Pre-budget oil & gas memorandum: Time for lateral thinking
Nov 14: Nothing exemplifies the problems facing the Indian oil and gas industry better than a pre-budget memorandum. 8A recent such petition submits a long list of suggestions in the direct and indirect taxation regime that will enable all segments of the industry to push ahead. 8Many of these suggestions are real barriers to growth and they figure in repeated pre-budget memorandums. 8Quite a few of the recommendations seek clarifications in tax laws while others require financial sacrifice from the central exchequer. 8Some involve future loss of tax revenue for the government but a big step up in investment is projected if concessions are extended. Clearly, there is a quid-pro-quo involved: A potential loss of revenue against a possible increase in investment. 8To be able to settle some of the outstanding demands, the government can call a meeting where finance and petroleum ministry officials are present and industry representatives are invited so that there is appreciation on both sides of the issues at hand. 8A study can perhaps be done of how tax codes of other countries closer home, such as China, Indonesia or Vietnam are structured and whether lessons can be drawn from their success. 8Under a new government that is capable of thinking laterally, the pre-budget memorandum can become a tool to bring about sustentative change. 8It should not become another petition that is lost in the heap of memorandums that is routinely submitted to North Block every November. Click on Reports for a full copy of the pre-budget memorandum.