India’s government and a clutch of state-owned companies already own 87 percent of ONGC. The only upside for ONGC investors is the price of crude. If that’s fixed, then there’s no reason to own its shares.
Following the transaction which is expected to be completed by November, Dassault Reliance Aerospace Ltd will become an associate company, with Reliance retaining a 49% stake.
From Munir’s point of view, a few bumps here and there is par for the course. He isn’t going to drive his dumper truck to its doom. He wants to use it as a weapon.
The government’s woes extend beyond taking ONGC private. Given public sentiment over high fuel prices and the imminence of the next general election – perhaps even in Nov / Dec – it must be with a very heavy heart that it is not affording them any relief by cutting excise duties. The state governments are being nudged to cut VAT but they are equally fiscally stretched, with farm loan waivers adding to the burden. 2. The tax structure for fuels got distorted when oil fell to $ 40 or even lower. The entire windfall was soaked up by central / state governments, who thought it would be permanent. They made no provision for a contingency where the gain might prove to be transient. 3. The windfall, ten trillion by some estimates, has masked economic slowdown with its attendant reduced tax buoyancy. We are now getting a clearer picture about how prudently public finances have been managed. There are also no shiny new capital projects to account for where this largesse has been spent.
Given that the bulk of at-pump petrol price in India is tax, why even the question?
The government’s woes extend beyond taking ONGC private. Given public sentiment over high fuel prices and the imminence of the next general election – perhaps even in Nov / Dec – it must be with a very heavy heart that it is not affording them any relief by cutting excise duties. The state governments are being nudged to cut VAT but they are equally fiscally stretched, with farm loan waivers adding to the burden. 2. The tax structure for fuels got distorted when oil fell to $ 40 or even lower. The entire windfall was soaked up by central / state governments, who thought it would be permanent. They made no provision for a contingency where the gain might prove to be transient. 3. The windfall, ten trillion by some estimates, has masked economic slowdown with its attendant reduced tax buoyancy. We are now getting a clearer picture about how prudently public finances have been managed. There are also no shiny new capital projects to account for where this largesse has been spent.