and is called the Coal Capital of India.
    • State-owned Coal India had a monopoly on coal mining between its nationalization in 1973 and 2018.

    Consumption

    • Coal-fired power accounts for more than 70% of India’s electricity generation. Electricity generation makes up three-fourths of India’s coal consumption.

    Quality of coal

    • The ash chemistry of Indian coal is such that it is high in silica and alumina.
    • The ash is also highly abrasive because of its high quartz content, which can lead to erosion of the syngas cooling system when it gets fused.
    • Indian coal’s sulfur content is low, about 0.5 percent.
    • So, from a gas clean-up perspective, the flue gas desulphurization (removal of SOx gases) and NOx removal system is not economically justifiable and, therefore, not important.
    • Also, in the Indian context, this is unnecessary to meet emission norms.

    Coal reserves

    • India has the fourth-largest coal reserves in the world. It is the second-largest producer of coal in the world, after China.
    • Coal deposits are primarily found in eastern and south-central India.
    • Jharkhand, Odisha, Chhattisgarh, West Bengal, Madhya Pradesh, Telangana, and Maharashtra accounted for 98.09% of the total known coal reserves in India.
    • As of 31 March 2019, Jharkhand and Odisha had the largest coal deposits of 25.88% and 24.76% respectively.

    Imports

    • Coking Coal is being imported by the Steel Authority of India Limited (SAIL) and other Steel manufacturing units mainly to bridge the gap between the requirement and indigenous availability and to improve the quality.
    • Coal-based power plants, cement plants, captive power plants, sponge iron plants, industrial consumers, and coal traders are importing non-coking coal.
    • Coke is imported mainly by Pig-Iron manufacturers and Iron & Steel sector consumers using mini-blast furnaces.

    Try answering this PYQ:

    Which of the following is/are the characteristics/ characteristics of Indian coal?

    1. High ash content
    2. Low Sulphur content
    3. Low ash fusion temperature

    Select the correct option using the codes given below:

    (a) 1 and 2 only

    (b) 2 only

    (c) 1 and 3 only

    (d) 1, 2 and 3

     

    [wpdiscuz-feedback id=”0tm49llrlj” question=”Please leave a feedback on this” opened=”1″]Post your answers here.[/wpdiscuz-feedback]

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  • National Monetization Pipeline

    The Union Finance Minister has launched the National Monetization Pipeline for the brownfield infrastructure assets.

    What is Asset Monetization?

    • Asset Monetization involves the creation of new sources of revenue by unlocking of the value of hitherto unutilized or underutilized public assets.
    • Internationally, it is recognized that public assets are a significant resource for all economies.
    • Many public sector assets are sub-optimally utilized and could be appropriately monetized to create greater financial leverage and value for the companies and of the equity that the government has invested in them.
    • This helps in the accurate estimation of public assets which would help in the better financial management of government/public resources over time.

    National Monetization Pipeline (NMP)

    • The NMP comprises a four-year pipeline of the Central Government’s brownfield infrastructure assets.
    • It will serve as a medium-term roadmap for the Asset Monetization initiative of the government, apart from providing visibility for the investors.
    • Incidentally, the 2021-22 Union Budget, laid a lot of emphasis on Asset Monetization as a means to raise innovative and alternative financing for infrastructure.
    • It has to be noted that the government views asset monetization as a strategy for the augmentation and maintenance of infrastructure, and not just a funding mechanism.

    What is the plan?

    • NMP is envisaged to serve as a medium-term roadmap for identifying potential monetization-ready projects, across various infrastructure sectors.
    • It estimates aggregate monetization potential of Rs 6.0 lakh crores through core assets of the Central Government, over a four-year period, from FY 2022 to FY 2025.

    Objectives of the program

    • NMP aims for universal access to high-quality and affordable infrastructure to the common citizen of India.
    • Asset monetization, based on the philosophy of Creation through Monetization, is aimed at tapping private sector investment for new infrastructure creation.
    • This is necessary for creating employment opportunities, thereby enabling high economic growth and seamlessly integrating the rural and semi-urban areas for overall public welfare.
    • The strategic objective of the programme is to unlock the value of investments in brownfield public sector assets by tapping institutional and long-term patient capital.

    Framework

    The framework for core asset monetization has three key imperatives:

    • The pipeline has been prepared based on inputs and consultations from respective line ministries and departments, along with the assessment of total asset base available therein.
    • Monetization through disinvestment and monetization of non-core assets have not been included in the NMP.
    • Further, currently, only assets of central government line ministries and CPSEs in infrastructure sectors have been included.
    • Process of coordination and collation of asset pipeline from states is currently ongoing and the same is envisaged to be included in due course.

    Estimated Potential

    • The aggregate asset pipeline under NMP over the four-year period, FY 2022-2025, is indicatively valued at Rs 6.0 lakh crore.
    • The estimated value corresponds to ~14% of the proposed outlay for Centre under NIP (Rs 43 lakh crore). This includes more than 12-line ministries and more than 20 asset classes.
    • The sectors included are roads, ports, airports, railways, warehousing, gas & product pipeline, power generation and transmission, mining, telecom, stadium, hospitality and housing.
    • The top 5 sectors (by estimated value) capture ~83% of the aggregate pipeline value. These top 5 sectors include: Roads (27%) followed by Railways (25%), Power (15%), oil & gas pipelines (8%) and Telecom (6%).

    Implementation & Monitoring Mechanism

    • As an overall strategy, significant share of the asset base will remain with the government.
    • The programme is envisaged to be supported through necessary policy and regulatory interventions by the Government in order to ensure an efficient and effective process of asset monetisation.
    • These will include streamlining operational modalities, encouraging investor participation and facilitating commercial efficiency, among others.
    • Real time monitoring will be undertaken through the a separate dashboard.

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  • [pib] Simhadri PV Project: Largest floating Solar Project in the country

    The National Thermal Power Corporation (NTPC) has commissioned the largest floating solar PV project of 25MW on the reservoir of its Simhadri thermal station in Visakhapatnam, Andhra Pradesh.

    Simhadri PV Project

    • The 2000MW coal-based Simhadri Station is the first power project to implement an open sea intake from the Bay of Bengal which has been functional for more than 20 years.
    • This is the first solar project to be set up under the flexibilization scheme of coal-powered plant, notified in 2018.
    • The floating solar installation which has a unique anchoring design is spread over 75 acres in an RW reservoir.
    • This floating solar project has the potential to generate electricity from more than 1 lakh solar PV modules.
    • This would not only help to light around 7,000 households but also ensure at least 46,000 tons of CO2e are kept at arm’s length every year during the lifespan of this project.
    • The project is also expected to save 1,364 million litres of water per annum. This would be adequate to meet the yearly water requirements of 6,700 households.

    Other important facts you must know

    • As of May 2021, India has 95.7 GW of renewable energy capacity, and represents ~ 25% of the overall installed power capacity.
    • The government plans to establish renewable energy capacity of 523 GW (including 73 GW from Hydro) by 2030.
    • India was the world’s 3rd largest renewable energy producer with 38% (136 GW out of 373 GW) of total installed energy capacity in 2020 from renewable sources.
    • Tamil Nadu has the highest installed solar power capacity in India. Kamuthi Solar Power Project near Madurai is the world’s second-largest solar park.

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    Back2Basics: NTPC

    • NTPC is an Indian statutory corporation engaged in the generation of electricity and allied activities.
    • It is incorporated under the Companies Act 1956 and is under the jurisdiction of the Ministry of Power.
    • NTPC’s core function is the generation and distribution of electricity to State Electricity Boards in India.
    • It is the largest power company in India with an electric power generating capacity of 62,086 MW.
    • It has also ventured into oil and gas exploration and coal mining activities.
    • In May 2010, NTPC was conferred Maharatna status by GoI, one of the only four companies to be awarded this status.

  • Places in news: Cattle Island on Hirakud Reservoir

    The Odisha Forest and Environment Department is all set to begin ‘Island Odyssey’ and ‘Hirakud Cruise’ ecotourism packages for tourists to islands inside the reservoir.

    Cattle Island

    • ‘Cattle island’, one of three islands in the Hirakud reservoir, has been selected as a sight-seeing destination.
    • When large numbers of people were displaced from their villages when the Hirakud dam was constructed on the Mahanadi river in 1950s, villagers could not take their cattle with them.
    • They left their cattle behind in deserted villages.
    • As the area started to submerge following the dam’s construction, the cattle moved up to Bhujapahad, an elevated place in the Telia Panchayat under Lakhanpur block of Jharsuguda district.
    • Subsequently named ‘Cattle island’, it’s surrounded by a vast sheet of water.

    Other islands

    • Then there is an “island of bats”, also within the reservoir, just 1 km away from the Debrigarh ecotourism project.
    • It is the habitat of hundreds of bats.
    • Tourists also get a magnificent view of the sunset from the reservoir. ‘Sunset island’ is one of the three stops on the unique boat ride.

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  • What are Oil Bonds?

    The Centre has argued that it cannot reduce taxes on petrol and diesel as it has to bear the burden of payments in lieu of oil bonds issued by the previous UPA government to subsidize fuel prices.

    What are Oil Bonds?

    • Oil bonds are special securities issued by the government to oil marketing companies in lieu of cash subsidy.
    • These bonds are typical of a long-term tenure like 15-20 years and oil companies are paid interest.
    • Before the complete deregulation of petrol and diesel prices, oil marketing companies were faced with a huge financial burden as the selling price of petrol and diesel in India was lower than the international market price.
    • This ‘under-recovery is typically compensated through fuel subsidies allocated in the Union budget.
    • However, between 2005 and 2010, the UPA government issued oil bonds to the companies amounting to Rs 1.4 lakh crore to compensate them for these losses.

    Why do governments issue such bonds?

    • Compensation to companies through issuance of such bonds is typically used when the government is trying to delay the fiscal burden of such a payout to future years.
    • Governments resort to such instruments when they are in danger of breaching the fiscal deficit target due to unforeseen circumstances that lead to a collapse in revenues or a surge in expenditure.
    • These types of bonds are considered to be ‘below the line’ expenditure in the Union budget and do not have a bearing on that year’s fiscal deficit, but they do increase the government’s overall debt.
    • However, interest payments and repayment of these bonds become a part of the fiscal deficit calculations in future years.

    Backgrounder: Deregulation of fuel prices

    • Fuel price decontrol has been a step-by-step exercise, with the government freeing up prices of aviation turbine fuel in 2002, petrol in 2010, and diesel in 2014.
    • Prior to that, the government would intervene in fixing the price at which retailers were to sell diesel or petrol.
    • This led to under-recoveries for oil marketing companies, which the government had to compensate for.
    • The prices were deregulated to make them market-linked, unburden the government from subsidizing prices, and allow consumers to benefit from lower rates when global crude oil prices tumble.
    • Price decontrol essentially offers fuel retailers such as Indian Oil, HPCL or BPCL the freedom to fix prices based on calculations of their own cost and profits.
    • However, the key beneficiary in this policy reform of price decontrol is the government.

    Impact: Loss of consumers

    • While oil price deregulation was meant to be linked to global crude prices, Indian consumers have not benefited from a fall in global prices.
    • The central, as well as state governments, impose fresh taxes and levies to raise extra revenues.
    • This forces the consumer to either pay what she’s already paying, or even more.

    Why are the Oil Bonds in news?

    • As prices of petrol and diesel climb steeply, the Centre has been under pressure to cut the high taxes on fuel.
    • Taxes account for 58 per cent of the retail selling price of petrol and 52 per cent of the retail selling price of diesel.
    • However, the government has so far been reluctant to cut taxes as excise duties on petrol and diesel are a major source of revenue, especially at a time the pandemic has adversely impacted other taxes such as corporate tax.
    • The government is estimated to have collected more than Rs 3 lakh crore from tax on petrol and diesel in the 2020-21 fiscal year.

    The blame game

    • The present government has blamed the UPA regime for its inability to cut taxes.
    • It pointed out that the bonds issued by the Manmohan Singh government have weakened the financial position of the oil marketing companies and added to the government’s fiscal burden now.
    • It is an argument that has been often repeated since 2018.

    What budget documents show

    • Budget documents show that such bonds will be up for redemption over the next few years — beginning with two to be redeemed in the current fiscal year — till 2026.
    • The government has to repay a principal amount of Rs 10,000 crore this year, according to these documents.
    • The government has paid around Rs 10,000 crore annually as interest over the last decade.
    • The government is likely to pay a similar amount of interest for the current fiscal as well.

    Is the issuance of such special securities restricted to the UPA era?

    • Besides oil bonds, the UPA era also saw the issuance of fertilizer bonds from 2007 to compensate fertilizer companies for their losses due to the difference in the cost price and selling price.
    • However, the issuance of such special securities is not limited to the UPA regime.
    • Over the years, the Modi government has issued bank recapitalization bonds to specific public sector banks (PSBs) as it looked to meet the large capital requirements of these PSBs without allocating money from the budget.

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  • Privatizing Indian Railways

    Context

    On July 1, 2020, the Indian Railways launched the formal process of inviting private parties to run trains on the Indian railway system. Hopes of a large participation were belied as there were no bids for nine clusters and only two bids for three clusters.

    Why current model of inviting private players to run trains has failed?

    • Lack of equal relationship: IR wants the capital and technology without giving up control, while the concessioner wants a far more equal relationship to be moderated by a regulator.
    • Constraints on efficient decision-making: IR has imposed constraints that prevent efficient decisions and adopted an organisational design that does not take into account the characteristics and associated risks that will determine outcomes and investment decisions.
    • Lumpiness of investment: The biggest dampener is the lumpiness of investment before a single passenger can be carried.
    • High risk involved: Train sets have to be purchased without really knowing how much traffic the service will be able to attract in the face of rising competition from airlines.
    • IR does not guarantee the investor that, in case the concession fails, it will acquire the train sets.
    • Absence of regulator: The other big dampener is the absence of a regulator for resolving disputes.

    Suggestions

    1) Remove the lumpiness of investment by establishing rolling stock company

    • The central issue is how to align the three interests.
    • 1) India’s need to be capable of designing and manufacturing state-of-the-art rolling stock.
    • 2) IR’s need for private capital participation.
    • 3) Private capital’s necessity of earning a profit.
    • Establish a company to lease rolling stock: The above 3 interests can be aligned provided the lumpiness of investment in train sets can be eliminated by establishing a company that leases rolling stock not only to concessioners but also to IR.
    • The rolling stock company, apart from leasing train sets, can also be the window for bringing in new technology.
    • This will also enable reducing the concession period from 35 years to a more reasonable 10-15 years, bringing in competition.
    •  For starters, IRFC, which is already into leasing rolling stock, can be that company.

    2) Bring in new technology by opening IR’s rolling stock market to international manufacturers

    • There is need to move the rolling stock industry up the industrial value chain and bring about a structural change of the Indian economy.
    • Long term arrangement with suppliers: This can only be brought about by a vision that encourages long-term arrangements with rolling stock suppliers.
    • Open the market for global players: An arrangement that gives access to IR’s rolling stock market is the only way to compel global players to share technology and form joint ventures with Indian companies.

    3) Investment in research

    • Technology transfer requires understanding the critical elements of the technology and absorbing them into the design-production process.
    • This calls for the investment of large sums of money and the involvement of universities, research institutes and national laboratories.

    4) Make changes to attract private investors

    • For attracting private players, the risks for the concessioners needs to be reduced.
    • The period of the concession needs to be reduced to around 15 years.
    • Establish regulator: There is a need to establish a regulator and moderate charges like the amount for the maintenance of tracks and stations.

    Conclusion

    With these changes, the plan may still take off. However, the initiative will remain limited to just running trains if there is no long-term vision.

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  • Why central government schemes for discoms have not worked

    Context

    A recent report of Niti Aayog has assessed the losses of discoms to be about Rs 90,000 crore in 2020-21.

    Central government schemes for discoms

    • In 2001, the Accelerated Power Development Scheme was initiated.
    • This was followed by various other schemes with some differences between them.
    •  The government had launched the UDAY scheme in 2015.
    • UDAY did not involve any monetary assistance to the states, but only promised to help the states in reducing the cost of power through coal linkage rationalization, etc.
    • Recently, the government launched a new scheme with a total outlay of around Rs 3.03 lakh crore.
    • It seeks to improve the distribution infrastructure of the distribution companies (discoms) with the primary intention of improving their financial health.
    • The objective of the scheme is to bring down commercial losses in the range of 12-15 percent and also reduce the difference between the average cost of supply (ACS) and average revenue realized (ARR) to zero by 2024-25.
    • The problem with all these schemes (including UDAY) is that they have not been delivered and the financial position of the discoms has only worsened.

    Why did schemes fail to improve the financial health of discoms?

    • Reduction of loss is a managerial issue: Reduction of commercial losses is not really about improving infrastructure, it is more of a managerial issue.
    • The average loss (inclusive of technical and commercial) is about 22 percent today.
    • But several discoms have losses in excess of 40 percent.
    • It is possible to bring down losses from 40 percent to about 15 percent without any significant investments in infrastructure.
    • Investments, however, would be required to bring down losses further to a single-digit level.
    • The governance issues of the scheme is a complex issue.
    • The two most popular parameters which are monitored are the loss levels and the difference between the ACS and ARR.
    • There are inherent problems with these parameters since they keep fluctuating and it is very difficult to fathom their trend on a quarter-wise basis, rendering the release of funds to be tricky and cumbersome.
    • In the scheme now announced by the government, about 26 parameters will be taken into consideration and assigned a score.
    • For some of the parameters, it may be difficult to assign a score across discoms which may lead to some amount of subjectivity.

    Way forward: Alternate approach

    • Provide transitional financial support: An alternate approach that could be considered by the Centre (in lieu of such assistance schemes) is providing only transitional financial support to all discoms, which are privatized under the private-public partnership mode. 
    •  A transitional support of Rs 3,450 crore spread over five years proved to be exceedingly beneficial in the case of discoms in Delhi.
    • Promote privatization: Since in an earlier policy statement the government had mentioned that privatization of discoms is to be promoted, it would make sense to consider this transitional support as a catalyst.

    Conclusion

    Adopting this approach will ensure that the central government moves away from the micro-management of discoms, which inevitably happens if the release of funds is linked to reform-linked parameters on a quarter-wise basis.

     

  • No fossil fuels as usual

    Context

    The spread and speed of the destruction caused by climate change in recent weeks present our new Minister of Petroleum and Natural Gas with a policy dilemma. The article offers five policy suggestions to deal with the dilemma.

    Energy dilemma facing India

    • The events of the past month all over the world have caught even the most alarmist of climate scientists by surprise.
    • These events brought into sharp relief the reality that there was no option of denying the consequential implications of the use of fossil fuels.
    • However, the dilemma India faces lies in the fact that the Indian economy is heavily dependent on fossil fuels and there is no end in sight to this dependence.
    • Further, India imports approximately 85 percent of its crude oil requirements and is exposed to the volatility of the international oil market.

    Five policy changes needed

    1) Reduce emphasis on domestic exploration

    • Not easy to locate and difficult to develop: A review of the public sector’s exploration and production (EP) track record suggests that whilst India may well be sitting on substantial hydrocarbon reserves, these reserves are not easy to locate and, even when located, difficult to develop and produce on a commercial basis.
    • The government has often compounded this economic challenge by placing administrative limits on marketing by companies and their pricing freedom.
    • High risk and structural softness in the market: The fundamental point is that EP in India is a high-risk activity, and this risk is even greater today because of the longer-term structural softness of the petroleum market.
    • The resources earmarked for exploration can be deployed more productively elsewhere.

    2) Increase productivity of producing fields

    • The ONGC needs to allocate increasing resources to improving the productivity of its producing fields.
    • Low oil recovery rate: The average oil recovery rate in India was around 28 percent that is, for every 100 molecules discovered, only 28 were monetized.
    • This number did not compare well with the global average of around 45 percent for fields of comparable geology.
    • Use technology: The application of enhanced oil recovery (EOR) technology offers a relatively low-risk avenue for increasing domestic production.

    3) Increase strategic reserves

    • We hold currently strategic reserves equivalent to 12 days of imports.
    • The government has approved plans to increase this buffer to 25 days.
    • By comparison, China, the EU, South Korea, and Japan hold between 70-100 days of reserves.
    • A significant portion of our oil imports came from the Middle East, predominantly Saudi Arabia, Iraq, and Iran.
    • This region faces deep political and social fault lines and there is no knowing when our supply lines might get ruptured.
    • We would, therefore, be well-advised to build contingency safeguards.

    4) Restructure and reorganize public sector petroleum companies

    • Consolidate upstream assets: In the first instance, the upstream assets should be consolidated under ONGC (the upstream assets of BPCL, IOC, HPCL, and GAIL should pass onto ONGC) and GAIL should be unbundled into a public utility gas pipeline company
    • Diversify: Thereafter, these companies should be encouraged to look beyond hydrocarbons to build an “energy” enterprise.
    • The restructuring will help cut back the “avoidable” costs of intra public sector competition.
    • It will also reduce the inefficiencies of “sub-scale” operations.
    • It will provide a focused platform for balancing the shorter-term need to provide secure and affordable hydrocarbons with the medium and longer-term imperative of developing clean energy.

    5) Avoid siloed thinking

    • The petroleum minister should not see his responsibility through the siloed prism of oil and natural gas.
    • He should broaden the aperture and become the progenitor of the energy transition.

    Conclusion

    The dilemma referred to in the opening sentence will be easier to resolve our priorities are set within the framework of clean energy.