The Ministry of Steel is finalising a draft National Steel Policy 2012 to facilitate rapid growth of the domestic Steel sector by ensuring faster capacity addition. The ministries' efforts towards the policy has come in the wake of huge delays in the multi-billion dollar steel ventures planned by ArcelorMittal, POSCO because of regulatory and land acquisition hurdles. The ministry has constituted a panel headed by Steel Secretary for drafting the policy. The draft policy which is currently being finalised has projected India's steelmaking capacity in the range of 244-281 million tonne by financial year 2025-26. It is expected to replace the National Steel Policy, 2005, that had pegged country's steel production capacity at 110 million tonne only by 2020. Owing to the changing dynamics of the industry, the projections made then have become outdated.

The draft policy has also pegged the country's steel demand at 202 million tonne (at seven per cent GDP growth) and at 233 million tonne (at eight per cent GDP growth) by 2025-26. The new policy will help increase capital inflow, overcome hurdles regarding land acquisition, assuage concerns about raw material security, and spur efficient utilisation of raw material resources and infrastructure development for the sector among others. The draft policy is likely to be released in 2013. Further, the Ministry of Petroleum and Natural Gas sector may notify a policy that may not permit companies to deduct as expenses, exploration costs in areas where discoveries are under development. The policy will make it mandatory for the companies to treat each discovery in an oil block separately for the purpose. This will be applicable once the companies seek separate approval from the oversight committee for each block to avail of the new dispensation that will allow exploration to be carried out development and production costs in a block when it comes to calculating government share in oil and gas produced from a block In the Power sector, a lot of new norms are slated to come up including the norms for encouraging private sector participation in rural electrification, cap on coal linkages to power units below 200 MW capacity etc.

The Forum of Regulators (FoR) is likely to issue rules for development of OGRE projects with capacity up to 300 MW. ABPS Infrastructure Advisory, whose report on the development and operation of ORES projects has been accepted by FoR, notes the rural system operator would develop projects within the period specified in power purchase agreements with the distribution company concerned. There could also be a mutually agreed timeline. Rural system operators would develop distribution infrastructure and generate bills for electricity. The pricing would be based on meter readings at tariff rates not exceeding rates applicable for other consumers of the distribution company concerned. It is envisaged that the rural system operator would raise an invoice for electricity generated within seven days of the end of month for generation during the month and would be entitled to receive payment from distribution company within seven working days after submission of the invoice

As per the latest norms, the Ministry of Power will not provide coal linkages to power units below 200 MW capacity from CIL subsidiaries and Singareni Coalfields. However, this is not applicable to units that use a mix of coal and biomass as fuel. This condition is applicable to units of the Central Government undertakings, state government generation companies as well as private power companies. If the primary fuel of a unit is biomass, then 15 per cent coal linkage will be provided for such units having capacity of 10 MW and above. For units generating power on coal washery rejects, with a ratio of coal to reject of 22 to 78, linkage will be provided to units of 50 MW and above. A cogeneration based unit should have capacity of 10 MW and above for getting a coal linkage.

On the state level, the Uttar Pradesh Cabinet has approved the New Industrial & Infrastructure Policy 2012. The new policy will address regional imbalances and attract fresh investment in different sectors. It is aimed at ameliorating the ills of traditional industries and energising the large micro, small and medium enterprises (MSME) base in the state estimated at over three million. Also, the state government is likely to draft a new Sugar Investment Policy which aims at providing incentives for investments in the eastern part of the state, in sugar, ethanol and bagassebased power. New investment in the eastern region with distillery and co-generation facilities will be eligible for various fiscal incentives under this policy.

simultaneously with production and development. The companies will, however, continue to be bound by the production sharing contracts (PSCs) signed originally with the government. The draft policy also proposes that in cases where production from different ring-fenced reservoirs happens through a single well, the contractor will be required to put a mechanism in place for separation in costs. Now, the policy will be circulated among other ministries for their comments before it is put up for the approval of Cabinet Committee on Economic Affairs (CCEA). Currently, no distinction is made among exploration,