NEW DELHI: The T S R Subramanian committee, constituted about three months ago to review laws related to environment and forest protection, has recommended some big-ticket changes to the rules and legislation. These include a complete overhaul of certain laws, special fast-track dispensation for power, mining and linear projects, self-certification of compliance by industry and diluting the powers of the National Green Tribunal (NGT).
The committee’s recommendations, made in a report given to Environment & Forests Minister Prakash Javadekar recently and reviewed by Business Standard, are for a revamp of regulations and laws concerning environment, both pollution and forest-related. Several of these changes have either already been in the pipeline or previously discussed within the ministry. Some of these were suggested (or partly processed) during the previous government’s term.
The committee has suggested an umbrella law to help set up new national and state-level regulators that would also take the powers of the existing pollution control boards. The law – Environmental Management Act – would do away with the need for separate Acts to regulate air and water pollution that empower states to give the consent to operate and establish industrial units.
The national and state-level regulators should be able to use the know-how of existing technical institutions and universities, while they appraise projects, as well as monitor their operations.
The law, as recommended by the Subramanian committee, reduces the powers of the National Green Tribunal by setting up special district-level courts to deal with infringement of environmental laws and an administrative tribunal (not a judicial one) to review clearances. A judicial review of project clearances should be the final step, and not the first stage of appeal, the committee has suggested. It has also advised infringement of laws be distinguished and categorised and prosecution and arrest be permitted only in the case of serious offences.
The committee has backed industry’s long-standing demand that a self-certification system for compliance with environmental laws be introduced. This system, to be built on ‘utmost good faith’, would depend largely on project developers disclosing information and being held accountable in post facto review of project operations in areas chosen on random sampling.
A shrunk no-go area for miners – limited to the existing protected wildlife areas and forest patches with more than 70 per cent cover – has also been recommended. The original no-go area plan included wildlife corridors, lands with high biodiversity value (regardless of forest cover) and lands that acted as catchment of rivers.
The high-level panel has also suggested an amendment to the Forest Rights Act to provide a clear exception for all linear projects – roads, pipelines and power lines, etc. The high-level panel had not been tasked to review either the Forest Rights Act or the National Green Tribunal Act.
It has also recommended that the powers of the National Board for Wildlife (which has outside experts on board) in reviewing any changes to national parks and sanctuaries be handed over to the ministry.
A special ‘fast-track’ overall dispensation for linear, mining and power projects has also been recommended, besides an overhaul of the forest clearance process to further reduce the time taken.
The panel has advised that more kinds of projects and those larger in size than the ones permitted today be appraised at the state level, and not reviewed at the Centre, for environmental integrity.
The panel has also advised the government to firm up a legal definition of what constitutes ‘forests’. The present laws do not define the areas where forest laws should apply. The definition was derived by a Supreme Court order that had extended the application of forest laws to lands that might not be classified as forest land on government records.
The court order included lands where trees of more than a certain density grew, regardless of the type or ownership of lands.
The five-member group said, while the compensatory afforestation asked of project proponents should be increased, their role should be limited to providing finances to state forest departments, and not beyond that. It also suggested a five-fold revision of rates of ‘net present value’ (NPV) that companies are required to pay for use of forestlands.
The panel suggested that a specialised and separate environment service be created as another All-India Service cadre.
Among the ideas and changes in the report that the environment ministry has already begun to process or is discussing are dilution of NGT’s role, dilution of the power of tribals to give consent to projects, the legal redefinition of forests, shrinking of the no-go areas and easing of the appraisal regime for power and other projects. The process for upward revision of the NPV rates had begun during the previous government’s term, and a committee was constituted to suggest new rates.
The creation of a new national and state-level authority was pushed by former environment minister, Jairam Ramesh, as well. But it faced opposition from many quarters for a variety of reasons. The present government has already made several amendments to the existing regulations; and other critical changes the high-level panel has recommended are already in the pipeline. These include a single-window clearance system, instead of multiple channels, for projects.
(Source: Business Standard, November 21, 2014)
ARUN JAITLEY NUDGES BANKS TO BOOST CREDIT OFFTAKE
NEW DELHI: As a risk-averse banking system and weak demand conditions crippled growth in non-food credit, finance minister Arun Jaitley on Thursday asked public sector banks (PSBs) to ensure smooth credit flow to projects.
“We have suggested to the banks that proactive steps (be taken) in supporting various projects so that credit offtake in these projects takes up in a big way. Credit is the lifeline of an economy,” he said after a quarterly review meeting of PSBs and other financial institutions. Jaitley added that he was optimistic about credit growth picking up soon as many projects are queuing up for credit.
The minister told the PSBs they should carry out lending on the basis of objective due diligence without being unduly conservative, in a completely transparent manner, “without fear or favour”. This would boost the economy and enable an asset book of high quality, he said, adding that any external influence would be considered as a disqualification.
FE had reported that growth in the offtake of non-food credit continued to be weak, with loans to companies and individuals growing at 11.04% year-on-year to R60,09,720 crore for the fortnight ended August 22. This is the slowest growth in credit in over four years. Non-food credit had shown a growth of 11.77% in the fortnight ended December 18, 2009.
A DBS Bank India study showed that for the first time since FY10, deposit growth this year outpaced non-food loan growth. Credit growth between April and October was an average 12.5% y-o-y even as deposits during the same period grew at 13.1%. The Credit-to-deposit ratio of banks fell to 75.8% by end-October from 77% last year, DBS India said.
During the meeting, PSBs were advised to put in greater effort and outreach to ensure smooth access to credit to various sectors to facilitate rapid growth in economic activity, which was a key priority of the government. Key sectors like agriculture, housing, education and solar and renewable energy required particular focus in this regard, an official statement said.
It added that PSBs were urged to achieve the ambitious credit flow growth target for the micro, small and medium enterprises in particular, given the implication for job creation and growth in manufacturing output. Jaitley also said the non-performing assets (NPAs) of banks have risen over the last two to three years due to the economic slowdown, and asked the bankers to take necessary corrective measures in order to bring down bad loans.
Research firm ICRA said in a note that gross NPAs of PSBs are estimated at 4.4-4.7% as on March 31, 2015, against 4.4% as on March 31, 2014, and 4.6% at the end of June, 2014. The minister also reviewed the implementation of the Pradhan Mantri Jan Dhan Yojana on Thursday. While over 7 crore new bank accounts have already been opened under the scheme, the plan is to take the number to 10 crore by January 26.
(Source: The Financial Express, November 21, 2014)
GAIL PLAN FOR ‘MADE IN INDIA’ SHIPS RUNS INTO CRISIS
NEW DELHI: GAIL (India), which decided to buy one-third of the LNG ships it requires from Indian makers after pressure from the government, may not find it easy to get ‘made in India’ ships on time. This is because Indian shipyards are finding it difficult to tie up with Korean and Japanese companies — who monopolise the market — to build LNG carriers in India.
Petroleum minister Dharmendra Pradhan has written to the Japanese ambassador and to the ministry of external affairs seeking help to build collaboration between Indian ship makers and their Japanese cuonterparts, but no headway has been made yet, sources told FE. Going by the schedule of LNG ship acquisition by GAIL, only few weeks are left for finding a suitable collaboration partner for the Indian ship industry.
After a government directive, GAIL was forced to take out a tender for nine LNG ships to ferry LNG from the US, out of which three have to be compulsorily built in India. However, the tender has had no takers and the public sector gas giant has been forced to extend the bid validity date from October 30 to December 4.
“The main reason for lack of interest is that Korean and Japanese shipyards are reluctant to transfer technology to Indian shipyards. They would rather not bid in the tender if they are forced to transfer technology outside their own shipyards. The Koreans claim that government regulations keep them from transferring technology. And the Japanese are more discreet,” the source explained.
When contacted for a collaboration, Mitsubishi, a qualified manufacturer of LNG vessels, said it would not be participating in the tender as it had a full order book position but the real reason could well be that the Japanese giant is not willing to get into a technology transfer deal with an Indian company.
The only way out now is for the Indian government to reach out to Korean and Japanese governments to work out a deal for transfer of technology. It is looks like the Korean government is not likely to play ball and rescind its own orders debarring the transfer of sensitive LNG ship building technology.
India has more clout with the Japanese government but here again it is not known whether Tokyo will have enough clout to push an independent Japanese company to work against its own business interests.
On the other hand, GAIL has made it clear that the tender cannot wait beyond December. Or else the ships will not be ready on time and the gas major will end up paying billions of dollars in penalties under the take or pay clause with the American suppliers of LNG.
Korean companies including Samsung Heavy Industries, Daewoo Shipbuilding & Marine Engineering —Hyundai Heavy Industries, STX Shipbuilding, have already expressed their reluctance to collaborate with Indian companies.
Three Japanese ship builders Mitsubishi Heavy Industries, Mitsui Engineering and Shipbuilding, Imabari Shipyard, too, are stepping down from participating in the GAIL tenders. There are Indian shipyards that are lobbying for contracts to build ships in India including L&T Shipbuilding, Pipavav Defence and Offshore Engineering & Cochin Shipyard.
The public sector firm has tied up 5.8 million tonnes per annum (mtpa) of LNG imports from the US starting 2017.
Indian firms would require six to seven years to deliver the first LNG ship, which does not meet GAIL’s requirement. Generally, it takes 30 months for Japanese and Korean companies to deliver an LNG ship.
In December 2011, GAIL signed a deal with Cheniere Energy Partners to buy 3.5 mtpa of LNG from the Sabine Pass Terminal in Louisiana on FoB basis. Deliveries would start between March and August 2018. In April 2013, GAIL booked another 2.3 mtpa capacity to export LNG from the Dominion Cover Point terminal in Maryland, delivery of which is expected from September 2017.
(Source: The Financial Express, November 21, 2014)
GOVERNMENT TO ROLL OUT BULK DRUG PHARMA POLICY WITHIN 15 DAYS
NEW DELHI: Government on Thursday said it will rollout a new pharma policy for bulk drugs in 10-15 days which will help the sector grow manifold over the next 5-7 years.
The government is working on industry friendly bulk drug pharma policy. It is likely to be rolled out by the Prime Minister Narendra Modi in next 10-15 days.
Pharmaceuticals Secretary V K Subburaj said at an event organised the PHD Chamber of Commerce and Industry.
The committee and task force set up by the government for preparing the policy have finalised their recommendations which have been sent to the Prime Minister’s Office, he said.
The policy will have various concessions for all stakeholders of the pharmaceuticals sector so that it is put on the growth trajectory, he said.
With this policy, the pharma sector which is of Rs 1.8 lakh crore in size at present, is likely to grow by 4-5 times in next 5-7 years with both its domestic production and exports rising phenomenally, Subburaj added.
Drug Controller General G N Singh said the regulator is addressing all the pending issues to liberate the pharma sector and to simplify export regulations which will be reflected in the forthcoming policy.
(Source: The Financial Express, November 21, 2014)
GOVT READIES POWER SECTOR DEBT RECAST PLAN
NEW DELHI: The government on Thursday indicated that it will soon finalize a bail-out plan for power projects hit by funding and clearance hurdles to revive the sector and boost supply in an energy-starved economy.
Sources said the government is setting up a high-powered group comprising RBI deputy governor and power and financial services secretaries to implement the recommendations of a high-level committee chaired by IIFCL chairman and managing director S B Nayar, which formally submitted its report on Thursday. The plan to restructure loans in the sector, on a case-by-case basis, was discussed during a meeting of bank chiefs on Thursday, which was also attended by finance minister Arun Jaitley.
The committee has suggested a slew of moves including an extension of commission date for power projects by one year and implement easier funding rules. For hydel projects this date is proposed to be extended by two years. Banks have to set aside funds for delayed projects as cash flows do not begin due to delays, said sources familiar with the matter. In addition, it has called for a new refinancing model for power projects hit by cancellation of coal blocks. While additional funds will be made available, the committee has recommended that the payment period should be 80-85% of the lease period.
(Source: The Times of India, November 21, 2014)
