Economic Reforms in Petroleum Sector

Baalu’s tenure as the Petroleum Minister of India during 1996-98 witnessed a totally new direction in this vital sector. The economic reform process and deregulation measures which had been initiated by the Central Government had started impacting the petroleum sector also in a significant way. The process of economic reforms had to be taken forward to give opportunities to the private entrepreneurs and to bring the much needed investment as well as efficiency and competition in the Indian petroleum industry. With the domestic production of crude oil and gas having reached a plateau level of around 30 million tones per annum meeting only a part of the total requirement of the country, the exploration sector needed a greater push and impetus. Therefore, the situation called for new policy initiatives and that gave rise to a New Exploration Licensing Policy (NELP).

NELP offered opportunities to the private sector for exploration of oil across the length and breadth of the country as well as deep off-shore and attractive fiscal incentives that were formulated after a careful thought process and extensive consultation with the stakeholders. NELP was tabled during Budget Session of 1997 by the Petroleum Minister and was consequently adopted by the Parliament.