After a tug of war between the patriots and unpatriotics for decades a legal frame work was evolved to sell off our precious natural resources. It was in early nineties. TAX regime is as per the PTC prepared by the notorious (Satyam fame) Price Waterhouse. Salient features of NELP are as follows. 1. Govt uphold the liberalized economic policy. (A deviation from Nehruvian ideas) 2. No preference to PSUs in the open bidding. 3. ONGC and OIL has to compete with private companies in the bidding. 4. Acreages will be demarcated on grid basis which give continuous benefit to the companies. 5. Freedom to market products within India. (Create an atmosphere for weaker states to beg for products) 6. 50% of royalty will be credited to a fund meant for further oil exploration. (This limits the discretion of state to use funds received from natural resources.) 7. Royalty will be 50% for the first seven years for offshore deep water drilling. 8. Existing cess levied is abolished for NELP projects. 9. Exemption from import duty for equipments imported for the projects. 10. A seven year tax holiday. 11. Contractor will be provided with fiscal stability 12 A new Petroleum Tax Guide will be in operation. 13. Contractor will be allowed full cost recovery without time limit. !4. ONGC/OIL to pay international price for the products. 15. Pretax sharing of profits. 16. States need not be consulted. 17. An empowered committee is formed to amend acts and rules in line with the NELP. Revoke the NELP.
