Arun Jaitley for Air India sell-off, says private airlines can handle entire market, no need for state-run co
Finance Minister Arun Jaitley has favoured disinvestment of the loss-making Air India, saying the airlines market share is just around 14 percent whereas the debt burden is Rs 50,000 crore. This is the clearest indication yet from the current NDA regime on possible stake sale in Air India, which is staying afloat on taxpayers money. Air India’s market share today is around 14 percent while the debt is Rs 50,000 crore while the government has not put in money in private carriers, Jaitley said at Dialogue@DDNews programme. To run Air India, around Rs 50,000 crore have been put in and that money could have been used for promoting education, the minister added. “In this country, if 87 or 86 percent flying can be handled by the private sector… then they can also do 100 percent,” Jaitley said. According to him, of the total debt, around Rs 20,000-25,000 crore are related to aircraft valuation. “What to do with the remaining amount… Air India also has some assets,” he said even as he emphasised that the civil aviation ministry is making all efforts to explore all the possibilities. Jaitley further said that when he was civil aviation minister for a brief period during 1999-2000, he pitched for disinvestment of Air India arguing that if it was not done, “nothing will be left to disinvest. That was around 18 years ago”.
Aviation ministry to plan path for AI this week
The flight path for Air India’s future may be drawn as early as next month. With finance minister Arun Jaitley saying the government is open to disinvesting in the airline, the aviation ministry will this week begin internal deliberations on the issue. Apart from this, the Niti Aayog is also learnt to be in advance stages of finalising its recommendations for the debt-ridden Maharaja. “Internally within the ministry we will take a call on how to take the FM’s statement forward. Once the ministry makes up its mind on the issue of disinvesting in AI, we will take the matter to the Cabinet for approval. If the Cabinet gives its nod, then the department of disinvestment will implement the same,” said a top aviation ministry source. The doubt in everyone’s mind is whether AI — with its debt burden of almost Rs 52,000 crore — will get a buyer. Sources said the government may informally find out if some serious player is willing to run the airline, then it will take the process forward. The FM has also said that this will happen only if there is a strategic buyer. “We hugely respect FM’s opinion that instead of putting thousands of crores in AI, that money can be spent on social sector schemes. We will very soon decide whether we can move in the direction of divesting in AI as that is the fundamental question, along with will there be a buyer and how to attract one, given the issues with AI,” said the ministry source. Quenton Nelson Jersey
Solar panels to attract 5 per cent rate under GST: Revenue Secy Hasmukh Adhia
The centre has finally clarified that solar panels will attract a 5 per cent tax rate under the Goods and Services Tax (GST), contrary to the 18 per cent rate which was announced earlier. “All solar equipments and its parts would attract 5% GST only,” Revenue secretary Hasmukh Adhia tweeted. Power, coal, mines and renewable energy minister Piyush Goyal had on 19 May said the 18 per cent rate for solar will not impact the solar power tariffs. “Tariffs for solar projects vary from project to project. The rise will be compensated by the decline in corruption and operational difficulties,” Goyal had said at a media conference. The government had also announced that the rate finalised for coal stood at 5 per cent. ETEnergyworld was the first to report the anomaly on 20 May. Rajeev Kapoor, Secretary at the ministry of new and renewable energy secretary had told ETEnergyworld that the renewable energy sector and all parts related to it will remain under the 5 per cent tax slab. ALSO READ: How will the higher tax rate impact the solar power sector? As per chapter 85 of the GST rates finalised by the government, all renewable energy based devices and spare parts were classified under the rate of 5 per cent. Kapoor had also stated that there was an anomaly which would be addressed soon. The government is reportedly expected to issue a clarification on the confusion over tax rates for solar power sector at the next GST council meeting which will be chaired on June 3. Kyle Okposo Authentic Jersey
Bihar announces mega renewable power policy; to add 3,400 MW in five years
The Bihar government has come up with a new renewable power policy for the state where it looks to set up over 3,400 Megawatt projects based on non-fossil fuel-based resources in the next five years. The policy is likely to spur investments to the tune of Rs 20,000 crore in energy projects, according to Centre for Energy and Environment Development (CEED), a non-profit organization active in Bihar’s energy space. The state’s Cabinet last week cleared the policy called ‘Bihar Policy for Promotion of New and Renewable Sources, 2017’ and is likely to notify the same soon. Under the policy, the state government is mulling setting up 2,984 MW capacity based on solar energy, 282 MW on biogas and 200 MW small hydropower plants. Of the total solar capacity, the state plans to set up 1,000 MW rooftop solar projects and 1,00 MW as mini grid projects. Composed of solar modules, a battery bank, and an inverter, a mini-grid system can offer solar power as the primary power source and later switch to alternative power sources when solar power is insufficient for meeting demand. The renewable energy capacity addition of Bihar is in line with central government’s plan to have capacity of 175 Gigawatt built on alternative sources of energy by 2022. Of this 175 GW, the government plans to add 100 GW solar power capacity, 60 GW wind, 10 GW from biomass and 5 GW from small hydro projects. “The policy is expected to open up massive new avenues for jobs and livelihood opportunities in the state; particularly in supply chain, operation, and maintenance for grid-connected and off-grid or decentralized renewable energy projects,” CEED said in a statement. It further said the policy provides a host of economic incentives to project developers for setting up renewable energy projects, which includes exemption of electricity duty, Value Added Tax (VAT), distribution charges and cross-subsidy surcharges. CEED said the provisions to de-risk private sector investment in mini-grid projects are also included in the policy given the fact that remote areas of Bihar possess huge potential for mini-grids and it is important to tap those potential with suitable investment climate. Josh Sitton Womens Jersey
Barring 6 states and Chandigarh, India to turn power surplus this fiscal
Most parts of the country will have surplus power availability in the current financial year thanks to higher electricity generation, the Central Electricity Authority said. The apex power sector planning body said in a report that in 2017-18, there will be anticipated energy surplus of 8.8 per cent and peak-hour surplus of 6.8 per cent. While the eastern region will be able to meet its demand almost in full, other four regions will have surplus power varying from 3 per cent to 13 per cent, the report released on Monday said. Barring six states and a union territory, all other parts of the country will be power surplus on average during the year, as per the data based on gap between electricity requirement stated by states and electricity availability. However, the data does not reflect the true power outages scenario in states that may choose to shed load due to financial inabilities or technical failure. The report said that overall the country recorded the lowest ever demand-supply gap of 0.7 per cent in 2016-17, both in terms of energy and peaking. “Even this demand-supply gap was due to factors other than non-availability of power in the country,” it said. The load generation balance report for 2016-17 had, however, predicted a national average power surplus of 1.1 per cent in that year. There will be surplus energy in a number of states in the southern and western regions while some demand-supply gap is likely to be experienced by some states, mostly in northern, eastern and north-eastern regions, the report for 2017-18 said. In peak hours, power surplus is likely to prevail in all the regions — 6.7 per cent in northern, 17.2 per cent in western, 1 per cent in southern, 10 per cent in eastern and 5 per cent in north-eastern region. Joe Looney Womens Jersey
OPINION: Bring electricity under GST soon
One glaring anomaly in the forthcoming rollout of the goods and services tax (GST) is that electricity duty remains outside its purview. While scores of central and state taxes are to be done away with to usher in GST -so as to modernise the indirect tax regime, eschew cascading taxes on inputs, with set-offs provided for taxes already paid in the value chain -an important sector like electricity is to remain outside the GST regime for the foreseeable future. Such exclusion makes no sense. Electricity duty can be as high as 25-30% in a few states, but the average is about 8% levied on consumers. The tax needs to be made amenable for input tax credit, otherwise it would in effect cascade economy-wide. Keeping something as essential as electricity outside GST would be retrograde, inefficient and perversely deny input tax credits in a vital sector that is undergoing path-breaking and transformative change. Note that the GST Act defines `work contracts’ as services. And the power sector is essentially a mesh of contracts for engineering, procurement, construction (EPC) to generate electricity, boost energy efficiency and shore up renewable power. Yet, input tax credit would not be available on EPC contracts, with electricity outside the GST regime. Further, the Finance Act of 1994, in section 66D, lists transmission and distribution (T&D) of electricity in the negative list of services. So, no input tax credit is possible for T&D activity either. Keeping electricity outside GST is not international practice. The state governments seem chary of giving up electricity duty as they collect considerable sums on that account, even as they surreptitiously seek to indulge in fiscally reckless giveaways in power. Including electricity in GST would actually boost transparency in the sector. Niles Paul Womens Jersey
No uptake for rooftop solar in Indian cities
India might be playing a leadership role in bringing the world together for the International Solar Alliance, but it is struggling with the adoption of solar rooftops in its metro cities, a recent study has shown. Despite friendly policies and net metering guidelines in several states and a subsidy of 30 per cent offered by the Ministry of New and Renewable Energy (MNRE), the installation of solar rooftop systems has been dismal in leading metros in the country, especially in Chennai and Mumbai, according to the study. According to the study, titled Indian Cities Slacking on Rooftop Solar, Delhi, which offers metered connections and a generation-based subsidy in its solar policy, has also failed to shine. The study, by Greenpeace India, says that while the country has made good progress in reaching its 60 GW utility scale solar electricity targets, deployment is particularly slow in the residential rooftops sector. The government has earmarked 40 GW as the rooftop solar target by 2022, but as of December 2016, only over 1 GW worth of installations have taken place. Delhi, which has a current estimated solar potential of 1.25 GW in buildings and has an official target of installing 1 GW by 2020 and 2 GW by 2025, has installed only 35.9 MW of solar rooftop capacity. Out of this, only 3 MW is from residential installations. Mumbai has also been slow in installing solar rooftops in residential buildings. Out of 1.72 GW estimated solar potential, as calculated by the Indian Institute of Technology, Bombay, the city has installed only 5 MW of residential solar. Tamil Nadu, which offers Rs 20,000 subsidy for domestic consumers under the Chief Minister’s Solar Rooftop Capital Incentive Scheme, has also not been able to make significant progress. The state has a rooftop solar target of 350 MW but not even 2 MW have been installed. “Despite the national incentive in the form of a 30 per cent capital subsidy, and a range of state incentives and schemes, rooftop solar is yet to take off in the same manner as large-scale solar. However, this does not mean India should lower its ambitious targets, as some have suggested. Rather, the government must step up and play a more proactive role in encouraging rooftop installations,” said Pujarini Sen, Climate and Energy Campaigner, Greenpeace India. “As the convenor and a founding member of the International Solar Alliance, and a country with abundant solar potential, India’s commitment to clean energy must continue to be robust.” A Greenpeace poll showed significant public interest in adopting solar power. Close to 55 per cent of the 812 participants expressed willingness to invest and install solar. Despite this interest, awareness and various incentive schemes, the thrust on solar rooftops has largely been in the government, institutional and commercial buildings as opposed to homes. The report cites lack of familiarity with the process and fear of bureaucratic red tape as the main reasons for the slow uptake of solar rooftops in the residential sector. Other reasons are insufficient knowledge among citizens about the financial incentives and attractive return-on-investment, perception that large upfront capital investment is required, and ineffective implementation of net metering in various states. “If central and state governments are serious about boosting solar, they must do a better job of reaching out to resident welfare associations and community groups to encourage people to shed their inhibitions and embrace rooftop solar,” said Sen. However, the challenges on the ground are more complex. Developers stress that there is a problem of lack of uniform roofs in the country and the fact that roofs are often used for various purposes that doesn’t leave enough space to install big panels. A 10 KW solar plant that can power three air-conditioners and is sufficient for a three-bedroom apartment needs around 1,000 sq. ft. of terrace area. Ved Prakash Goyal, an advisor to Applied Solar Power Management, part of the ENGIE group, the largest utility company in the world, said: “In India, everyone puts the water tank on the south side of the roof and it is the direction where you get maximum solar energy. Plus, you have various things on roofs which reduces the available area needed for solar.” The government has also announced putting 18 per cent tax on solar panels under the new Goods and Services Tax (GST) regime, though this number may be revised. While industry feels the currently proposed tax rate will increase cost of solar projects by 12 per cent, Goyal says that this will not be an impediment as far as solar rooftops are concerned. “The prices of solar modules are going down and it is expected that they might further decrease by roughly five per cent in the next six months, so may be the net effect of GST would be one per cent. In any case solar energy is becoming cheaper to install and the time is ripe for the government to do the needful to boost it further. With the right steps, I can foresee a boom in residential solar rooftops in the next two years.” India, where there is an issue of both land availability and air pollution, is also a country with over 300 million buildings and as many rooftops. Dan McCullers Womens Jersey
ONGC’s onshore domestic crude production rises 2.4 pc in FY17
The state-run ONGC has seen reversal in onshore domestic crude oil production as it increased to 5.97 MMT during the fiscal year ended March from 5.82 MMT in FY16, logging a growth of 2.4 per cent due to early monetisation of discoveries at Ankleshwar, Cauvery (Madnam) and Rajahmundry (Keshnapalli West), among others. ONGC Chairman and Managing Director D K Sarraf today also said that the last fiscal year has been “excellent” one as the company had as many as 23 new discoveries compared to 17 in 2015-16. “Around 60 per cent of the discoveries have been monetised in the same year,” Sarraf told reporters here. Of the 23 new discoveries made in last fiscal, 13 discoveries were in the onshore wells and 10 in the offshore wells, he said. The production is expected to jump further to 6.05 MMT during the current year backed by similar monetisation of Ahmedabad (Gamij) and Mehsana besides existing ones in Cauvery (Madnam) and Rajahmundry (Keshnapalli West). The company drilled its highest-ever number of wells — 501 — during FY17, against 392 in FY16 and 401 in FY15. The Central government’s initiative for `Reassessment of Hydrocarbon Resources (HC)’ in Indian sedimentary basins which is being undertaken by ONGC is expected to get complete by end of November this year, Sarraf said. Curtis Samuel Womens Jersey
Fidelity, Aberdeen drawn to gas retailers as India cleans up
Fidelity Investments and Morgan Stanley Investment Management have increased exposure to Indian city-gas retailers, as Prime Minister emphasis on clean fuels burnishes the outlook for the industry. The demand from investors has been so strong that Indraprastha Gas Ltd., which supplies to homes and vehicles in New Delhi, raised the cap on foreign ownership to 30 percent from 24 percent, and may increase it again, Managing Director E.S. Ranganathan said. India’s largest city gas distributor Gujarat Gas Ltd., where Aberdeen Asset Management Plc. is the biggest non-state investor, and Mahanagar Gas Ltd. have also seen an increase in offshore holdings. “Foreign investors who were investing in China are now looking more on India,” Ranganathan said. “Everyone has an India fund or an Asia fund or South Asia fund and these funds are investing in Indian city gas networks. When our market cap went above $2 billion, lots of funds started looking at us . .. India’s gas demand is about a fifth of China’s due to weak domestic supply and poor infrastructure, though the government is trying to change this, according to Bloomberg Intelligence. Oil Minister Dharmendra Pradhan said last year the nation will lay 15,000 kilometers (9,320 miles) of gas pipelines over five years. Modi, who championed natural gas as the chief minister of Gujarat state, has stepped up measures to improve air quality in cities by giving priority to distributors such as Indraprastha gas for accessing cheaper local gas. Offshore holdings in Indraprastha Gas climbed to nearly 25 percent as of March 31, from about 21 percent a year ago, according to data available with the exchanges and compiled by Bloomberg. Fidelity acquired 579,367 shares, while Morgan Stanley Investment added 292,598, according to the most-recent exchange filings. Both fund managers didn’t respond to emailed requests for comment. Jarran Reed Womens Jersey
H-ENERGY to invest over Rs 45 billion in the natural gas segment in five years
H ENERGY plans to develop Liquid Natural Gas (LNG) re-gasification units on the west and east coast of India along with pipeline infrastructure. H-Energy is at an advanced stage of setting up an LNG re-gasification unit at Jaigarh port in Maharashtra. As part of its phase-1 plan, the company in 2017 signed an agreement with France-based energy company Engie to charter a Floating Storage and Re-gasification Unit (FSRU). According to Darshan Hiranandani, CEO of H-ENERGY, the company has already acquired land for the onshore receiving facility close to the jetty where the FSRU will be anchored. “At H-ENERGY our prime focus is on providing end-to-end solutions in the natural gas sector. The FSRU has a capacity to process 4 million tonne of natural gas per annum and will be commercially open for business in the third quarter of 2018. We plan to invest more than Rs 45 billion in creating LNG infrastructure on the west and east coast along with end-to-end pipelines for the benefit of customers, “Hiranandani told ETEnergyWorld in an exclusive interview. He added that after phase- 1 of the project stabilises, the company will be setting-up a land based re-gasification plant with an annual capacity of 8 million tonne per annum. Also, the company has already started work on Jaigarh to Dhabhol tie-in pipeline which will carry natural gas to the gas grid of GAIL at Dhabhol. Commenting on the GST council’s decision to keep major petroleum products, especially natural gas, outside the ambit of Goods and Service Tax (GST), H-ENERGY CEO stated that GST is a step in the right direction and will boost investments in the sector. He added that at a time when the country is focussing on shifting to a gas based economy, the government should make natural gas a part of GST. The company had received a letter of award by the Kolkata Port Trust in 2015 to set-up and operate a FSRU offshore Digha. According to the company, the FSRU will be located 115 Km into the sea within the Kolkata Port Trust boundary limits and will be connected to an onshore receiving facility at Contai through a subsea pipeline. The company has also approached Petroleum and Natural Gas Regulatory Board (PNGRB), for laying a 700 Km pipeline to connect the East coast FSRU to major demand centres in West Bengal. Daniel Sedin Jersey