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10 July 2014,

India’s Energy Policies and Budget 2014

Amit Bhandari, energy and environment fellow at Gateway House, comments on the budget and India’s energy policies.

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In the budget announced on 10 July 2014, India’s new government addressed some critical issues in energy security, mainly petroleum subsidies, coal production and gas pipelines.

Amit Bhandari, energy and environment fellow at Gateway House, comments on the budget and India’s energy policies.

Statement:

“In the budget allocations announced on 10 July 2014, India’s Finance Minister Arun Jaitley addressed the need to overhaul petroleum subsidies. If implemented, this will be a positive development for the petroleum sector. Market linked pricing is critical if investment in the energy sector is to be encouraged.

Arun Jaitley also spoke of measures to enhance coal production and provision of adequate coal supply to all power plants. Both of these are laudable goals, but implementation here is everything.  A single rate of customs duty on all forms of coal is a positive step as it will simplify life for power and steel companies importing coal.

At an operational level, the announcement for doubling the natural gas pipeline network to 30,000 km and encouraging natural gas as a kitchen fuel are positive for the country. This should help bring down India’s energy import bill as importing gas is cheaper than importing oil. India will be buying gas from more politically stable countries, which will ensure reliable and secure supply. Gas is also more environment friendly compared to oil.”

For more information or interview requests, please contact Reetika Joshi at joshi.reetika@gatewayhouse.in.