Draft proposes 0.1% cess on energy firms

Cess to create national energy fund for R&D activities in the sector.

The government today unveiled a draft energy policy which proposed that a national energy fund be set up by levying a cess of 0.1 per cent on all petroleum, power and coal companies.

The fund will be used for research and development activities in the energy sector. This, the draft said, would require sustained and continued support over a long period of time.

The draft policy document, prepared by a committee of experts headed by Planning Commission Member Kirit Parikh, will now be presented to Prime Minister Manmohan Singh and put up for public debate.

The draft also proposed that in order to encourage the companies to do their own R&D, a rebate of up to 80 per cent of this cess might be given to firms for such in-house activities.

"The NEF can provide funding for applications, innovations and fundamental research in institutions, universities, organisations and for individuals," officials said.

Companies producing crude oil in the country are already paying a cess of Rs 1,800 a tonne. The money was to be utilised for developing the petroleum sector but was hardly used for the intended purpose.

Among other measures which have been contemplated to promote R&D are setting up of technology missions for developing commercial technologies and rolling out of new technologies.

These include coal technologies for efficiency improvement, i-situ gasification, carbon sequestration, developing solar technologies for thermal and photovoltaics, bio-fuels such as producing of bio-diesel and ethanol, bio-mass plantation and wood gasification, and community-based bio-gas plants.

POLICY MATTER
A cess of 0.1% on all petroleum, power and coal companies proposed

The draft proposes a rebate of up to 80% of this cess to firms for in-house R&D

Companies producing crude in the country are already paying a cess of Rs 1,800 a tonne