Skip to main content

Fuel subsidy was underestimated in Interim budget: Moody’s

Global Rating Agency Moody’s said on Wednesday that Finance Minister P. Chidambaram has underestimated the fuel subsidy bill for the current year in his interim budget by about 40 per cent.

Moody’s estimates India’s total fuel subsidy burden at Rs. 1,42,000 crore for the fiscal year ending March 2014, it said in a statement issued in Singapore on Wednesday.
The revised estimate in the interim budget is Rs 85,480 crore. “The provision in the Government of India’s interim budget, announced on Monday, will not be sufficient to fully reimburse the under-recoveries of oil marketing companies (OMCs) including Indian Oil Corporation and Bharat Petroleum Corporation,” a Moody’s Vice President and Senior Analyst Vikas Halan has reported.
Excluding the upstream companies’ share of fuel subsidies for the full fiscal year, which Moody’s estimates at about Rs 64,000 crore, the Government will need to reimburse the OMCs Rs 78,000 crore in order to fully compensate them for the under recoveries, the statement said. These State-owned companies are compensated as the administered prices of fuels are pegged below market prices to subsidise consumers.
The interim budget provided Rs 45,000 crore as reimbursements paid out to OMCs for the previous fiscal year’s under recoveries. “Nonetheless, we expect the government to cover the reimbursement shortfall by drawing upon next year’s budget and fully reimburse OMCs for fuel subsidies for the fiscal year ending March 2014,” said Mr. Halan.
Though such adjustments have been made by the government in the past, the situation is “more complicated” this year as the elections in May could result in a change in polices by the next government.
For the nine months ended December 2013, OMCs reported gross under recoveries of Rs 100600 crore. Of this Moody’s estimates, the deficit or net under-recoveries is Rs 16800 crore.
“While we do not expect the government to under-compensate the OMCs, the credit metrics of OMCs will weaken should such a scenario materialize as their profits will decline and borrowings will increase,” said Mr. Halan.
Labels:

Comments

Post a Comment

Popular posts from this blog

NGT terminates chairmen of pollution control boards in 10 states (downtoearth,)

Cracking the whip on 10 State Pollution Control Boards (SPCBs) for ad-hoc appointments, the National Green Tribunal has ordered the termination of Chairpersons of these regulatory authorities. The concerned states are Himachal Pradesh, Sikkim, Tamil Nadu, Uttarakhand, Kerala, Rajasthan, Telangana, Haryana, Maharashtra and Manipur. The order was given last week by the principal bench of the NGT, chaired by Justice Swatanter Kumar. The recent order of June 8, 2017, comes as a follow-up to an NGT judgment given in August 2016. In that judgment, the NGT had issued directions on appointments of Chairmen and Member Secretaries of the SPCBs, emphasising on crucial roles they have in pollution control and abatement. It then specified required qualifications as well as tenure of the authorities. States were required to act on the orders within three months and frame Rules for appointment [See Box: Highlights of the NGT judgment of 2016 on criteria for SPCB chairperson appointment]. Having ...
Post a Comment
Click Here To Read more »

High dose of Vitamin C and B3 can kill colon cancer cells: study (downtoearth)

In a first, a team of researchers has found that high doses of Vitamin C and niacin or Vitamin B3 can kill cancer stem cells. A study published in Cell Biology International showed the opposing effects of low and high dose of vitamin C and vitamin B3 on colon cancer stem cells. Led by Bipasha Bose and Sudheer Shenoy, the team found that while low doses (5-25 micromolar) of Vitamin C and B3 proliferate colon cancer stem cells, high doses (100 to 1,000 micromolar) killed cancer stem cells. Such high doses of vitamins can only be achieved through intravenous injections in colon cancer patients. The third leading cause of cancer deaths worldwide, colon cancer can be prevented by an intake of dietary fibre and lifestyle changes. While the next step of the researchers is to delineate the mechanisms involved in such opposing effects, they also hope to establish a therapeutic dose of Vitamin C and B3 for colon cancer stem cell therapy. “If the therapeutic dose gets validated under in vivo...
1 comment
Click Here To Read more »

What's ailing Namami Gange programme?(DTE)

Winters are extremely hectic for Sushma Patel, a vegetable grower in Uttar Pradesh’s Chunar town. Her farm is in the fertile plains of Ganga where people grow three crops a year. But this is the only season when she can grow vegetables. And before that, she needs to manually dig out shreds of plastic and wrappers from her one-hectare (ha) farm. “This is all because of the nullah,” she says, pointing at an open drain that runs through her field, carrying sewage from the neighbourhood to the Ganga. “Every monsoon, the drain overflows and inundates the field with a thick, black sludge and plastic debris. We cannot even go near the field as the stench of sewage fills the air,” she says. But Patel has no one to complain to as this is the way of life for most people in this ancient town. About 70 per cent of the people in Chunar depend on toilets that have on-site sanitation, such as septic tanks and pits. In the absence of a proper disposal or management system, people simply dump the faec...
2 comments
Click Here To Read more »