Beyond fiscal deficit, lower T-Bills is just better optics

The Ministry of Finance on Wednesday had reviewed its borrowing program and decided to trim the outstanding Treasury-bills (T-bills) but increase the debt through dated government securities (G-Secs).

According to a Finance Ministry statement, “The borrowing programme of the Government of India has been reviewed, with RBI, and following decisions taken: (i) The Government will trim down the T-Bills from present collections of Rs 86,203 crore to Rs 25,006 crore by March end, 2018. (ii) The Government will raise additional market borrowings of Rs 50,000 crore only in fiscal FY18 through dated government securities.”

Killing the hen, India’s gas pricing

Like most emerging economies, India too is dependent on fuel imports to meet its energy demand. The country bore a crude oil import bill of $64 billion in FY16 and effectively banks on imports to meet 80% of its’ oil consumption. Gas on the other hand paints a prettier picture with India meeting almost 60% of its demand through domestic production. But this data point only reveals a portion of India’s much messier natural gas story.

Gas is flared off from a flame boom aboard DCOR LLC’s Edith offshore oil and gas platform in the Beta Field off the coast of Long Beach, California, USA, 18 May 2010.Photographer: Tim Rue/Bloomberg via Getty Images

Plagued by litigation over allegations of favoring industrialists and price curbs, domestic gas production has been on a steady decline. According to data compiled by EY, “the share of natural gas in the country’s primary energy mix declined from 10% in 2009 to 7% in 2014, compared with the global average of 24%, mainly due to a sharp drop in domestic supplies.” Global energy giant BP in its assessment of India’s energy market during 2015 notes that “gas production fell by 3.8%, its fifth continuous year of decline, 20 Billion cubic metres (Bcm) below the 2010 peak of 49.3 Bcm.”

HELP is not enough

 

“HELP is on its way!” quipped a senior official in India’s oil ministry a day before the union cabinet approved the new hydrocarbon policy. Oil minister Dharmendra Pradhan, while announcing the Hydrocarbon Exploration Licencing Policy, emphasised on its acronym HELP, hinting how his government believes that this is the panacea for India’s upstream hydrocarbon sector.

Oil pump at sunset (Courtesy: http://www.investmentu.com/)

India and five pillars of energy

The year 2015 has witnessed oil, coal, power, renewable energy and nuclear power sectors evolve considerably. With sudden changes in price dynamics of fossil fuels and a push towards cleaner energy, the Modi government has managed to navigate a brighter path.

Power, Coal and Renewable Energy Minister, Piyush Goyal (Left) and Petroleum and Natural Gas Minister, Dharmendra Pradhan (Right) speaking at different events in Delhi. (Source: PTI)