India loses fiscal stability sheen

Vol 13, PW 15 (14 Jan 10) News in Brief

â€کFiscal stability’ in India can no longer be taken for granted by companies thinking of investing, according to a foreign explorer.

“Every company has a set of criteria to be met before investing in a country,â€‌ we hear. “One of them is â€کfiscal stability’.

In the early days when deciding about India the â€کbox’ for â€کfiscal stability’ would routinely get a tick, but not today.â€‌ Largely to blame for this growing negative perception is the unresolved question over mineral oil and whether it constitutes gas – a row that continues to rumble through the Indian legal system.

“Some people in the Indian finance ministry seem to think mineral oil isn’t a hydrocarbon,â€‌ we hear. “Don’t be surprised if one day they tell you oil isn’t actually oil!â€‌ Commercial managers, argues this operator, must take a call on which countries offer the most stable fiscal regime before investing scarce exploration dollars and India, it seems, is sliding to the wrong end of the preferred destination list.