2018-CGS-29: Mains Revision-17: Secondary Sector of Economy

  • The merger is in line with US International Trade Commission (USITC), for providing comprehensive and swift trade defence mechanism under one umbrella.
  • Presently, the trade defence mechanism in India lacks optimality and takes more than a year to complete proceedings in cases pertaining to unfair trade practices. DGTR can aid in addressing this issue.
  • DGAD deals with anti-dumping and countervailing duty cases, while DGS deals with safeguard measures and DGFT deals with quantitative restriction (QR) safeguards. This was resulting in crucial gaps in operations and duplication of work.
  • DGTR will also provide trade defence support to India’s domestic industry and exporters in dealing with increasing instances of trade remedy investigations instituted against them by other countries.
  • In the last three years, India initiated more than 130 anti-dumping/countervailing duty/safeguard cases to deal with rising incidence of unfair trade practices and to provide a level playing field to the domestic industry. DGTR can provide support to put forward India’s concerns effectively in global platforms.

DGTR being a professionally integrated organization with multi-spectrum skill sets emanating from officers drawn from different services and specialisations will also bring in substantial reduction of the time taken to provide relief to the domestic industry. The newly constituted body is in consonance with the goal of Minimum Government Maximum Governance. [Mint]

Open Acreage Licensing Policy and Challenges With Hydrocarbon Sector

Open Acreage Licensing Policy (OALP) is a part of Hydrocarbon Exploration and Licensing Policy (HELP) which was a replacement to the New Exploration and Licensing Policy (NELP).

OALP marks a departure from the previous regime in terms of the geographical area that could be explored, the number of licenses required, the manner in which proceeds are to be shared with the government, and the procedure to sell what is extracted.

How OLAP is different?

  • Under NELP, the government used to select an area and then place it on the block for investors to bid for the entire block even if they were interested in only a portion.
  • The ‘open acreage’ in OALP provides an opportunity for the potential investors to choose exactly which areas they want to explore and develop.
  • Under OALP, investors choose the exact areas they are interested in, convey their interest to the government, which then places just those blocks up for bidding.
  • Under HELP the developers are not required to apply for separate licences for each of the hydrocarbons they want to extract from the block. They can obtain a single unified license that will allow them to extract and market oil, gas, coal bed methane, shale oil and shale gas.
  • The new policy replaces the earlier profit sharing model with the revenue sharing model.

The new policy is in accordance with the motto of government which promotes “Minimum government and maximum governance” and enhancing of ease of doing business.

Challenges with hydrocarbon sector

Even though the auctioning of hydrocarbon blocks under the new exploration policy had attracted healthy interest a lot has to be done before domestic oil and gas production is enough to actually reduce India’s dependence on imports or before a gas trading hub can be established in the country.

The challenges before the hydrocarbon sector

  • Several of the blocks on offer were small and hence the production potential from them was unlikely to change the oil production or import scenario in the country.
  • The monopolies of the state run GAIL (India) over the marketing and transportation of natural gas, which the private sector fears may lead to discriminatory and unfair practices.
  • The dilemma of whether to pass on the increase of global oil prices to the customer or absorb the loss and offset it against higher inventory gains due to rising prices.
  • Oil sector is still outside the ambit of GST. The value added tax system levies a value added tax when you cross a State border which is not recoverable. This entails a cost when the consumer is from a different state.

India is still not one of the more attractive markets for global giants such as ExxonMobil or Chevron, who would rather invest in West Asia or North Africa. Addressing of these challenges would aid India in attracting more investment and become self-resilient in the hydrocarbon sector. [The Hindu]

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