The government has slapped a hefty penalty of about Rs 6,600 crore ($1.235 billion) on Reliance Industries for the steep fall in gas output from the KG-D6 block, sharply escalating the oil ministry's raging dispute with the Mukesh Ambani-controlled company. The oil ministry sent a notice to Reliance Industries late on Wednesday, admonishing it for the decline in production and said the company had violated the production sharing contract (PSC) and wilfully drilled fewer wells than what it had committed in its approved plan, called the Amended Initial Development Plan (AIDP).