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Retail FDI victory fuels govt's reforms push

Source : BUSINESS_STANDARD
Last Updated: Fri, Dec 07, 2012 21:01 hrs

pThe government is preparing to push through at least three pieces of key economic legislation in the winter session of Parliament after securing votes for foreign direct investment FDI in multi-brand retailingppIt has put aside the insurance Bill to raise the FDI cap in the sector from 26 to 49 per cent as it would mean sending it back to the standing committee which recommended retaining the cap at 26 per cent Finance Minister P Chidambaram discussed the issue with senior leaders of the Bharatiya Janata Party BJP a few days ago and appears to have virtually decided to put contentious issues asideppBut the government wants to use the FDI victory impetus to clear the Companies Bill and those amending the banking and pension Acts The session has about six working days leftpp br br The Banking Regulation Amendment Bill critical for the government&rsquos plan to expedite the process of providing new banking licenses could be moved as early as MondayppParliamentary assent to the Bill will enable the Reserve Bank of India RBI to curb misuse of banks by companiesppThe Bill will remove the 10 per cent voting rights limit in private sector banks and increase the cap from 1 per cent to 10 per cent in public sector banksppRBI will have powers to impose penal interest on banks that fail to meet their required cash reserve ratioppThe Companies Bill is also likely to be passed in this session with BJP leaders indicating they will help the government in clearing itppThe Forward Contracts Regulation Act Amendment Bill is another legislation the government has lined up for passage in the sessionppOther important non-financial businesses include the Lok Pal Bill and several long-pending education BillsppOutside Parliament the government machinery is preparing to capitalise on the positive sentiment created by the retail FDI victoryppRail rate increases and a tough Budget are in the offing a senior source in the Prime Minister&rsquos Office saidpp&ldquoThe fiscal situation is not good and there isn&rsquot too much choice&rdquo he said adding the 2012-13 Budget was expected to be a practical one to ensure there is enough outlay to continue financing the flagship schemesppDefence Minister A K Antony had expressed some fear on the defence outlay staying where it isppThe government will push through infrastructure proposals and the constitution of National Investment Board will be a step in this direction added the officialp

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