NEW DELHI: India can produce crude oil at one-fourth of the import price if it liberalises its exploration and production policy, said Anil Agarwal, chairman of Vedanta, in a statement on Monday. He said if India wants to realise the dream of not just $5 trillion but a $15-20 trillion economy in the next 2 decades, a well-functioning mines and minerals sector will have a big role to play.
“India can produce oil at one-fourth of import price similar to Cairn providing oil at $26 to the government. India is a powerhouse of talent and on the path of making advances in the world of technology, research, and innovation… They can be encouraged to do exploration with the latest technologies like artificial intelligence, automation, and data analytics, by receiving funding from private equity and selling their licenses post-discovery,” said Agarwal. Agarwal who heads the metals and energy conglomerate has been making a case for higher private sector participation to optimally utilise the country’s natural resources.
He said the valuation of the government-listed firms can be increased by 10 times by privatising some companies and corporatising others because PSUs are endowed with not just good assets but strong human capital as well. He further added that while 20% of companies can be privatised, the rest, including defence factories, should be corporatised with the condition that there will be no job loss, and no one will be allowed to hold more than 5% share.
“This model has already been a success in the US and western world,” he added. “This is the time where all the mine leases should be for a minimum of 50 years so that Indian and foreign firms can plan and execute well. All existing mines, which were explored by the private sector but where work has been stopped, should be given back to them.”