My disappointment was compounded by the fact that the FM did touch on all of the critical issues. But he did not take the next step and place his allusions and comments within an integrated energy framework. Nor did he offer any incentives. On the contrary, as the subsequent reading of the finance bill suggests, the budget speech may have been no more than sound rhetoric.

Take, for instance, the comment on exploration. The budget speech alluded to the importance of intensifying oil and gas exploration. It pointedly pronounced on the billions of incremental dollars that the government expected to flow into fresh exploration under the new exploration licensing round (NELP VII). The finance bill (2008) has however purportedly (I say purportedly because I am still not clear as to its intent) removed the seven-year tax holiday on the profits to be earned from the production of natural gas. Given that the notice inviting offers (NIOs) for exploration under NELP specifically mentions this tax holiday; given that it is not possible to ascertain ahead of physical drilling whether the discovered hydrocarbons will be oil, gas or oil associated with gas and given that the bulk of recent discoveries have all been gas, this inherent contradiction between the pronouncement in Parliament and the subsequent fine print is intriguing, to say the least.

Take, also, the disjunct between the commendable reference to climate change and the need for India to address this challenge irrespective of the outcome of multilateral and international discussions and the absence of any specific incentives to accelerate the development of cleaner fuels or to encourage R&D on cleaner technologies. The FM said gas was the most ‘benign’ of fossil fuels. But he did not go the logical next step and grant the gas industry the same concessions that infrastructure related industries currently receive.

... contd.