Government Policies Current Affairs

Government announces new licensing policy to boost oil output

The Union Ministry of Petroleum & Natural Gas has announced new Open Acreage Licensing Policy (OALP) for oil and gas exploration.

The new policy will allow bidders to carve out areas where they want to drill. It will help energy hungry India and world’s third-largest oil consumer to attract greater foreign investment to boost output.

Key Facts
  • The objective of OLAP is to increase India’s indigenous oil and gas production by maximising the potential of already discovered hydrocarbon resources in the country.
  • OALP offers single license to explore conventional and unconventional oil and gas resources to propel investment in and provide operational flexibility to the investors.
  • It provides operational flexibility to the investors. It is departure from the current licensing policy of government identifying the oil and gas blocks and then putting them on auction.
  • Under it, Government will conduct auction of oil and gas blocks twice a year, with the first round being held in July 2017.
  • The selection of oil blocks will be based on seismic and well data provided by Directorate-General of Hydrocarbons in National Data Repository which offers total of 160TB data of India’s 26 sedimentary basins
  • The OALP auction will be held under the overhauled exploration licensing policy, allowing pricing and marketing freedom to operators and shifts to a revenue sharing model.
Comment

OALP is part of the strategy to make India a business and investor friendly destination and cut import dependence by 10% and achieve the plan to double  existing oil production from current 80 million metric tons to about 150-155 million metric tons by 2022. In this new model, government will not micromanage, micro monitor with producers rather only share revenue. Thus, it gives an option to a company looking for exploring hydrocarbons to select the exploration areas on its own. The July 2017 auction under this new policy will be India’s first major exploration licensing round since 2010.

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Government frames National Transit Oriented Development Policy

The Union Urban Development Ministry has formulated ‘National Transit Oriented Development (TOD) Policy’ to address the challenges of urbanisation.

The policy framework aims to promote living close to mass urban transit corridors like the Metros, monorail and bus rapid transit (BRT) corridors.

Key Facts
  • Under the new Metro policy, TOD has been made mandatory and also an essential reform under the green urban mobility scheme and given priority for receiving central assistance.
  • The Union Government already has notified the TOD policy in early 2015, however, there was no clarity on the process for management of open spaces, various sanctions, parking space, water requirement, etc.
  • Under it, States/UTs are required to incorporate TOD in their master plans and development plans of cities besides identifying ‘influence zones’ from transit corridors for tapping revenue streams.
  • The central TOD policy will help the states to develop an in-depth understanding of the symptoms and causes of the challenges currently faced by Indian cities.
  • Besides, urban design and planning in the form of TOD, is being incentivised by the ministry under two more initiatives viz., Metro policy and green urban mobility scheme.
  • Development or redevelopment in TOD zone will be incentivised by providing significantly higher floor area ratio (FAR). It will enable vertical construction that is required to address shortage of land availability.
  • It also promotes integration of land use planning with transportation and infrastructure development to avoid long distance travel in cities through compact development.
  • The policy will be financed by channelising a part of increases in property values resulting from investments in transit corridors through betterment levies and value capture financing tools.
  • Increased private sector participation will result in economic development and employment generation.
Background

TOD at present is being taken up Ahmedabad, Karkardooma in Delhi, Nagpur, Naya Raipur and Navi Mumbai. It is significant in the context that over 300 km of Metro lines being operational in seven cities. Another 600 kms of metro line projects are under construction in 12 cities and over 500 km projects under consideration. The Union Government also has supported bus rapid transit system (BRTS) projects in 12 cities which are under different stages of progress. Eight more cities are set to take up BRT projects. Mass rail transit system of 380 km length is also being taken up in Delhi.

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