LPG Reforms Current Affairs - 2020

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National Policy to speed up Gas Infrastructure

A “high-level committee” has been set up by the Petroleum and Natural Gas Regulatory board (PNGRB) to frame national policy on city gas distribution. The intention of the policy is to speed up development of infrastructure of piped natural gas.

Highlights

The committee formed will perform a detailed review of the issues in the development of piped gas network. The policy will also address issues like delay in getting approvals at state level. It will also identify Geographical Areas that are facing difficulties in witnessing significant progress as compared to the other regions.

The policy will include appointment of a nodal officer by the state governments to grant clearances that includes land, environment, transport, etc in a time-bound manner. It will also include procedure for timely allocation of government at concessional rates for creating City Gas Distribution  infrastructure.

Progress so far

The number of Geographical Areas with good City Gas Distribution has increased from 78 in the end of 2017 to 229 in 2019 according to the Ministry of Petroleum.

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India finds OECD’s STR Index faulty

India has found problems with the current methodology adopted by the Organisation for Economic Cooperation and Development (OECD) under its Services Trade Restrictiveness Index (STRI) to rank countries.

Key Highlights

  • About: A study commissioned by Indian Ministry of Commerce found that OECD index, the STRI has a several problems associated with it, which also includes some significant design issues that render the index impractical for use.
  • Issues: As per India the outcomes of STRI are biased and counter-intuitive.
  • The initial work suggests that there are both empirical and theoretical inconsistencies in STRI’s methodology.
  • The data generated by OECD’s methodology seems to have been through arbitrary procedures and reflects being bias towards developed country.
  • It shows Indian services sector as highly restrictive in areas such as FDI.
  • Impractical: For instance, STRI seems to show the services sector in India as one of the most restrictive in world, particularly in policy areas like foreign entry, FDI etc. This is astonishing as since 1991, following the LPG reforms the one area that has seen maximum liberalisation in India is Foreign Direct Investment (FDI).
  • India’s Approach: India is trying to build a consensus around adopting a new method of measuring trade restrictiveness in services sector. For this India approached several developing countries during recently-concluded WTO Ministerial talks held in New Delhi. It has also approached South Africa, Indonesia, China, Turkey and Brazil.
  • India’s Argument: Unlike manufacturing trade which has a well-documented system of classification of commodities, the problem in services, is that for a long time there was not any way to find that whether a country’s service trade policies were restrictive.
  • Also, even if it was ascertain as restrictive it was not known that what to do about it since services trade is usually regulated by domestic regulations and not border tariffs.

About STRI

  • It was launched in 2014, by The Organisation for Economic Cooperation and Development (OECD).
  • It purpose is to rank countries based on their services trade policies.
  • STRI (computed by OECD) is now available for year 2018. It includes a total of 45 economies (with 36 OECD and the rest non-OECD) and 22 sectors. These countries and sectors undertaken represent more than 80% of global trade in services.

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