Straight from the Specialists
(Any opinions expressed here are those of the author and not of Reuters)
India’s oil and gas sector, often regarded as the country’s growth engine, has grown by leaps and bounds over the past decade, but the quest to reach the top of global league remains a challenge because of rising under-recoveries and lack of policy incentives.
The sector is a key revenue earner for the central and state governments. In 2011/12, it contributed 2,327.69 billion rupees to central and state governments in taxes, accounting for 20.6 percent of total indirect taxes.
At a time when the government earns a chunk of its revenue from the oil sector, the finance minister should consider including in Budget 2013 proposals to lower or exempt the sector from various taxes.
The recent announcement of a partial deregulation of diesel prices, with market-linked price for bulk users and graded increase in retail prices till price parity, is a welcome move. However, the need of the hour is complete deregulation of fuel prices and allowing market forces to set the benchmark in tandem with global oil prices.