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It is a good augury; Defence and Finance Minister Arun Jaitley has resumed work after surgery. Handling two heavy portfolios, his indisposition was a matter for concern.

With results of state elections to Maharashtra and Haryana highly favourable to the BJP, the NDA II government has been busy attending to issues of governance. The much awaited reforms are being taken up in earnest. Important among these are those relating to the oil and coal sectors. These have been in crying need. Their absence has been depressing investment and growth.

In the oil sector the government has decontrolled pricing of diesel. Luckily, this has been done under two favourable developments: the first is the gradual increase in price of 50 paise per month spread over several months that helped in correcting the price anomaly. The second and, more important, is the fall, of around 25 per cent, in global crude prices. With these, the price of diesel charged by oil marketing companies have eliminated the huge subsidies; in fact even giving the companies handsome margins! The government could thus not only decontrol pricing diesel but even announce a reduction in price of around Rs 3.50 per litre.

Another major reform relates to the government fixing the price for natural gas produced in the country at $ 5.61 per unit. (Gas is measured in million British thermal units). Though this is much less than the $ 8.40 recommended by the Rangarajan Committee and accepted by the UPA II government and was slated for implementation from 01 April 2014, the Election Commission and later the new government deferred implementing this price increase.

IE has been arguing the need for more attractive pricing for natural gas that would encourage exploration and attract a lot of investments. The beneficiary in this is not just Reliance but government-owned explorers like ONGC. However, the anxiety of the government to protect the manufacture of fertilizers and power should impact this larger objective.

In regard to LPG which also involves humongous subsidy, the government plans to provide cash transfer directly to the consumers using the Aadhaar scheme. The recently introduced Jan Dhan Yojana would also facilitate this cash transfer.

Yet another scheme contemplated relates to taking off income tax assessees from the subsidy schemes which should also be welcome.

These two measures would help reduce substantially the huge subsidies incurred on the oil account.

The other major reform relates to the government following the directive of the Supreme Court in regard to the recovery of the large land allotted for 214 coal blocks for mining coal. The government proposes to adopt the e-auction method for allotting the coal mines through a transparent bidding system after reserving some portion of the mines for meeting the needs of NTPC and state electricity boards. This would enable the government to set right the inequity involved in arbitrary allocation of coal mines at throw away prices and is bound to get for the government substantial revenues.

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