With just about a month left before the model code of conduct for the General Elections comes into play, the UPA government is working hard to roll out key policy measures to bolster its reformist image.
Topping the agenda are crucial decisions to further liberalise the foreign direct investment regime in sectors such as railways and construction as well as containing the fiscal deficit that is likely to score better than the projected target of 4.8 per cent in 2013-14, thanks to non-tax receipts from disinvestment proceeds and dividend payments.
With a target of Rs 54,000 crore from stake sales, the government is likely to take up the sale of its 49 per cent residual stake in Balco later this month. On Monday, the Cabinet Committee on Economic Affairs (CCEA) had cleared the 29.5 per cent residual stake sale in Hindustan Zinc Ltd. The two issues are expected to raise around a combined Rs 20,000 crore in the fiscal.
The proposed sale of 20.72 per cent government stake sale in Axis Bank is also likely to go through by February. On Tuesday, the government selected JPMorgan Chase, Citigroup Global Markets and JM Financial to manage the stake sale that could fetch as much as Rs 7,200 crore.
Further, the telecom spectrum auction in early February is also expected to bring in about Rs 11,000 crore. Eight telecom operators in India including Vodafone, Bharti Airtel and Reliance Jio Infocomm Limited, have applied for spectrum auction. The Budget had estimated Rs 40,874 crore from the auction amount, one-time spectrum charge and annual regular licence fee this fiscal.
“Disinvestment along with special dividends may rake in about Rs 65,000 crore to Rs 70,000 crore. Also, on the liquidity side, the government is not spending at all. So these combined could bring down the fiscal deficit to 4.6 per cent of the GDP,” said Abheek Barua, chief economist, HDFC Bank.
Meanwhile, after Rs 16,375 crore special dividend from state-owned Coal India Ltd, public sector banks have also begun interim dividend payouts which are expected to boost government coffers.
“Typically, such dividend payouts are done at the end of the financial year — towards March or April, but this year they seem to have been fast tracked,” said a banker, who did not wish to be named.
Also, a proposal to allow 100 per cent FDI in railways is likely to be taken up by the CCEA next week. “The department of industrial policy and promotion will be placing it before the Cabinet soon,” said a senior government official. According to sources, the proposal has already been approved by the ministry of home affairs. The DIPP is also finalising a proposal on relaxation of FDI norms for the construction sector that is expected to be taken up by the Cabinet soon.
A much-awaited report on defining FDI and foreign institutional investments by a committee led by economic affairs secretary Arvind Mayaram is also likely to be finalised soon. “The draft report has to be reviewed but it should be done over the next few weeks,” said a senior official.
The Centre could also take up long-pending bills including the Insurance Laws (Amendment) Bill and the Direct Taxes Code Bill in the upcoming Budget session of the Parliament. “The intention is to table these in the Lok Sabha but they will obviously need longer to be deliberated upon,” said the official. Finance minister P Chidambaram has also said he plans to seek Cabinet nod for the DTC Bill and place it before Parliament in the forthcoming session.
Meanwhile, in a development that would breathe life into several held-up mega projects, environment minister M Veerappa Moily on Tuesday said he will clear all environmental approval backlog by mid-February. Moily has approved projects worth Rs 1.5 lakh crore in his first three weeks as the minister.
“I have cleared 55 pending cases…in some cases (environmental) approval has been accorded and there are also some where it has not been because of procedures not being followed,” he was quoted by PTI as saying. “I will clear all projects in next 20 days…certainly by the middle of February all pending cases will be decided upon,” he added.
Moily: Cabinet may consider raising LPG subsidy cap this week
New Delhi: With Congress vice president Rahul Gandhi pitching strongly for a higher LPG cap, oil minister M Veerappa Moily today said the Cabinet is likely to consider increasing the quota of subsidised cooking gas cylinders to 12 from nine per household this week.
“After our vice president Rahul Gandhi said 9 cylinders are not enough, I have moved a Cabinet note to increase the quota to 12. I think the Cabinet is likely to consider the proposal this week,” Moily said. PTI