New Delhi: In another round of big-ticket reforms, the Union Cabinet will consider tomorrow raising the FDI cap in insurance sector to 49 percent and opening the pension sector to foreign investment besides creation of a National Investment Board. (Agencies)
The Cabinet will also consider a number of other crucial measures like giving more powers to commodity market regulator FMC, Competition Bill to bring all sectors under Companies Act, and model tripartite agreement for operationalising the Infrastructure Development Fund (IDF), sources said.
This is the second time within a month that the cabinet would consider such major proposals to push reform initiative. On September 13, the government had approved the controversial decision of allowing 51 percent FDI in multi-brand retail, besides relaxing FDI norms for civil aviation and broadcasting sector.
While the Insurance Bill seeks to raise the FDI cap insurance sector to 49 percent, from the 26 percent at present, the proposal in the Pension Fund regulatory and Development Authority (PFRDA) Bill seeks to open up the pension sector to foreign Direct Investment (FDI).
Besides, the NIB, to be headed by the Prime Minister, is proposed to be set up for according fast-track clearances to infrastructure projects.
The Forward Contract Regulation Act (Amendment) Bill that aims to give more powers to commodity markets regulator FMC. The Bill seeks to strengthen Forward Market Commission (FMC) by providing it financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
The Union Cabinet is also likely to approve on Thursday, the 12th Five-Year Plan (2012-17) document that proposes to lower annual average economic growth rate target during the period to 8.2 percent from 9 percent envisaged earlier in view of fragile recovery.
The Cabinet is also expected to consider proposal from the Civil Aviation Ministry for approving Lucknow, Varanasi, Tiruchirapalli, Mangalore and Coimbatore as international airports.
Besides, it would also take up the proposal from the Ministry of Corporate Affairs (MCA) to amend the Competition Act 2002 and amendments to the Companies Bill, 2011, following the report of the Standing Committee.
The proposal for IDF before the Cabinet includes a tripartite agreement between developer, lender (bank) and the IDF. The loans by the banks would be refinanced by the IDF so that banks have free funds for more lending.
The IDF, which was proposed in the Union Budget for 2011-12 fiscal, is aimed at accelerating and enhancing flow of long term debt for funding the ambitious programme of infrastructure development in the country.
Besides, the Cabinet would also take up the proposal of amending the Double Taxation Avoidance Agreement (DTAA) with Armenia and Poland.
Cabinet to consider FDI in pension, insurance
Unfazed by the uproar over decision on FDI in retail, the government is determined to give a push to reforms, with the Union Cabinet set to consider on Thursday big-ticket measures like opening pension sector to foreign investment and raising FDI cap in insurance sector to 49 percent.
The Cabinet will also consider the Forward Contract Regulation Act (Amendment) Bill to empower commodity markets regulator FMC with greater financial autonomy, facilitate the entry of institutional investors and introduce new products for trading such as options and indices.
It will also take up the Companies Bill to bring all sectors under the Companies Act, amendment to the Competition Act and a proposal for operationalising the Infrastructure Development Fund (IDF), sources said.
A proposal to set up a National Investment Board (NIB), to be headed by Prime Minister Manmohan Singh, for according fast-track clearances to infrastructure projects will also be taken up at the meeting, they said.
The Pension Fund Regulatory and Development Authority (PFRDA) Bill, to be considered by the Cabinet, seeks to open up the pension sector to FDI of upto 26 percent.
The Insurance Laws (Amendment) Bill seeks to raise the FDI cap insurance sector to 49 percent from the 26 percent at present.
This is the second wave of reforms decisions to be undertaken by the government within a month. On September 13, the government had approved the decision of allowing 51 percent FDI in multi-brand retail, besides relaxing FDI norms for civil aviation and broadcasting sector.
The decision on FDI in retail triggered a major uproar, with some allies and opposition parties launching a massive attack on the government. Trinamool Congress even withdrew support to the government.
The Cabinet is also expected to approve 12th Plan and accord international status to five airports.
Cabinet to consider ratification of Nayoya Protocol
The Union Cabinet is likely to consider giving its approval for ratification of the Nagoya Protocol on Access and Benefit Sharing (ABS) on Thursday.
The objective of the Nagoya Protocol on ABS is fair and equitable sharing of benefits arising from the use of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies.
India has already signed the protocol, a new international treaty adopted under the auspices of the Convention on Biological Diversity (CBD) after six years of intense negotiations.
It was adopted by the tenth Conference of Parties (CoP-10) held in Nagoya, Japan in October 2010.
India's move to ratify the protocol came as the 11th Conference of Parties (CoP) to the CBD is underway in Hyderabad.
The country believes the ABS Protocol, which is a key missing pillar of the CBD, would address the concern of misappropriation or biopiracy of its genetic resources.
Though the Protocol has received 92 signatures signaling the intent of countries to abide by the Protocol, the process of ratifications has been slow, presumably because this international treaty envisages that countries put in place the required legal, policy or administrative measures to implement the provisions of the Protocol, an Environment Ministry official has said.
Very few countries have domestic ABS mechanisms in place. However, there was hope that the process of ratifying the Protocol would pick up fast ensuring an early entry into force of this treaty.
Govt likely to consider FCRA bill
The government is likely to take a decision on Thursday on a bill that seeks to provide more powers to commodity market regulator Forward Markets Commission (FMC) and introduction of products like options.
"The Cabinet is likely to take up the Forward Contract Regulation Act (Amendment) Bill tomorrow," a senior Consumer Affairs Ministry official said.
The FCRA amendment bill has been deferred several times in the past few months because of opposition by then UPA ally Trinamool Congress (TMC).
With TMC withdrawing its support from the UPA government, the FCRA amendment bill has again been listed in the Cabinet's agenda for on Thursday.
The Forward Contract Regulation Act (FCRA) (Amendment) Bill is considered essential for development of commodities futures trade as it aims to strengthen FMC by providing it financial autonomy.
The Bill also facilitates the entry of institutional investors and aims to pave the way for introduction of new products for trading such as options and futures.
At present, the country has five national and 16 regional level commodity exchanges in the country. Recently, the FMC gave approval to the Universal Commodity Exchange to operate as a national bourse.
Cabinet may take up Companies Bill
The Cabinet is likely to discuss the revised draft of the Companies Bill on Thursday.
The new Bill, which proposes many new norms including companies' spending on Corporate Social Responsibility (CSR) activities, has been in the works for some time.
Sources said the Companies Bill 2011 is expected to be taken up by the Cabinet on Thursday.
Once cleared, the Bill would be introduced during the winter session of Parliament.
Last week, Corporate Affairs Minister Veerappa Moily had said the final draft was before the Cabinet.
The final draft of the Companies Bill 2011, has been prepared after considering recommendations of the Standing Committee and comments from the finance and law ministries as well as the Planning Commission.
As per proposals, companies -- subject to certain levels of profit or turnover or net worth -- have to spend about two per cent of their three years' average profit towards CSR activities.
Among others, the new Bill would provide more powers to the Serious Fraud Investigation Office (SFIO).
New Delhi: In another round of big-ticket reforms, the Union Cabinet will consider tomorrow raising the FDI cap in insurance sector to 49 percent and opening the pension sector to foreign investment besides creation of a National Investment Board.