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.