nd str and n rastr t re 9.39
healthcare and even agriculture. The
concerns of Petroleum sector
model is getting popular support from
the urban local bodies in the country In the absence of a global gas market for
and it is believed that in the Smart Cities benchmarking domestic gas prices in India, various
scheme it could play a very lucrative role. formulae have been suggested. Since October
Recently, the Economic Survey 2016-17 2014 a formula based on producer and consumer
suggested68 the government to create a markets is being used to arrive at domestic gas
new institution as a PPP to compete with prices in India. It was expected that the formula
and complement existing institutions to would balance the interest of producers and
consumers in the country.
procure stock and dispose pulses.
However, market-determined arm’s length
(vii) PPPP Model: Experts have suggested
pricing for domestic gas, with an effective regulator,
public private people partnership
to provide adequate incentive for investment
(PPPP) model, too for certain sector
and also ensure competiveness and transparency
in the country. Though such a model remains the first-best solution that merits
has been in use since 2000-01 itself consideration. It would reflect the appropriate
by in agriculture sector to promote gas price in relation to alternative fuels. In the
participatory irrigation development— medium-term, being a large consumer, India
in the Command Area Development may be able to be a price setter for gas prices in
Programme of 1974 (renamed as the region. Possible steps to address the concerns
Command Area Development and of the sector are as given below (Economic Survey
Watershed Management Programme in 2015–16):
2004)—in which individual financial Petroleum products and natural gas
contributions come from the farmers should be included under the Goods
(around 15 per cent of the total cost) to and Services Tax (GST), or at least its
develop field channels and drains. exclusion should not be indicated in the
It is believed that in the area of developing, Constitution Amendment Bill.
maintaining and protecting local The cess collections could be used to
public assets this model could be highly support construction of a network of gas
effective. In future, the local bodies— pipelines, which is of crucial importance
urban as well as rural—may be using this for providing clean energy to deprived
regions of the country. The progress
model to develop social and economic
is somewhat constrained at present by
infrastructure.
having been linked to revival of fertilizer
68. Basically, the Economic Survey 2016-17 ol. units and development of small industries
, pp. has supported the advice of the in areas along the gas highway projects.
Committee on Incentivising Pulses Production
Through Minimum Support Price (MSP) and Related Alternatively, in order to promote the gas
Policies headed by Arvind Subramanian, Chief pipeline network, Viability Gap Funding
conomic Adviser report su mitted in Septem er,
(VGF) may be provided for promoting
the expert committee was set up y the
government on account of the price volatility of pulses pipeline assets creation and development
seen during . of efficient markets.