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Wednesday, Mar 01, 2006


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Calls everywhere, but search for energy

Lack of quality of infrastructure has been the recurring theme when the India story is discussed anywhere these days. The government is not short on initiatives. Can will be backed with implementation?

The telecommunication sector in India is recording one of the fastest growth rates in the world. Tele-density stood at 11.75 per hundred at end-January, 2006.

The ambitious target is to reach 250 million connections by December 2007, and I am confident of success. I propose to provide Rs 1,500 crore from the Universal Services Obligation Fund in 2006-07. More than 50 million rural connections will be rolled out in three years and, thereafter, a connection will be available on demand. The digital divide between rural India and urban India will be bridged. In order to extend financial support to infrastructure for cellular telephony in rural areas, the Minister of Communications will bring a Bill in the Budget session to amend the Indian Telegraph Act.

Not power, though

Power generation in 2005-06 has, so far, shown a modest growth of 4.7 per cent because of shortage of fuel, mainly LNG and coal. The demand-supply mismatch continues. More efforts are required to augment capacity in generation, transmission and distribution. Eighty two projects are under construction and, when completed in one to three years, will add 33,000 MW of capacity in the public sector and 6,500 MW of capacity in the private sector. Of these, about 15,000 MW will come on stream by March 31, 2007.

The Ministry of Power has invited bids for five ultra mega power projects of 4,000 MW each, of which two will be pit-head (in Chhattisgarh and Madhya Pradesh) and three will be coastal (in Gujarat, Karnataka and Maharashtra). It is our intention to award these projects before December 31, 2006.

Hoping for more light

Capacity addition alone is not enough; we need deep and durable reforms in transmission and distribution. In order to create an enabling and empowered framework to carry out these reforms, the Prime Minister will establish an Empowered Committee of Chief Ministers and Power Ministers. A target of 3,075 MW of installed capacity for the Tenth Plan was fixed for non-conventional energy sources, including wind power. By December 31, 2005, that target had been exceeded and 3,650 MW of capacity installed. I propose to provide a sum of Rs 597 crore next year for non-conventional energy resources. All States have signed memoranda of understanding to implement the Rajiv Gandhi Grameen Vidyutikaran Yojana. Ten thousand villages will be electrified in the current year and, in 2006-07, 40,000 more villages will be electrified. The key to the success of this programme is the engagement of franchisees and proper commercial and contractual arrangements for distribution, billing and collection.

Partners for fuel

A comprehensive review of the coal policy is underway. This year, 45 coal blocks have been allotted for captive consumption to the power, cement and steel sectors and to the State Governments. After reserving blocks for Coal India Ltd and its subsidiaries for the period up to 2012, it has been decided to de-block coal reserves of 20 billion tonnes for power projects. The definition of captive consumption will also be amended to allow coal mining by producers with firm-supply contracts with steel, cement and power companies. The capacity of Central Mines Planning and Development Institute Ltd (CMPDIL) to drill in order to prove reserves is now only 200,000 metres per annum, and this will be expanded substantially.


Energy security is high on the Government's agenda. In five rounds of the New Exploration Licensing Policy (NELP), 110 production-sharing contracts have been awarded. The Ministry of Petroleum and Natural Gas has now made its biggest offer under NELP VI. Fifty five blocks and an area of 355,000 sq km, which is thrice as large as the previous round, have been offered. Besides investment in the upstream and downstream segments, we are encouraging investment in refining, pipelines and green fuel projects. In the refinery sector alone, an investment of Rs 22,000 crore is expected in the next few years.

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Stories in this Section
Rice processing

The lure of equity despite stretched valuation — Bias in favour of investments in MFs, insurance
No cheer for telecom users, service providers — Now, service tax on Net telephony
Domestic airlines get tax exemption for 1 more year
A new lease
Budget goes pro-investment; new taxes kept to minimum — FBT modified; small cars to cost less on duty cut; tobacco taxed
Boost to investment activity — Govt totally committed to fiscal prudence and continued reforms: Chidambaram
Central Plan outlay put at Rs 2,54,041 cr — Energy, social services & transport corner major chunk
Pay for more services
Metals: Reflected lustre
Big bonanza for the small car
A touch more than a stitch in time
Wiring up the nation
A few goodies for rural impetus, lower costs
Ramp up in resources for welfare
Tea industry hails allocation
Fiscal improvement
Let us make our destiny
Sighs of relief and dropped jaws — The FM seems content more at not ruffling many feathers
A shopper's day out
Small cars, ice-creams, colas cheaper; not so umbrellas, glassware

Taxes not recovered crossed Rs 1,11,000 cr
25 projects under e-gov plan
Services sector provides Rs 23,000 cr
Refractories: Marginally positive
No major reaction
Gathering pace
Judicious tinkering
Equity fund redefined
No special drive: auto parts sector
`There's further scope for reducing raw material duties to Asean levels'

Duty rationalisation for man-made textiles — More allocation for textile schemes; Rs 189 cr for textile parks
Excise duty cut, a boon for small carmakers — `Small cars' are Maruti 800, Wagon R, Zen, Alto, Hyundai Santro, Indica diesel
MFs keen to tap global opportunity
IT industry divided over impact of excise duty — Desktop, notebooks may turn costlier
Some habits don't die that easily
AMFI to seek clarifications on foreign investments
Towards a cutting edge tax system
Redeeming `Aam Aadmi'
Boost for Bharat Nirman
Charting a high-growth path
Calls everywhere, but search for energy
Succour for the old
Pinches more than it soothes
Accent on digitisation — The income-tax offices will undergo business process re-engineering
How the tax breaks pan out
Price cuts galore on small cars
Excise duty: Minor twists
Registrars, share transfer agents under service tax ambit — `12% levy is bad news for AMCs'
Tepid changes to corporate tax
Budget recedes in importance
The knowledge society
Investment boom
Let down on CST
The wind is blowing, take cover!
Thin attendance, minimal interruptions — Top CEOs at industry chambers largely non-committal
Corporates neutral to Budget proposals — It was on expected lines, say honchos
Offers in manufacturing, services
Boost for soya
MAT rates altered
Captains tuned in
`Fiscal deficit to come down'
`Good Budget for industry'
Stable tax structure welcomed
It'll promote export growth
Focus on rural sector
It gets 8 marks out of 10
Petroleum industry unhappy
Boost for auto sector
Duty cuts for plastics, hydrocarbons
Zero customs duty on set-top boxes to benefit manufacturers
Customs duty hike — Vanaspati industry disappointed
Wiring up India with highway networks
On the expressway
Higher allotment for highways
No relief for oil cos on pricing, duty structure
Pharma sector sulks as Budget ignores wish-list
A no-show for the pharma sector
`Not much for pharma sector'
Bleak outlook for pharma sector
More coal blocks for power sector
Budget disappoints shipping industry
Shipping management services expensive
Marginal duty cut for alloys, metals — Proposal to cut duty on mineral products to 5 per cent
Sugar sector feels let down — `No measures on de-control'
15 new services under tax net — Scope expanded in banking, financial services
If only consumers had lobbyists
Hails nod for tea protection fund
Tea industry hails allocation
Wah! Budget
`A boost to replantation'
`Will help exports'
Policy overhaul for coal sector
`No relief for domestic liquor players'
A mild choker
Additional excise irks cigarette cos
Tobacco shrugs off excise hike
FMCG prices to stay put
No reason to blush
Your small car will now be less expensive
Toyota not to hasten small car launch
Positive spin to auto ancillary
A ray of hope
Will colas be cheaper?
Priority in lending to food sector — Rs 1,000-cr corpus for refinancing loans
Priority sector status hailed
`Greater credit flow likely'
Of pasta, idli and dosa
`Expert panel to help gems sector'
`Viability gap funding' for semiconductor projects — New policy on cards to make India hub
`8% excise on packaged software not good'
`Hike in service tax a dampener'
A good fit for consumer
5 pc hike likely in landed cost
A fine cut for paper
Paper sector happy with excise cut
`Impetus for growth'
Constraint on raw material sourcing
Excise duty cut for paper products
`Likely to see flight of IP to tax-friendly nations'
Ice-creams cheaper? Maybe not all
Jute industry upset
Govt may dilute stake in non-navratnas
Going the extra mile for the farmer
Service tax, no hiccups for Concor
Service tax hike not to have inflationary impact
Bank deposits to get 80C deduction — Recapitalisation bonds to be converted into tradable securities
No bad news on income taxes
Tweaking the FBT
Fringe Benefit Tax provisions modified — India Inc not mollified, wants it to go completely
Outlay for tourism hiked
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