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Market Watch. Pinterest Reddit. NEW DELHI: A group of ministers headed by finance minister Pranab Mukherjee has accepted most of the recommendations of the Ashok Chawla Committee that has suggested a transparent and market-based framework for allocation of natural resources. The decision follows recommendations by a committee of secretaries that was asked to give its views on the suggestions of the Chawla Committer that could be taken up for implementation.
The committee backed most of the recommendations, barring setting up of an upstream regulator for oil and de-reservation of forest land. The panel had suggested market-determined price of natural gas , open acerage licensing policy for oil blocks, creation of a special purpose vehicle on the lines of ultra mega power projects with all embedded clearances. For minerals likely to be found as surface deposits without making use of high technology, the state governments should be incentivised and enabled to take up exploration so that adequately prospected ore bodies can be put to bid, it had said.
It had also suggested that shale gas exploration policy be drafted only after assessing environmental impacts. There should be a complete transparency regarding chemicals used in the fracking of each shale gas wells, it said.
The committee headed by former finance secretary Ashok Chawla was formed earlier this year to recommend ways and means for distributing natural resources like minerals in a transparent manner. The sectors examined by the panel include land, mining, coal, petroleum, natural gas, telecom, forests and water.
The panel's key recommendations included making bidding for mines and mineral more transparent, competitive and broad-based. It had suggested that incidence and structure of royalty to be reviewed "through a transparent process" to represent a fair value for the mineral, since it is a primary source of revenue for the government.
The committee also pitched for open acreage licensing policy for allocation of oil and gas blocks in a move that could bring exploration and production business environment on par with global standards.
Under the open acreage policy, an exploration company can express its interest in a block any time as opposed to the current system of periodic auction of blocks by the government. Once a request for a block has been received under the open acreage policy, it would be offered through the normal tender process as in the current New Exploration Licensing Policy NELP wherein bids are invited through an international competitive bidding system for exploration of hydrocarbons in the country including deep water areas.
Read more on Ashok Chawla committee. Pranab Mukherjee. Natural gas. Exploration Licensing Policy. Add Your Comments. Follow us on. Download et app. Become a member. Pranab Mukherjee okays Ashok Chawla recommendations on transparent market pricing for natural gas. View: State governments can be better armed financially to fight Covid by issuing public health bonds. To see your saved stories, click on link hightlighted in bold.
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Ashok Chawla Committee punctures Manmohan Singh's claims on coal allocation
The Centre today told the Supreme Court that the Ashok Chawla committee report on distribution of natural resources for commercial exploitation has suggested market-related process and it does not mean only auction. Filing its reply in response to the apex court query, the Centre said "even when the committee has recommended adoption of market-related processes, the same cannot be seen as a recommendation for allocation only by auction. It further said the 69 out of 81 recommendation of the committee were accepted by the Group Of Ministers GOM but it was left for the individual ministry to implement it. On the last day of arguments on the Presidential reference seeking reconsideration of the apex court's judgment on 2G spectrum scam case laying down auction as the only mode of allocation of natural resources, the apex court had sought exact status of the recommendations. If Chawla committee recommendations are already accepted, then it gives a different connotation to the opinion sought on the reference. We must know whether the government in principle has accepted auction as the method for allocation of all natural resources," the bench had said.
Govt accepts 69 recommendations of Ashok Chawla committee
Red-faced over the 2G scam, the underproduction of gas from the KG Basin reported by Reliance Industries, and botched allocations to private parties of other natural resources such as land, the United Progressive Alliance government set up a committee in February, for policy recommendations on these issues. Finance Minister Pranab Mukherjee said in his Budget speech that the panel would focus on setting criteria for the pricing and allocation of natural resources. At present, the Centre takes these decisions, which makes resources - and thus economic growth - vulnerable to the politician-businessman nexus. Former Telecom Minister A. Raja's alleged favouring of some applicants for 2G licences, and the infiltration of Karnataka's Bharatiya Janata Party government by the Reddy brothers, are examples of this. The panel, headed by retired Finance Secretary Ashok Chawla, favours a move towards market-linked solutions.
Ashok Chawla Committee on Natural Resource Allocation
High powered committee formed to suggest mechanism for efficient distribution of natural resources such as telecom spectrum. The Union cabinet secretariat on 8 February set up a high powered committee headed by former finance secretary Ashok Chawla to suggest a roadmap for efficient and transparent distribution of scarce natural resources such as telecom spectrum. The committee includes key secretaries as members along with representatives from industry chambers. The committee is expected to make generic recommendations on the overall mechanism of allocating resources and take a sectoral view. Also it is required to review the pricing and policy issues to find models that do not compromise on public welfare for profit maximisation.