Close on the heels of Reliance Industries' gas find, Finance and Company Affairs Minister Jaswant Singh has questioned the regulatory practices in the hydrocarbon sector.

In a letter to Prime Minister Atal Bihari Vajpayee, the finance minister has suggested setting up a task force to look at how the government should proceed while exploiting indigenous and other gas reserves.

Taking cognisance of Singh's concerns, the Prime Minister has directed the ministry of petroleum and natural gas, the Cabinet Secretariat and the department of industrial policy and promotion to explain the prevailing policies and initiatives taken by the government to streamline regulation in the sector.

According to senior government officials, presentations by the petroleum ministry, the department of industrial policy and promotion and the Cabinet Secretariat have been scheduled on January 29 at the Prime Minister's residence.

Besides other issues, India's strategy to tackle various future hydrocarbon security scenarios will also be discussed.

The petroleum ministry has been asked by the PMO to explain the prevailing policies for discovery and exploitation of domestic hydrocarbon resources and also the policy for acquiring hydrocarbon assets abroad.

The ministry will also set out the financial and other constraints impeding progress in the sector and the likely medium-to-long term hydrocarbon demand-supply position for India.

The Cabinet Secretariat and the department of industrial policy and promotion will address issue relating to the proposed reforms and the re-engineering of regulatory processes to address impediments in the way of public and private investment.

Government sources said the finance minister had called for an institutionalised arrangement that would suggest ways to streamline the systems and regulatory regimes.

The task force, as recommended by Singh, could also address issues like red-tape and other barriers to reforms and investment.