Business Current Affairs - 2019
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Union Government has constituted six-member committee to look at selling as many as 149 small and marginal oil and gas fields of state-owned Oil and Natural Gas Corp (ONGC) and Oil India Ltd (OIL) to private and foreign companies to boost domestic output.
The committee will be headed by NITI Aayog Vice Chairman Rajiv Kumar and includes Cabinet Secretary P K Sinha, Oil Secretary M M Kutty, Economic Affairs Secretary Subhash Chandra Garg, NITI Aayog CEO Amitabh Kant and ONGC Chairman and Managing Director Shashi Shanker as members.
Constitution of this committee is follow up of October 2018meeting called by Prime Minister Narendra Modi to review domestic production profile of oil and gas and the roadmap for cutting import dependence by 10% by 2022. In this meeting, Union Oil Ministry had made presentation showing that 149 smaller fields of ONGC, OIL and other explorers accounted for just 5% of domestic crude oil production. It was suggested at the meeting that these smaller fields could be given out to private and foreign firms, so that ONGC could concentrate on big ones where it could rope in technology partners through production enhancement contracts (PEC) or technical service arrangements. This was mainly large ONGC fields as contribute to 95% of its production and leave out the rest for private firms.
According to index of eight core industries released by Ministry of Commerce and Industry, growth rate of eight infrastructure sectors slowed down to 4.8 per cent in October 2018. This was mainly due to contraction in production of crude oil, natural gas and fertilizer. It had recorded growth rate of 5% in October 2017. During April-October 2018-19, eight sectors recorded a growth rate of 5.4% against 3.5 per cent in the same period last year.
In October 2018, fertiliser production dropped sharply by 11.5%, crude oil by 5% and natural gas by 0.9% over the year-ago month. The production of coal, cement and electricity, on other hand, expanded in month under review. The growth rate of refinery products declined to 1.3% in October as against 7.5% in the same month last year. Similarly, steel sector growth too dipped to 2.2% against 8.6% in October 2017. The growth rate of eight core sectors, however, is more than 4.3 per cent expansion in September 2018.
Index of Eight Core Industries (ICI)
It is monthly production volume index considered as lead indicator of monthly industrial performance. It is calculated by using Laspeyre’s formula of weighted arithmetic mean of quantity relatives. It measures collective and individual performance of production in selected eight core industries viz. Natural Gas, Coal, Crude Oil, Fertilizers, Petroleum Refinery Products, Steel, Cement and Electricity.
It is compiled and released by Office of Economic Adviser (OEA), Department of Industrial Policy & Promotion (DIPP), Ministry of Commerce & Industry. The eight infrastructure sectors, constitute 40.27% of total index of industrial production (IIP). These eight core industries have impact on general economic activities as well as industrial activities. (Base year for ICI is 2011-12).
Components and weightages covered in ICI
- Petroleum Refinery production (weight: 28.04%): It includes total refinery production (in terms of crude throughput).
- Electricity generation (19.85%): It includes actual electricity generation of thermal, nuclear, hydro, imports from Bhutan.
- Steel production (17.92%): It includes production of alloy and non-alloy steel only.
- Coal production (10.33%): It includes coal production excluding coking coal.
- Crude Oil production (8.98%): It includes total crude oil production.
- Natural Gas production (6.88%): It includes total natural gas production.
- Cement production (5.37%): It includes production of large plants and mini lants.
- Fertilizers production (2.63%): It includes production of Urea, Calcium Ammonium Nitrate (CAN), Ammonium Sulphate (A/S), Diammonium Phosphate (DAP), Ammonium chloride (A/C), Complex Grade Fertilizer and Single superphosphate (SSP).