PM exhorts IRS probationers to trust the people



PM exhorts IRS probationers to trust the people


167 probationers of the Indian Revenue Service today called on the Prime Minister, Shri Narendra Modi. 


Interacting with the probationers, the Prime Minister exhorted them to keep a sense of trust for the people of India, in course of their work. He said an overwhelming majority of people in the country are law-abiding, and wish to comply with laws in the interest of the nation. He said the honest taxpayer should not be harassed, even as the officers perform their duty of implementing the Government’s revenue policy. 


He added that the officers should ensure that all people-friendly initiatives of the Government reach the people on priority. 

Replying to a series of questions from the young officer-trainees, the Prime Minister said that officers must feel that each and every citizen of this country is a part of his family. He said that if this spirit prevails, the officers will be able to work with vigour and enthusiasm, and even the question of exhaustion will not arise. 

In the course of the 45 minute session, the Prime Minister recalled several anecdotes from his life and his political experience, to explain the importance of a sensitive and humane approach, that is required from civil servants.

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Approval for Amendment to the Sikh Gurudwaras Act, 1925 



The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi today considered the proposal of the Ministry of Home Affairs regarding amendment in the Sikh Gurdwaras Act, 1925 to remove the exception given to Sahjdhari Sikhs in 1944 to vote in the elections to the members of the Board and the Committees constituted under the Sikh Gurdwaras Act, 1925, by amending the Act through the Parliament.

            Accordingly, the Cabinet has, approved the propopsal of the Ministry of Home Affairs to amend the Sikh Gurdwaras Act, 1925 through the Parliament retrospectively with effect from 08.10.2003.

            The said amendment in the Act was also carried out by the Ministry of Home Affairs’ Notification dated 08.10.2003 in exercise of the powers conferred by the Parliament under section 72 of the Punjab Re-organisation Act, 1966.  However, the said Notification was quashed by the High Court of Punjab and Haryana, vide order dated 20.12.2011, leaving it for the appropriate and competent Legislature to decide as to whether or not to amend the Act to that effect.


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Major Policy initiatives to give a boost to Petroleum and Hydrocarbon Sector 


In a major policy drive to give a boost to petroleum and hydrocarbon sector, the Government has unveiled a series of initiatives. The Union Cabinet and the Cabinet Committee on Economic Affairs in its meeting today has taken the following decisions –

1.     Hydrocarbon Exploration Licensing Policy, HELP:  An innovative Policy for future which provides for a uniform licensing system to cover  all hydrocarbons such as oil, gas, coal bed methane etc. under a single licensing framework.

2.     Marketing and Pricing freedom for new gas production from Deepwater, Ultra Deepwater and High Pressure-High Temperature Areas.

3.     Policy for grant of extension to the Production Sharing Contracts for small, medium sized and discovered fields

4.     Cancellation of the Ratna offshore field award from ESSAR Oil Limited and assigning it to the original licensee, ONGC. .


Hydrocarbon Exploration Licensing Policy, HELP: Innovative Policy for future   

The present policy regime for exploration and production of oil and gas, known as New Exploration Licensing Policy (NELP), been in existence for 18 years. Over the years, various problems and issues have arisen.

Presently, there are separate policies and licenses for different hydrocarbons.  There are separate policy regimes for conventional oil and gas, coal-bed methane, shale oil and gas and gas hydrates.  Different fiscal terms are also in force for allocation of acreages for exploration for different hydrocarbons.  In practice, there is overlapping of resources between different contracts. Unconventional hydrocarbons (shale gas and shale oil) were unknown when NELP was framed. This fragmented policy framework leads to inefficiencies in exploiting natural resources. For example, while exploring for one type of hydrocarbon, if a different one is found, it will need separate licensing, adding to cost.

The Production Sharing Contracts (PSCs) under NELP are based on the principle of “profit sharing”.  When a contractor discovers oil or gas, he is expected to share with the Government the profit from his venture, as per the percentage given in his bid.  Until a profit is made, no share is given to Government, other than royalties and cesses.  Since the contract requires the profit to be measured, it becomes necessary for the cost to be accounted for and checked by the Government.  To prevent loss of Government revenue, these are requirements for Government approval at various stages to prevent the contractor from exaggerating the cost.  Activities cannot be commenced till the approval is given.  This process of approval of activities and cost gives the Government a lot of discretion and has become a major source of delays and disputes.  Many projects have been delayed for months and years due to disagreement between the Government and the contractor regarding the necessity or lack of necessity for particular items of cost, and the correctness of the cost.

Another feature of the current system is that exploration is confined to blocks which have been put on tender by the Government.  There are situations where exploration companies may themselves have information or interest regarding other areas where they may like to pursue exploration.  Currently these opportunities remain untapped, until and unless Government brings them to bidding at some stage.

The pricing of gas in the current system has undergone many changes and witnessed considerable litigation.  Currently, the producer price of gas is fixed administratively by the Government.  This has led to loss of revenue, a large number of disputes, arbitrations and court cases.

The current policy regime, in fixing royalties, does not distinguish between shallow water fields (where costs and risks are lower) and deep/ultra-deep water fields where risks and costs are much higher.

The country currently faces a situation where oil and gas constitutes a major and increasing share of total imports.  Oil production has stagnated while gas production has declined.  There is a need for concerted policy measures to stimulate domestic production.  Keeping in view this objective, the Government has enunciated a new policy regime for exploration licensing, the Hydrocarbon Exploration and Licensing Policy, HELP with the following key features:

·        There will be a uniform licensing system which will cover all hydrocarbons, i.e. oil, gas, coal bed methane etc. under a single license and policy framework.
·        Contracts will be based on “biddable revenue sharing”.  Bidders will be required to quote revenue sharein their bids and this will be a key parameter for selecting the winning bid.  They will quote a different share at two levels of revenue called “lower revenue point” and “higher revenue point”.  Revenue share for intermediate points will be calculated by linear interpolation.  The bidder giving the highest net present value of revenue share to the Government, as per transparent methodology, will get the maximum marks under this parameter.

·        An Open Acreage Licensing Policy will be implemented whereby a bidder may apply to the Government seeking exploration of any block not already covered by exploration.  The Government will examine the Expression of Interest and justification. If it is suitable for award, Govt. will call for competitive bids after obtaining necessary environmental and other clearances.  This will enable a faster coverage of the available geographical area.

·        A concessional royalty regime will be implemented for deep water and ultra-deep water areas.  These areas shall not have any royalty for the first seven years, and thereafter shall have a concessional royalty of 5% (in deep water areas) and 2% (in ultra-deep water areas).

·        In shallow water areas, the royalty rates shall be reduced from 10% to 7.5%.

·        The contractor will have freedom for pricing and marketing of gas produced in the domestic market on arms length basis.  To safeguard the Government revenue, the Government’s   share of profit will be calculated based on the higher of prevailing international crude price or actual price.

The new policy regime marks a generational shift and modernization of the oil and gas exploration policy. It is expected to stimulate new exploration activity for oil, gas and other hydrocarbons and eventually reduce import dependence.  It is also expected to create substantial new job opportunities in the petroleum sector.  The introduction of the concept of revenue sharing is a major step in the direction of “minimum government maximum governance”, as it will not be necessary for the Government to verify the costs incurred by the contractor. Marketing and pricing freedom will further simplify the process.  These will remove the discretion in the hands of the Government, reduce disputes, avoid opportunities for corruption, reduce administrative delays and thus stimulate growth.

Marketing and Pricing freedom for new gas production from Deepwater, Ultra Deep water and High Pressure-High Temperature Areas

          Imports of hydrocarbons occupy a large share of India’s total imports.  Currently, over three-quarters of the domestic requirement of crude oil and approximately a third of domestic requirement of gas are met through imports.  In terms of macro-economic impact and also in terms of energy security, it is of paramount importance that domestic production of hydrocarbons be increased.

Much of the unexploited oil and gas available in India is in areas characterized by deep water/ultra-deep water or high pressure/high temperature.  The Cabinet Committee on Economic Affairs approved a mechanism for pricing of domestically produced natural gason 18.10.2014. Recognizing the need for incentivizing gas production from deep water, ultra deep water and High Pressure-High Temperature (HPHT) areas on account of higher costs and higher risks involved in exploitation of gas from such areas, in principle approval was also given for a premium on the gas price for the gas to be produced from new discoveries from such areas.

          Subsequent to the decision of the CCEA, global oil and gas prices have fallen substantially and are currently at the lowest level for over a decade, affecting the attractiveness of the sector to potential investors.  There are a number of discoveries of gas in deep water/ultra- deep water, high pressure/high temperature areas which have not been developed. ONGC and other operators have been requesting a higher price for gas to be produced from such fields, without which they may not be economical to bring to production.  Meanwhile, domestic gas production is showing a declining trend.  It has witnessed a decline of 17% in two years from 40.66 BCM in 2012-13, it fell to 33.65 BCM in 2014-15. With the economy growing at over 7%, demand for petroleum products including gas is increasing.  The sector thus faces a situation of rising demand, falling production and consequently rapid increase in imports. 

          In this background, after extensive consultations, it was felt that rather than fixing a premium, it would be more appropriate to provide marketing and pricing freedom to the gas to be produced from the new discoveries as well as existing discoveries which are yet to commence production.  However, in order to protect user industries from market imperfections, this freedom would be accompanied by a price ceiling based on opportunity cost of imported fuels.

After a careful consideration of the country’s strategic, economic and environmental interests and interests of both producing and consuming industries, a new policy is being introduced which is balanced. The salient features of the new policy are as follows:

·              For all the discoveries in deep water/ultra-deep water/high temperature/ high pressure areas which are yet to commence commercial production as on 1.1.2016 and for all future discoveries in such areas, the producers will be allowed marketing freedom including pricing freedom.

·              To protect user industries from any market imperfections, this freedom would be subject to a ceiling price on the basis of landed price of alternative fuels.  To the extent that domestic gas can be produced and sold at a price below import parity price, it will not only benefit the overall economy by boosting employment and GDP and reducing imports, but also benefit the user industry by lowering the average price.

·              The ceiling shall be based on publicly available prices of substitute fuels and the method of calculation shall be communicated transparently.

·              The ceiling price shall be calculated as, lowest of the (i) Landed price of imported fuel oil (ii) Weighted average import landed price of substitute fuels (namely coal, fuel oil and naphtha) (iii) Landed price of imported LNG. The weighted average import landed price of substitute fuels in (ii) above will be defined as:  0.3 x price of coal + 0.4 x price of fuel oil + 0.3 x price of naphtha.

          The Ministry of Petroleum and Natural Gas will notify the periodic revision of gas price ceiling under these guidelines.

          In the case of existing discoveries which are yet to commence commercial production as on 1.1.2016, if there is pending arbitration or litigation filed by the contractors directly pertaining to gas pricing covering such fields, this policy guideline shall apply only on the conclusion/withdrawal of such litigation/arbitration and the attendant legal proceedings.

          All gas fields currently under production will continue to be governed by the pricing regime which is currently applicable to them.

          Production Enhancement:

The decision is expected to improve the viability of some of the discoveries already made in such areas and also would lead to monetization of future discoveries as well. The reserves which are expected to get monetized are of the order of 6.75 tcf or 190 BCM or around 35 mmscmd considering a production profile of 15 years. The associated reserves are valued at 28.35 Billion USD (1,80,000 Crore) The country’s present gas production is around 90 mmscmd. Besides, these there are around 10 discoveries which have been notified and whose potential is yet to be established.

There would be substantial employment generated during the development phase of these discoveries and a part of it would continue during the production phase of the block. As an illustration, ONGC has estimated that in the development of discoveries in the block KG-DWN-98/2, there would be deployment of 3850 direct skilled workers.  Besides, these there would be around 20000 persons required during the construction phase.  These personnel will take care of fabrication workshops, marine crew in barges, civil works of onshore terminal etc. 

Policy for grant of extension to the Production Sharing Contracts for small, medium sized and discovered fields

28 small, medium sized fields discovered by National Oil Companies (ONGC and OIL) were awarded to Private Joint Ventures through Production Sharing Contract (PSC) between 1994-1998 for periods varying from 18 to 25 years.  These Contracts are effective from different points of time.  The earliest of PSCs were signed in the year 1994.  Out of 28 PSCs, two fields in which the duration of the PSC had expired in 2013 had been granted extension up to 2018.  The remaining PSCs would start expiring from 2018.

For many of these fields the recoverable reserves are not likely to be produced within the remaining duration of contract.  Further, in certain fields where additional recovery of hydrocarbons can be obtained only through capital intensive Enhanced Oil Recovery/Improved Oil Recovery (EOR/IOR) Projects, the payback period would extend beyond the current duration of the contract.

A uniform and transparent policy for extension of the remaining reserves is required to be put in place to enable the contractors to take investment decisions for exploitation of the remaining reserves. It is expected to expedite decision making, enable timely planning by the contractors, and lead to increased oil and gas production.

          The following process and guidelines for extension of contracts for small and medium sized discovered fields is being put in place:

(i)                The contractor should submit the application for extension of Contract at least 2 years in advance of the expiry date, but not more than 6 years in advance. The Director General Hydrocarbons (DGH) will make a recommendation within 6 months of submission of application by the contractor. The Government will take a decision on the request for extension within 3 months of receipt of the proposal from DGH.

(ii)             The Government share of Profit Petroleum during the extended period of contract shall be 10% higher than the share as calculated using the normal PSC provisions in any year during the extended period. For example, if the current profit share, is 10 or 20%, it shall become 20 or 30% respectively.

(iii)           During the extended period of Contract, the royalty and cess shall be payable at prevailing rates and not at concessional rates stipulated in the contracts.

(iv)           The extension of these PSCs would be considered for 10 years both for oil and gas fields or economic life of the Field, whichever is earlier.

Production Enhancement:

The policy for PSC extension will lead to production of hydrocarbons beyond the present term of PSC. The reserves which are likely to get monetized during the extended period are of the order of 15.7 MMT of oil and 20.6 MMT of Oil Equivalent of gas. The reserves associated with this field would lead to monetization of reserves worth USD 8.25 Billion (around 53000 Crore). The monetization of these reserves would require an additional investment of USD 3 to 4 Billion.



Employment Generation Potential:
The extension of these contracts is expected to bring extra investments in the fields and would generate both direct (related to field operations) and indirect employment (related to service industry associated with these fields). 
The extension of contracts would also envisage that the present employment levels in these fields are maintained for a longer period of time.
Presently, medium sized fields are employing around 300 personnel for field operations while for small sized fields this would be around 40 to 60 persons.
The investments in these fields may also lead to construction and laying of facilities which would employ several unskilled labourers, over and above the skilled labourers.
Transparency and Minimum Government and Maximum Governance:

With a view to enable the E&P companies to take investment decisions for exploitation of the remaining reserves this extension policy has been approved so as to grant extensions in a fair and transparent manner.

The policy aims at bringing out clear terms of extension so that the resources can be expeditiously exploited in the interest of energy security of the country and improving the investment climate.

Ratna Field

The Ratna Offshore Field, located south-west of Mumbai, was discovered in 1971 by ONGC.  The field was tendered out and tentatively awarded to ESSAR Oil Ltd. in 1996.  Ever since then due to a number of administrative and legal uncertainties, which were raised and examined at various times,the contract was never finalized.  As this field has remained without exploitation for over 20 years since its initial tendering, the Government has now decided that it will be assigned to ONGC on nomination basis. This will enable this long pending and proven oil reserve to come into production, and create new employment.
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Cabinet approves Pradhan Mantri Ujjwala Yojana - Scheme for Providing Free LPG connections to Women from BPL Households 

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved Pradhan Mantri Ujjwala Yojana - Scheme for Providing Free LPG connections to Women from BPL Households. Under the scheme, Rs 8000 crore has been earmarked for providing five crore LPG connections to BPL households. The Scheme provides a financial support of Rs 1600 for each LPG connection to the BPL households. The identification of eligible BPL families will be made in consultation with the State Governments and the Union Territories. This Scheme would be implemented over three years, namely, the FY 2016-17, 2017-18 and 2018-19. 

This is the first time in the history of the country that the Ministry of Petroleum and Natural Gas would implement a welfare scheme benefitting crores of women belonging to the poorest households. 

In our country, the poor have limited access to cooking gas (LPG). The spread of LPG cylinders has been predominantly in the urban and semi-urban areas with the coverage mostly in middle class and affluent households. But there are serious health hazards associated with cooking based on fossil fuels. According to WHO estimates, about 5 lakh deaths in India alone due to unclean cooking fuels. Most of these premature deaths were due to non-communicable diseases such as heart disease, stroke, chronic obstructive pulmonary disease and lung cancer. Indoor air pollution is also responsible for a significant number of acute respiratory illnesses in young children. According to experts, having an open fire in the kitchen is like burning 400 cigarettes an hour. 

Providing LPG connections to BPL households will ensure universal coverage of cooking gas in the country. This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas. 

In this direction, Finance Minister in Budget speech on 29.2.2016 had announced a budgetary provision of Rs. 2000 crore for 2016-17 to provide deposit free LPG connections to 1.5 crore women belonging to the Below Poverty Line (BPL) families. Further, the Budget announced that the Scheme will be continued for two more years to cover 5 crore households. 

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Hydrocarbon Exploration and Licensing Policy (HELP) 

The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the Hydrocarbon Exploration and Licensing Policy (HELP).

Four main facets of this policy are:
                                i.           uniform license for exploration and production of all forms of hydrocarbon,
                              ii.           an open acreage policy,
                            iii.           easy to administer revenue sharing model and
                            iv.           marketing and pricing freedom for the crude oil and natural gas produced.

The decision will enhance domestic oil & gas production, bring substantial investment in the sector and generate sizable employment. The policy is also aimed at enhancing transparency and reducing administrative discretion.
The uniform licence will enable the contractor to explore conventional as well as unconventional oil and gas resources including CBM, shale gas/oil, tight gas and gas hydrates under a single license.  The concept of Open Acreage Policy will enable E&P companies choose the blocks from the designated area. 
Present fiscal system of production sharing based on Investment Multiple and cost recovery /production linked payment will be replaced by a easy to administer revenue sharing model. The earlier contracts were based on the concept of profit sharing where profits are shared between Government and the contractor after recovery of cost. Under the profit sharing methodology, it became necessary for the Government to scrutinize cost details of private participants and this led to many delays and disputes. Under the new regime, the Government will not be concerned with the cost incurred and will receive a share of the gross revenue from the sale of oil, gas etc. This is in tune with Government’s policy of “Ease of Doing Business”.
Recognising the higher risks and costs involved in exploration and production from offshore areas, lower royalty rates for such areas have been provided as compared to NELP royalty rates to encourage exploration and production.  A graded system of royalty rates have been introduced, in which royalty rates decreases from shallow water to deepwater and ultra-deep water. At the same time, royalty rate for onland areas have been kept intact so that revenues to the state governments are not affected. On the lines of NELP, cess and import duty will not be applicable on blocks awarded under the new policy.  This policy also provides for marketing freedom for crude oil and natural gas produced from these blocks.  This is in tune with Government’s policy of “Minimum Government –Maximum Governance”
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Removal of the minimum capacity utilization criteria for SSP Manufacturing Units to be eligible for subsidy under Nutrient Based Subsidy (NBS) Scheme. 

In order to push major policy reforms in the fertilizer sector, the Union Cabinet, chaired by the Prime Minister Shri Narendra Modi today approved the proposal for removing the minimum capacity utilization criteria for the Single Super Phosphate (SSP) units to be eligible for the subsidy under the Nutrient Based Subsidy (NBS) Scheme with immediate effect. 

This is in continuation of other policy reforms made recently which include New Urea Policy, 2015 and Gas Pooling for urea production. Due to the emphasis on promoting energy efficiency and rationalisation of gas pricing mechanism, highest ever urea production in the period so far has been achieved this year. It is expected that there will be an additional production of 17 lakh MT of urea this year as compared to last year. Moreover, to prevent diversion to non-agricultural use and to enhance productivity, 100% of urea is now neem coated. 

Further, policy on promotion of City Compost is a major initiative which aims at the twin objectives of making cities cleaner and utilizing the city garbage as compost for improving soil health. Under this policy, for the first time market development assistance of Rs.1500 per MT will be provided to scale up production and consumption of the product. 

SSP is a phosphatic multi-nutrient fertilizer, which contains 16% phosphate, 11% sulphur, 16% calcium and some other essential micro-nutrients. Because of the simple production technique, it is one of the cheapest chemical fertilizer available. It is more suited for crops like oilseeds, pulses, horticulture, vegetables, sugarcane, etc. 

From 01.10.2009, it was made mandatory for the SSP units to utilize minimum 50% of their recognised production capacity or to produce 40000 MT, whichever is less, per year to become eligible for subsidy. There was some capacity addition in the beginning, but for the last four years the production and consumption of SSP in the country has remained more or less stagnant. 

Due to this minimum capacity utilization criteria, large number of small SSP units which failed to reach this level were not able to avail of subsidy, in spite of having passed the subsidy benefit to the farmer in the form of lower MRP. Many units because of this apprehension, did not commence production. Non eligibility to receive subsidy created financial problems including working capital issues for the SSP units, which also resulted in loss of capacity. The new units were also finding it difficult to achieve this production criteria as reasonable time is required to establish their brand name and to increase the market share due to inadequate availability of dealers’ network. Further, this minimum production criteria was applicable only to SSP and not to other P&K fertilizers. 

This new policy to remove the minimum capacity utilization criterion would put the SSP units on the same footing as other fertilizers and they would be eligible for subsidy irrespective of quantity of SSP produced and sold for agriculture purposes. 

This new policy will help revive smaller SSP units and encourage new SSP units to come up in the country to further boost indigenous production of SSP. It would also provide freedom to the SSP manufacturers to plan their production as per the market dynamics. SSP is also considered as a substitute to DAP, which is largely import based. Growth of SSP industry will not only increase domestic production of phosphatic fertilizers in the country but also its consumption and partly act as a substitute for more costly DAP. 

This would also encourage the evolution of a robust mixed fertilizer market with diversified micro-nutrients to promote balanced fertilization of the soil. 

This new policy would be uniformly applicable to all fertilizers and provide a level playing field. 

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Approval for Proposal for Extension of the value date of the Existing Currency Swap facility of USD 1.1 billion availed by Central Bank of Sri Lanka (CBSL) and provision of a new special currency swap to Sri Lanka for USD 700 million 

The Union Cabinet under the Chairmanship of Prime Minister Shri Narendra Modi has given its ex-post facto approval to the proposal for extension of the value date to 8th March 2016 of the Existing Currency Swap facility of USD 1.1 billion availed by Central Bank of Sri Lanka (CBSL) from Reserve Bank of India (which was due to be repaid on 3rd March 2016). 

Approval of this proposal will provide a temporary relief to Sri Lanka till alternative arrangement is in place. 

The Union Cabinet also gave its approval for providing a special swap of USD 700 million to Sri Lanka for a period of 3 months or till the time Sri Lanka avails the IMF facility whichever is earlier. 

Approval of this proposal shall help Sri Lanka in strengthening its economic stability and official reserves which have witnessed downward trend in 2015 owing to the adverse impact of the expected interest rate hikes in the United States. This will further foster India’s bilateral relations and economic ties with Sri Lanka, which is India’s important partner in SAARC and South Asia. 

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Memorandum of Understanding between India and Bahrain on Cooperation for Prevention of Human Trafficking especially trafficking in Women and Children 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for a Memorandum of Understanding (MoU) between India and Bahrain on cooperation for prevention of human trafficking especially trafficking in women and children; rescue, recovery, repatriation and re-integration of victims of trafficking. 

This MoU will strengthen the bonds of friendship between the two countries and increase the bilateral cooperation on the issues of prevention, rescue, recovery and repatriation related to human trafficking especially women and children expeditiously. 

The MoU is expected to be signed during the Home Ministers upcoming visit to Bahrain in the first week of April 2016. 

The following are the salient features of the Memorandum of Understanding between India and Kingdom of Bahrain: 

i. To strengthen cooperation to prevent to all forms of humantrafficking, especially that of women and children and ensurespeedy investigation and prosecution of traffickers and organizedcrime syndicates in either country. 

ii. Taking preventive measures that would eliminate humantrafficking in women and children and in protecting the rights off victims of trafficking. 

iii. Anti-trafficking Cells and Task Force will work on both sides toprevent human trafficking. 

iv. Police and other concerned authorities will work in closecooperation and exchange information which can be used to interdict human traffickers, 

v. The repatriation of victims would be done as expeditiously aspossible and home country will undertake the safe and effective re-integration of the victims, 

vi. A Joint Task Force with representatives from both sides would beconstituted to monitor the working of the MoU. 

Background: 

As a destination of trafficking, South Asian countries are mainly affected by domestic trafficking, or trafficking from the neighboring countries. However, South Asian victims are also increasingly detected in the Middle East. 

India is a source and transit country as far as trafficking to Bahrain is concerned. On the other hand, Bahrain is a destination country for men and women subjected to trafficking in persons, specifically forced labour and forced prostitution. Men and women from South Asia migrate voluntarily to Bahrain to work as domestic workers or as unskilled laborers in theconstruction and service industries. However, some face conditions of forced labour after arriving in Bahrain, through use of such practices as unlawful withholding of passport, restrictions on movement, contract substitution, non¬payment of wages, threats, and physical or sexual abuse. 

The reinforcement of anti-trafficking efforts at all levels between the Kingdom of Bahrain and India is essential for prevention and protection of victims. This requires mutual cooperation among both the countries for intelligence sharing, joint investigation and a coordinated response to the challenges of human trafficking. For this purpose, it is proposed to sign an MoU with the Kingdom of Bahrain. India has already signed one MoU to prevent trafficking with Bangladesh. 

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Memorandum of Understanding between India and International Monetary Fund for setting up of South Asia Regional Training and Technical Assistance Center in India by the International Monetary Fund 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for entering into the Memorandum of Understanding (MoU) between India and International Monetary Fund (IMF) for setting up of South Asia Regional Training and Technical Assistance Center (SARTTAC) in India by the IMF. It also authorised the Finance Minister to approve related decisions in respect of India’s contribution for setting up of the centre, including Letter of Understanding for financial contribution by India, site of the SARTTAC, representative of India on the Steering Committee on SARTTAC, etc. 

The SARTTAC will be a collaborative venture between the IMF, the member countries that is Bangladesh, Bhutan, India, Maldives, Nepal and Sri Lanka and development partners for supporting the capacity development needs of the members. Additional member countries could join SARTTAC at a later stage. SARTTAC will also selectively cater to the capacity building needs at the State level, especially in India. 

The IMF is organising a Regional Conference on ‘Advancing Asia: Investing for the Future’ in New Delhi. The MoU may be entered into during this Conference. 

The MoU will help in capacity building of Government officials including state level in macro, fiscal, monetary policies by the IMF and greater coordination between the six member countries of South Asia. 

Capacity development at Central and State level in fiscal and financial policies will enhance revenue mobilization and development of policies aimed at more effective public and financial management. This will result in economic development and inclusive growth in the country. 

Capacity development by the IMF will bring in the best practices from across the globe, as well as the South Asian region, resulting in innovative solutions to fiscal, monetary and financial issues and effective response through use of IT and innovative techniques. 

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Amendment to the Mines and Minerals (Development and Regulation) Act, 1957 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for the amendment to the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957). The amendment will allow transfer of captive mining leases not granted through auction.Transfer of captive mining leases, granted otherwise than through auction, would allow mergers and acquisitions of companies and facilitate ease of doing business for companies to improve profitability and decrease costs of the companies' dependent on supply of mineral ore from captive leases. The transfer provisions will also facilitate banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged. 

The amendment will benefit lessees desirous of transferring the captive leases not granted through auction. It will also benefit banks and financial institutions. It does not entail any recurring or non-recurring expenditure on the Government. 

Background:

The MMDR Act, 1957, as amended through the MMDR Amendment Act, 2015, restricted the scope of transferability of concessions granted through auction. It was restricting the mergers and acquisitions of companies and was impeding the ease of doing business for companies dependent on supply of mineral ore from captive leases. The provision was coming in the way of banks and financial institutions to liquidate stressed assets where a company or its captive mining lease is mortgaged. 

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Creation of the post of National Authority (Joint Secretary level) in the Ministry of Coal under the Coal Mines (Special Provisions) Act, 2015 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for creation of a post of Nominated Authority (JS level) in Pay Band 4: Rs. 37,400-67,000 plus Grade Pay of Rs. 10,000 and other posts of officers and staff to assist the Nominated Authority in the Ministry of Coal. It will facilitate smooth functioning of the office of the National Authority under the Coal Mines (Special Provisions) Act, 2015 so that the objectives of the Act are achieved. 

The creation of post will help in effective functioning of the Nominated Authority which would resolve the uncertainties that had affected the coal sector and improve coal availability to the core sectors of the economy thereby enabling it to develop at faster pace. 

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Signing and Ratification of the BIMSTEC Convention on Mutual Legal Assistance in Criminal Matters 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its approval for signing and ratification of the Bay of Bengal Initiative on Multi Sectoral Technical and Economic Cooperation (BIMSTEC) Convention on Mutual Legal Assistance in Criminal Matters. The Ministry of Home Affairs has been designated as the Central Authority under Article 15 of the Convention. The BIMSTEC comprises of seven countries viz., Bangladesh, Bhutan, India, Myanmar, Nepal, Sri Lanka and Thailand. 

The establishment of regional arrangements for mutual assistance in criminal matters will greatly contribute to more effective cooperation in the control of criminal activities. The Convention aims to extend widest measures of assistance to each other through mutual cooperation for enhancing capability and effectiveness of the Member States in investigation and prosecution of crimes, including crimes related to terrorism, transnational organized crime, drug trafficking, money laundering and cyber-crimes. After signing as well as ratification of the Convention from the Indian side, the Instrument of Ratification will be deposited to the Secretary-General of. BIMSTEC and the Convention shall enter into force on 30th day of the deposit of last instrument of ratification. 

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Memorandum of Understanding signed between India and United Arab Emirates on Technical Cooperation in Cyber Space and Combating Cyber-Crime 

The Union Cabinet chaired by the Prime Minister Shri Narendra Modi has given its ex-post approval for the Memorandum of Understanding (MoU) between India and United Arab Emirates (UAE) on Technical Cooperation in Cyber Space and Combating Cyber-Crime signed last month. 

This agreement would provide help in handling of the issues related to the cyber-crime between the two countries. Both the countries shall cooperate in cyber space and combating cyber-crime in all forms, particularly through coordination and exchange of information in relation with cyber crime, cooperation and training in cyber-crime investigation, etc. between India and UAE. The Ministry of Home affairs will be the nodal agency on the Indian side responsible for the implementation of this agreement. Similarly, the nodal agency of the UAE side will be the Directorate General of Criminal Security, Ministry of Interior and the State Security Department with regards to matters pertaining to State security, terrorism and crimes related to unconventional weapons. 

The enhancement of technical cooperation between India and UAE in cyber space and combating cyber-crime comes in the wake of the serious threat of cyber-crime on the security, interest and safety of the people. 

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Decision on Marketing including Pricing freedom for the gas to be produced from Discoveries in High Pressure-High Temperature, Deepwater and Ultra Deepwater Areas 

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approveda proposal to grant marketing including pricing freedom for the gas produced from High Pressure High Temperature, Deepwater and Ultra Deepwater areas. The marketing freedom so granted would be capped by a ceiling price arrived at on the basis of landed price of alternative fuels. 

The policy guidelines would be applicable to future discoveries as well as existing discoveries which are yet to commence commercial production as on 1.1.2016. However, in case of existing discoveries which are yet to commence commercial production as on 1.1.2016, if there is pending arbitration or litigation filed by the contractors directly pertaining to gas pricing covering such fields, this policy guideline shall be made applicable only on the conclusion/ withdrawal of such litigation/ arbitration and the attendant legal proceedings. All gas fields currently under production will continue to be governed by the pricing regime which is currently applicable to them. 

The ceiling price in US $ per mmbtu (GCV) shall be the, lowest of the (i) Fuel oil import landed price (ii) Weighted average import landed price of substitute fuels (0.3 x price of coal + 0.4 x price of fuel oil + 0.3 x price of naphtha) and (iii) LNG import landed price, whichever is lower. 

The landed price-based ceiling will be calculated once in six months and applied prospectively for the next six months. The price data used for calculation of ceiling price in US $ per mmbtu (GCV) shall be the trailing four quarters data with one quarter lag. Director General of Petroleum Planning and Analysis Cell (DG, PPAC) under the Ministry of Petroleum and Natural Gas will notify the periodic revision of gas price ceiling under these guidelines. 

Production Enhancement: 

The decision is expected to improve the viability of some of the discoveries already made in such areas and also would lead to monetization of future discoveries as well. The reserves which are expected to get monetized are of the order of 6.75 tcf or 190 BCM or around 35 mmscmd considering a production profile of 15 years. The associated reserves are valued at 28.35 Billion USD (1,80,000 Crore) The country’s present gas production is around 90 mmscmd. Besides, these there are around 10 discoveries which have been notified and whose potential is yet to be established. 

Employment Generation: 

The decision is expected to result into monetization of the 28 discoveries mentioned above which can result into substantial investment by the contractors. 

There would be substantial employment generated during the development phase of these discoveries and a part of it would continue during the production. 

ONGC has estimated that in the development of discoveries in the block KG-DWN-98/2, there would be deployment of 3850 direct skilled labours. Besides, these there would be around 20,000 persons required during the construction phase. GSPC presently in the block KG-OSN-2001/3 is deploying around 690 personnel in the block. 

Transparency and Minimum Government and Maximum Governance:

Government will not interfere in the price fixation for every block covered under the policy. 

Provision of ceiling to balance the requirements of consuming sectors 

Incentivize upstream investment and not getting into unnecessary details. 

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Policy for the Grant of Extension to the Production Sharing Contracts signed by Government awarding small, medium sized and discovered fields to privateJoint Ventures 

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved a policy for grant of extension to the Production Sharing Contracts for small and medium sized discovered fields. This extension policy deals with 28 fields. Of these 27 fields (small and medium sized fields) were awarded as a result of two rounds of bidding during 1991 to 1993, and one (PY-3) was separately put to bidding as discovered field. For many of these fields the recoverable reserves are not likely to be produced within the remaining duration of contract period of these PSCs. Further, in certain fields where additional recovery of hydrocarbons can be obtained only through capital intensive Enhanced Oil Recovery / Improved Oil Recovery (EOR/IOR) Projects, the payback period would extend beyond the current duration of PSC. 

The Government share of Profit Petroleum during the extended period of contract shall be 10% higher for both small and medium sized fields, than the share as calculated using the normal PSC provisions in any year during the extended period and hence will vary from year to year based on Investment Multiple (IM) /Post Tax Rate of Return (PTRR). During the extended period of Contract, the royalty and cess shall be payable at prevailing rates (of nomination regime). Royalty and cess will be payable by all the contractors in proportion to their participating interest. This will lead to additional government revenue of Rs. 2890 Crores on account of additional royalty and cess as compared to present concessional regime in these blocks. 

Besides these fiscal terms and conditions, the policy brings out detailed guidelines regarding pre-requisites for grant of extension, criterion for evaluation of request, time frame for consideration of request, duration of extension, seat of arbitration etc. 

Production Enhancement: 

The policy for PSC extension will lead to production of hydrocarbons beyond the present term of PSC. The reserves which are likely to get monetized during the extended period are of the order of 15.7 MMT of oil and 20.6 MMT of Oil Equivalent of gas. The reserves associated with this field would lead to monetization of reserves worth USD 8.25 Billion (around 53000 Crore). The monetization of these reserves would require an additional investment of USD 3 to 4 Billion. 

Employment Generation Potential: 

The extension of these contracts is expected to bring extra investments in the fields and would generate both direct (related to field operations) and indirect employment (related to service industry associated with these fields). 

The extension of contracts would also envisage that the present employment levels in these fields are maintained for a longer period of time. 

Presently, medium sized fields are employing around 300 personnel for field operations while for small sized fields this would be around 40 to 60 persons. 

The investments in these fields may also lead to construction and laying of facilities which would employ several unskilled labourers, over and above the skilled labourers. 

Transparency and Minimum Government and Maximum Governance: 

With a view to enable the E&P companies to take investment decisions for exploitation of the remaining reserves this extension policy has been approved so as to grant extensions in a fair and transparent manner. 

The policy aims at bringing out clear terms of extension so that the resources can be expeditiously exploited in the interest of energy security of the country and improving the investment climate. 

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Award of Ratna and R-series Fields 

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved cancellation of the Letter of Award dated 12.03.1996 issued in favour of consortium of M/s. Essar Oil Limited and M/s. Oil Pacific UK Ltd awarding the medium sized discovered field of Ratna& R-Series and decided to revert the Ratna and R-Series Fields to ONGC. 

These Fields were planned to be awarded under the Discovered Field Policy of the Government announced during 1992 - 93 in the wake of economic liberalization. It was envisaged that the development of these fields through private sector / joint sector development by signing the Production Sharing Contract (PSC) would facilitate in creating additional value for the country from such projects. However, the PSC in respect of these Fields could not be signed during last two decades owing to number of reasons and the intended contribution of the Ratna and R-series fields in achievement of overall policy objective could not be attained. 

The Government noted that in the intervening period of more than twenty years there have been substantial changes in the terms and conditions prevalent at the time of issue of Letter of Award dated 12.03.1996. 

Considering huge financial stakes for the Government in terms of the statutory levies accruing from crude and natural gas production from these fields and with an overall objective of increasing domestic hydrocarbon production by expeditious development of these fields, the Government decided that the Fields may be reverted back to the original licensee, ONGC, who had initially developed these fields partially and operated and obtained production from these fields till 1994. 

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