Narendra Modi’s landslide victory in Gujarat elections has changed his power equations with the Centre. After getting the Prime Minister to approve last month an increase in royalty earned from oil output, he may get the Vajpayee Cabinet to review a proposal that was rejected last year.Sources said the Cabinet Committee on Economic Affairs (CCEA) is likely to reconsider tomorrow a proposal to share with states profits that the Centre earns from their oil and gas fields. If approved, the Centre will give the states 50 per cent of its profits after the project promoters have recovered their costs on exploration and production.The proposal had first come up for CCEA approval on July 29 but was turned down because the Finance Ministry did not agree. The ministry felt the Gujarat demand had a wider ramification in the context of sharing central revenues with states and suggested the issue be referred to the XII Finance Commission. However, when Modi met Vajpayee on January 10 after winning the polls, he complained that a reference to the commission would inordinately delay the proposal. He extracted a promise from the PM that a viable solution would be found without involving the commission.On instructions from the PMO, sources said, the Petroleum Ministry has exhumed and resubmitted the proposal on grounds that the issue had been reviewed by the ministry. What is surprising is the haste in approving the proposal since the first profit-petroleum, as the ministry itself admits, would start flowing into the national coffers nine years later from 2012 — a lengthy time period for the commission to have come up with a profit-sharing formula.
