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India to offer budget breaks to fuel oil sector's growth

Indian Finance Minister Yashwant Sinha said on Thursday that a package of budgetary measures would be announced next month to boost growth in the oil industry to meet rising domestic demand.

He said the sector would need investments of $100 billion over the next 25 years and added he was thinking of setting up a financial institution to take care of the oil sector's specialised funding needs.

Petroleum Minister Ram Naik asked the finance minister to "give appropriate fiscal concessions" to boost investments in natural gas projects, refineries, pipelines and exploration of oil fields.

Sinha said the budget would outline medium term policy measures to help the sector.

India, which imports nearly 70 per cent of its oil needs, is expected to spend Rs 540 billion in oil imports in the year to March 2001.

The finance minister said government equity in all state-owned oil firms -- except Indian Oil, Oil and Natural Gas Corp. and Gas Authority of India -- would be cut to below 26 per cent.

Sinha said India's per capita energy consumption, which is among the lowest in the world, was bound to go up as both agriculture and industrial output was rising steadily.

With a population of more than one billion, India's per capita petroleum consumption is just 113 kilograms annually, compared to the world average of 927 kilograms.

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