The creation of India’s biggest gas distribution company in Gujarat, a provision for setting up a new Liquefied Natural Gas (LNG) terminal at Mundra and Rs 100 crore as sops to help one lakh new Micro Small and Medium Enterprises (MSME) units set up base in the state have been proposed in the modified state budget (2014-15) presented in the state Legislative Assembly on Tuesday.
“Gujarat Gas Company and GSPC Gas shall be merged this year. As a result, the company shall emerge as the biggest gas distribution company in the entire country,” said Saurabh Patel, state Finance Minister while presenting the budget. While GSPC Gas is a group company of the Gujarat government-owned Gujarat State Petroleum Corporation (GSPC), Gujarat Gas Company (GGC) was acquired from BG Group (73.7% stake) by the GSPC Group in June 2013. This merger will create an entity with a total of 10 lakh customers.
“We are planning to go public this year,” said Patel, talking on the sidelines of his budget presentation about the GSPC’s future plans to hit the capital markets. “I cannot say if this will happen before or after the merger (of GSPC and Gujarat Gas),” he added.
“GSPC has successfully accomplished the task of extracting gas at the depth of 15,000 feet from the sea bed in the KG basin and bringing gas to the shores in very challenging circumstances. It is indeed a matter of pride for the state. I am glad to inform this House that commercial production of gas is expected to start shortly,” Patel said during his budget speech.
“With GSPC Gas Company getting the long-time pending approval to provide gas connections to more and more areas in the state, the task of providing 50,000 gas connections in Jamnagar, Bhavnagar as well as East and West Kutch shall commence,” Patel added.
The budget also makes a provision of Rs 150 crore for developing a new LNG terminal at Mundra in Kutch district. GSPC LNG Ltd, a joint venture between GSPC and Adani Group, is setting up this Rs 3,500-crore terminal which will be the third LNG terminal in Gujarat.
The new leadership in Gujarat also announced a scheme to provide incentive to small industries with a provision of Rs 100 crore. “Till date, 4.5 lakh micro, small and medium sized units have been registered in the state. Incentive shall be given to set up one lakh new units in next three years,” he added.
The state government will give financial assistance to both Gujarat Industrial Development Corporation (GIDC) and private developers for setting up industrial estates and infrastructural facilities for the MSME sector that is struggling to meet the increased land and building costs. GIDC will be building multi-storey buildings in existing estates for MSME units. Special GIDC estates having an area of less than 50 hectares will be created and the state government will bear 50 per cent of the costs for MSME units planning to set up a shed or a plot in GIDC estates. “If a private developer constructs sheds similar to row houses of approximately 500 square feet within the limit of one or two hectares for MSMEs, assistance of 50 per cent of capital cost shall be provided to such developer,” the minister said.