There has been no resolution so far to the issue of assured fuel supply from Coal India Limited (CIL) to power producers. According to reports, while CIL released a model supply agreement in April 2012, so far only around 13 Fuel Supply Agreements (FSAs) have been signed. Originally around 50 power units were expected to sign FSAs with CIL. Power producers have objected to the model FSA released by CIL, particularly its force majeure provisions and the dilution of financial penalties in case of lower than contracted supply. Background The adverse power supply situation has attracted greater attention in the past few months. According to Central Electricity Authority's data, the gap between peak demand and peak supply of power in March 2012 was 11 per cent. The decreasing availability of fuel has emerged as a critical component of the worsening power supply situation. As of March 31, 2012, there were 32 critical thermal power stations that had a coal stock of less than 7 days. The gap between demand and supply of coal in the past three years is highlighted below: Table 1: Coal demand/Supply gap (In millions of tonnes)
2009-10 |
2010-11 |
2011-12 |
|
Demand |
604 |
656 |
696 |
Supply |
514 |
523 |
535 |
Gap |
90 |
133 |
161 |
Source: PIB News Release dated May 7, 2012 Coal accounts for around 56 per cent of total installed power generation capacity in India. Increased capacity in thermal power has also accounted for almost 81 per cent of the additional 62,374 MW added during the 11th Plan period. Given the importance of coal in meeting national energy needs, the inability of CIL to meet its supply targets has become a major issue. While the production target for CIL was 486 MT for 2011-12, its actual coal production was 436 MT. Fuel Supply Agreements In March 2012, the government asked CIL to sign FSAs with power plants that have been or would be commissioned by March 31, 2015. These power plants should also have entered into long term Power Purchase Agreements with distribution companies. After CIL did not sign FSAs by the deadline of March 31, 2012 the government issued a Presidential Directive to CIL on April 4, 2012 directing it to sign the FSAs. The CIL board approved a model FSA in April 2012, which has not found acceptance by power producers. According to newspaper reports, many power producers have expressed their dissatisfaction with the model FSA released by CIL. They have argued that it differs from the 2009 version of FSAs in some major ways. These include:
Most power producers, including NTPC, the country’s biggest power producer, have refused to sign the new FSA. Reports suggest that the Power Minister has asked the Prime Minister’s Office to mandate CIL to sign FSAs within a month based on the 2009 format. CIL has received a request from NTPC to consider signing FSAs based on the same parameters as their existing plants, but with the revised trigger point of 80 per cent (down from 90 per cent earlier). Underlying this situation is CIL’s own stagnating production. Various experts have pointed to the prohibition on private sector participation in coal mining (apart from captive projects) and the backlog in granting environment and forest clearances as having exacerbated the coal supply situation.
As of May 22, 2020, there are 1,18,447 confirmed cases of COVID-19 in India, which is 76% higher than the cases on May 11, 2020 (67,152). Out of total confirmed cases, there are 66,330 active cases, 48,354 patients have been cured/discharged and 3,583 have died (Figure 1). As the spread of COVID-19 has increased across India, the central government has continued to announce several policy decisions to contain the spread, and support citizens and businesses who are being affected by the pandemic. In this blog post, we summarise some of the key measures taken by the central government in this regard between May 11 and May 22, 2020.
Figure 1: Number of day wise COVID 19 cases as on May 22, 2020
Aatma Nirbhar Bharat Abhiyaan
On May 12, the Prime Minister, Mr. Narendra Modi, announced a special economic package of Rs 20 lakh crore (equivalent to 10% of India’s GDP) aimed towards making the country ready for the tough competition in the global supply chain and empowering the poor, labourers, migrants who have been adversely affected by COVID-19. Following this announcement, the Finance Minister, Ms. Nirmala Sitharaman, in five press conferences, announced the detailed measures under the economic package. The economic package includes earlier measures taken by the government to support the citizens and businesses of India. A break-up of the package is presented in Table 1.
Table 1: Break-up of stimulus from Aatma Nirbhar Bharat Abhiyaan package
Item |
Key Topics covered |
Amount (in Rs crore) |
Stimulus from earlier measures |
Pradhan Mantri Garib Kalyan Yojana, Tax Concessions, and the Prime Minister's announcement for health sector |
1,92,800 |
Part 1 |
Business including Micro, Small and Medium Enterprises (MSMEs) |
5,94,550 |
Part 2 |
Poor people including migrants and farmers. |
3,10,000 |
Part 3 |
Agriculture and allied sectors. |
1,50,000 |
Part 4 and Part 5 |
Part 4: Coal and mineral sectors, defence sector, civil Aviation, airports and aircraft Maintenance, Repair and Overhaul (MRO), power sector, social infrastructures, space, atomic energy. Part 5: Government reforms and other provisions including public health and education, additional allocation to MGNREGS |
48,100 |
Sub Total |
|
1,295,400 |
RBI Measures (Actual) |
Reduction in Cash Reserve Ratio (CRR), Special Liquidity Facility (SLF) for mutual funds, Special refinance facilities for NABARD, SIDBI and NHB at policy repo rate |
8,01,603 |
Grand Total |
|
20,97,053 |
Note: Part 1, 2, 3, 4, 5 in the table above represents the five press conferences conducted by the Finance Minister to announce the details of the economic package.
Source: Presentation made by Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman under Aatmanirbhar Bharat Abhiyaan to support Indian economy in fight against COVID-19, Ministry of Finance, May 13, 2020, PRS.
For more information on the details of the announcements made under Aatma Nirbhar Bharat Abhiyaan, please see here.
Finance
Following the Prime Minister’s and Finance Minister’s announcements, further announcements were also made.
Lockdown 4.0
The Ministry of Home Affairs (MHA) passed an order extending the lockdown till May 31, 2020. This lockdown will have more relaxations compared to earlier lockdowns.
Zoning of areas
The new guidelines have authorised states/union territories (UTs) to define the red, green and orange zones based on the parameters prescribed by the Health Ministry. The states/UTs can define a district, or a municipal corporation/ municipality or even smaller administrative units such as sub-divisions, etc. as a red or green or orange zone.
The prohibition of certain activities or restrictions in various zones within a state will be at the discretion of the state/union territory as deemed necessary.
Prohibited Activities
Some activities will continue to remain prohibited throughout the country. These include:
Online/ distance learning is encouraged and permitted; and, restaurants will be allowed to operate kitchens for home delivery of food items.
National Directives for COVID Management
The Ministry of Home Affairs issued the National Directives for COVID Management, which apply to public places and work places. As per these guidelines:
Guidelines for workplaces include:
Aarogya Setu
The District authorities will ensure installation of the Aarogya Setu application on compatible mobile phones of all individuals and will have to regularly update their health status on the app.
Aarogya Setu Data access and knowledge sharing protocol, 2020
The Ministry of Electronics and Information Technology, Government of India issued a notification on the data access and knowledge sharing protocol, 2020 in reference to the Aarogya Setu mobile application. The protocol will: (i) ensure secure collection of data by the mobile application, (ii) protect the personal data of individuals, and (iii) ensure efficient use and sharing of personal or non-personal data of the application users. The protocol provides principles for: (i) collection and processing of response data, (ii) sharing of response data, (iii) obligations of entities with whom the data will be shared, and (iv) sharing of data for research purpose. A sunset clause is applicable to the protocol subjecting it to a review after 6 months unless there is any extension of sunset clause in wake of the pandemic.
Travel and Movement
Health
The Ministry of Health and Family Welfare issued: (i) updated containment plan on COVID-19, and (ii) updated containment plan for large outbreaks of COVID 19. These plans provide information on various scenarios of COVID-19 and strategies to control the spread of the disease including definitions, action plans and specific details on (i) identification of containment zones and buffer zones; (ii) perimeter control; (iii) support from various stakeholders such as testing laboratories and hospitals; (iv) pharamaceutical and non-pharmaceutical interventions; and (v) risk communication.
For more information on the spread of COVID-19 and the central and state government response to the pandemic, please see here.