Vedanta's Anil Agarwal calls for policies to reduce dependence on imports

Executive Chairman and Vedanta Group founder Anil Agarwal
Vedanta Chairman Anil Agarwal has written to Prime Minister Narendra Modi, batting for a better policy environment to raise investments and reduce India’s dependence on imports of natural resources. 

“We would like to see policies and legislation conducive to ensuring greater investment in the natural resources sector to make India self-sufficient and take away its dependency on imports,” he wrote in the letter dated September 12. 

During the first round of oil and gas auction under the Open Acreage Licensing Policy, Vedanta got the maximum number of 41 blocks. A contract in this regard is set to be signed with the government on October 1. India is planning to bring down its crude oil imports by 10 per cent by 2022.

In his letter, Agarwal has shared the company's tax transparency report. During the 2017-18 financial year, Vedanta contributed approximately Rs330 billion to the exchequer, which was 36 per cent of its turnover. The company claims to be the only one in India to come out with a tax transparency report, showing its contributions to the exchequer of the countries where it operates. 

Agarwal vowed investments of $8 billion in India by Vedanta group, including about $3-4 billion in oil and gas sector only in the next two years. 

The demand for a better policy is coming at a time when the company is fighting a legal battle with the government and Vedanta Cairn over extension of the production sharing contract (PSC) to produce oil from a Rajasthan block. 

Earlier this month, the Delhi High Court had granted two months to the petroleum ministry to decide on Vedanta's application on extension. In June, a single Bench had ruled in favour of Vedanta and ONGC, directing the Centre to extend the PSC till 2030. This was later put on hold by a division bench, which had given two months for the Centre to take a call. 

"The bulk of our contribution is in India as we stay committed to our operating businesses with a commitment to invest $8 billion in growth projects across our businesses, including $3-4 billion in our oil and gas business in the next couple of years," Agarwal has said in the letter. 

Compared to international diversified natural gas companies, Vedanta in India contributed the most to the exchequer, the letter claimed. Over the past five years, it has put up Rs1.6 trillion to the National Public Finances. 

Vedanta Resources, the group's parent company, globally contributed $5.4 billion at a consolidated level, whereas Rio Tinto pitched in with $5.1 billion, followed by BHP Billiton at $4.7 billion, and Glencore and Anglo American at $3.1 billion each, the letter highlighted. 

Vedanta is the largest private sector oil producer in India contributing to around 27 per cent to the domestic production, and has set a target to take this to 50 per cent soon. Another group company Hindustan Zinc, is the second-largest integrated zinc-lead producer in the world and the largest producer of aluminium in India. 

"Urbanisation and infrastructure development will continue to generate demand for natural resources, including commodities where our company is a leading producer. Such is the scale of the nation's needs that we believe that in times to come, everything that we produce in India will sell in India," Agarwal added. 

Agarwal in his letter cited that compared to countries with similar geology such as Brazil and Australia, where natural gas sector contributes 8-10 per cent of the GDP, in India the sector contributes only around 2 per cent.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel