Government nod to National Health Policy, free pricing for coal bed methane & 2% dearness allowance

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NEW DELHI: In the first cabinet meeting after the BJP’s victory in state polls, the government approved a new National Health Policy, free pricing for coal bed methane and a 2% dearness allowance with effect from January for government employees and pensioners.

The National Health Policy aims to raise public spending on health besides revisiting public private partnerships in the health sector. “It has been approved,” said a government official aware of the development.

The draft National Health Policy was released in January last year for public comment and had mooted tax-based financing as the main source of funding for the healthcare costs of at least 70% of the population that’s poor and vulnerable and whose per capita monthly consumption expenditure is less than Rs 1,640 in rural areas and Rs 2,500 in urban areas at current prices.

The last policy was framed in 2002 and a new one had been long overdue.

CBM PRICING
The cabinet allowed companies to sell coal bed methane (CBM) gas at market prices in a move that will benefit producers such as Reliance Industries and Oil and Natural Gas Corp. (ONGC) and boost the output of this barely tapped source of energy in the country.

Contractors can sell CBM, the natural gas extracted from a coal mine, at arm’s length prices in the domestic market. “While discovering the market price for arm’s length sales, the contractor has to ensure a fully transparent and competitive process for sale of CBM with the objective that the best possible price is realized for the gas without any restrictive commercial practices,” a government statement said.

If it can’t identify a buyer, the contractor can also sell the gas to an affiliate. The companies will have to pay royalty and other dues to the government on the basis of official prices or the actual selling price, whichever is higher.

“The policy is expected to incentivize the CBM operation in the country to boost gas production and will generate economic activities which in turn will be beneficial for creating more employment opportunities in CBM operations and related activities,” the statement said.

Of the 33 CBM blocks awarded to companies at various times, four are currently producing a total volume of about 1.17 million standard cubic meters. Many blocks have been relinquished by companies. Free pricing can help tap domestic CBM resources estimated at about 92 trillion cubic feet.

Free CBM pricing is a part of several oil and gas reforms introduced in the past two and a half years by the government. It has already deregulated fuel sales, allowed higher prices for natural gas from difficult fields and introduced a new exploration policy that frees oil and gas pricing and simplifies the government-contractor relationship.

The government notifies prices for domestic natural gas every six months. The global commodity collapse in the past two years has also depressed local gas prices that are linked to international rates by a formula.

LUBRIZOL STAKE SALE
The cabinet has permitted Indian Oil Corp. to sell its 24% equity in Lubrizol India Pvt. Ltd to its joint venture partner Lubrizol Corporation, USA.

“The sale will enable Indian Oil Corp. to have long-term association with its joint venture partner and thus Lubrizol India Private Ltd to have access to the latest global additive technologies developed by Lubrizol Corporation, USA,” the government said.

DEARNESS ALLOWANCE
The union cabinet approved the release of an additional installment of dearness allowance for central government employees and dearness relief, raised by 2%, to pensioners with effect from January 1.

This increase is in accordance with the accepted formula, which is based on recommendations of the Seventh Central Pay Commission, the statement said. The move will benefit about 48.85 lakh employees and 55.51 lakh pensioners and cost the exchequer Rs. 5,857.28 crore per annum and Rs.6,833.50 crore in 2017-18 (14 months, from January 2017 to February 2018).

UP PLANS
The government approved the widening of the Handia-Varanasi section of the NH2 in Uttar Pradesh to six lanes.

The cabinet committee on economic affairs approved the project that will be based on a hybrid annuity model. The cost for the project is estimated to be Rs 2,147 crore, which included land acquisition, resettlement and rehabilitation and other pre-construction activities. The total length of the road will be approximately 73 km. The project will be under the National Highways Development Project (NHDP) Phase V.