Hindustan Times ( 25
May 2016 ) carries a report with
following headline :
" Take
charge of all private wells , HC tells state
"
Report goes on :
Stating that water is a " natural resource that
belongs to entire nation " and not
to any private entity , the Bombay High Court ( HC ) on Tuesday directed the
government to requisition or take charge of all private wells till the time the
state faces water shortage
This order raises following questions :
# What about
other Natural Resources that too, belong to entire Nation ?
# Can these
continue to " belong to private parties " when there is no
shortage ?
# Who shall
decide , what is a Natural Resource and how can it be used for
the benefit
of the entire Nation ?
# Should it be
left to the judiciary to decide upon these issues , only when
someone files
a PIL or should NDA government bring out a definitive and
comprehensive
LAW to regulate use of National Resources ?
I request NDA Ministers to read my following blog , and
come up with a proper law :
------------------------------------------------------------------------------------
Sunday, 16 February 2014
Needed - some Simple Answers !
This is with reference to the controversy surrounding the
pricing of KG-6 gas of Reliance , which started with $ 2.4 , is currently $ 4.2
and slated to rise to $ 8.4 / unit , from April 2014
Writing in yesterday's Times of India , ( Swaminomics ) ,
eminent economist , Swaminathan Anklesaria Aiyar , made following points
:
> Reliance ( KG - 6 ) accounts for only 10 % of
the gas production in our
country . Balance 90 % is by Public
Sector Companies such as ONGC etc
> Hence , any increase in selling price will
mostly benefit government itself
( Any idea , what will government do
with this windfall ? )
> Price - hike envisaged is recommended by a
committee headed by Mr C
Rangrajan ( - implying ,
infallible / sacrosanct ? )
> By introducing price control on gas , "
India's name is mud globally , and
top exploration companies now avoid
India "
> An economic rule of thumb is that " traded
Commodities " should be
priced on par with the import price (
my question : irrespective of the
actual cost of production in India ? )
The Rangrajan price of $ 8 / unit , is
well below the import price
Not being an economist , I am confused !
May be Mr Aiyar can dispel my following doubts :
# By taking out of our own soil ( or sea ) , does
gas become a " traded
commodity " ? - even
if entirely sold in India ?
# Is KG-6 gas a " Natural Resource "
which belongs to the Nation - and
not to Reliance ?
# Is Reliance the " Owner " of the
gas or a mere " Contractor " ?
# Would Mr Aiyar , want the Central Government
to extend the same logic
to other " Natural Resources
" ( belonging to the country ) , being dug
out from the earth ( by private
companies ) , such as :
* Oil / Coal / Shale
Gas etc ( Fossil Fuels )
* Ores of Iron /
Copper / Zinc / Aluminum etc
* Trees ( timber ) that grow in our
jungles
* Any number of minor
minerals / chemicals
Should these too , be treated as
" Traded Commodities " , whose local
selling prices must be same as
Imported prices ?
# What about the air / wind that blows freely over our land ?
Does it belong to the Nation or
not ?
Or , does it belong to the
Companies setting up WIND FARMS , to
generate electricity ?
Should such power be " Price
Controlled " or not ?
# What about the Sunlight that falls on our vast land ?
Who does it belong to ? To
our government or to the companies setting
up mega Solar Power
Projects ?
Should there be a price control on such
power - produced , using a National Resource ?
# What about the hydro - power generated by
private sector companies
from the water flowing in our Country's rivers ?
Does - or does not - that water belong
to the Nation ?
Should not such power be price -
controlled ?
# Tomorrow , if a private sector company ( or a
consortium of Indian
Companies , in joint venture with
foreign companies ) , invest Rs 1 Lakh
Crores , to build the 22 Km long
Kalpsar Dam across the Bay of Cambay
in Gujarat , and generate 10,000
MW of power from Oceanic Tides , -
can they be allowed to set any selling
price ? At International price ?
I suppose , it would be next to
impossible for them to " Export " such
power beyond the shores of India
!
# Incidentally , what about the Airwaves ( the 2G / 3G
Spectrum ) ?
Is that also a Natural Resource which
belongs to the Nation ?
Having " licensed " it from
the Central Government , can Mobile
Phone companies , set any selling
prices for their services ?
Even with a combined debt of around Rs 2 Lakh Crores , how are
these
Mobile companies , able to deliver ( nearly ?
) cheapest mobile phone
services in the entire World ? May be at 10 %
of international price ?
# In ALL of the above - mentioned cases , should
Central Government
carefully calculate / frequently audit
, the " Cost of Production " ? Then
link the " Local / Domestic , Selling
Prices " to such " Cost of Production "
allowing certain pre-determined "
Return on Investment " ?
# Even as we agree that " Export prices "
of gas are governed by prevailing
international prices , how come the
" Domestic Prices " of gas are vastly
different in different countries ,
ranging from under $ 1 to $ 5 / unit ?
Does this itself , not prove that , in
each country , domestic prices are
linked to their own local " Cost of
Production " ?
# Very often , have we not exported , food grains , at
" Below the Cost " ?
Mr AIYAR ,
You will be doing a great service to millions of ignoramus like
me , by offering your own " Views " on the points raised above
And , I suppose , since the fall in production from KG - 6 , is
purely and entirely , due to " Technically Sound " reasons , raising
of the selling price to
$ 8 ( or even $ 16 / - ! ) , won't result in any increase in
production !
Time alone will tell !
------------------------------------------------------------------------------------
FOOTNOTE :
It seems , Oil Minister , Shri Dharmendra Pradhan has taken some of my suggestions into account while announcing auction of 67 Oil / Gas blocks , yesterday
Hindustan Times ( 26 May 2016 ) describes these as follows :
" Spelling out salient features of the policy , sources said the auction will be done on a REVENUE SHARING model, where bidders will be asked to quote the REVENUE they will share with the government at LOW and HIGH end of the PRICE and PRODUCTION
The new REVENUE SHARING REGIME will replace the controversial PRODUCTION SHARING contract ( PSC ) model where oil and gas blocks are awarded to those firms which show they will do maximum work on a block
Also , a single license for exploration and exploitation of conventional and non-conventional hydrocarbons will be issued and operators will have freedom to sell oil and gas on arms length market price , Pradhan said , adding that there would be no cess on crude oil "
-------------------------------------------------------------------------------------
26 May 2016
www.hemenparekh.in / blogs
-------------------------------------------------------------------------------------
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