In a meeting that lasted well over two hours, the cabinet also approved amendments to the Securities Contracts Regulation Act (SCRA) to clear the path for index-based trading and give a fillip to the stock markets.Thursday's meeting, to clear the President's address, however, could not take up the much-awaited Information Technology (IT) bill which contains many enabling features for the spread of IT in the country, including recognising of electronic signatures.

The telecom-migration package envisages a shift from upfront licence-fee payment to a more favourable revenue-sharing arrangement for private basic and cellular firms. In August, the union cabinet had cleared an interim revenue share of 15 per cent gross annual revenue with effect from August 1.

The final percentage of revenue sharing will be decided by the Government based on the Telecom Regulatory Authority of India's recommendations. Trai has been asked to forward its recommendations on entry fee and revenue share for cellular and basic services.

The Fema will replace the Foreign Exchange Regulation Act 1973 (Fera). The bill was prepared by the earlier Government to reform the external sector trading environment in tandem with the ongoing economic liberalisation programme.

The Money Laundering bill, which will be simultaneously taken up with Fema, proposes to track illegal money earned through activities like extortion, drug trafficking and gun running.

Both FEma and Money Laundering bills were earlier referred to the standing committee of finance (SFC). These bills, however lapsed because of the dissolution of Lok Sabha. The Government has by and large accepted the modifications suggested by the SFC on these two bills.

The amendments to the Securities Contracts Regulation Act 1956 will pave the way for derivatives trading in the country. The amendments also seek to regulate plantation schemes and permit forward transactions in all government securities, hitherto permitted on a case-by-case basis. The SCRA amendments bill too was introduced in the Lok Sabha earlier but it lapsed because of the Lower House was dissolved.

The IT bill, which will be taken up the cabinet later, seeks to provide a legal framework for electronic commerce and transactions. The bill has proposed an elaborate machinery for licensing, monitoring and certifying authorities. The bill has a provision fro appointment of an controller and adjudicating officers to impose penalty and determine compensation in case of violation of the rules. A Cyber Regulations Appellate Tribunal is also proposed to be set up to hear appeals from the decisions of the adjudicating officers.

The bill is based on the UNCITRAL Model Law and the US State Laws of Utah and Illionis on Electronics and Digital Signatures and the Electronics Transactions Act enacted by Singapore. The President's address to the joint session, scheduled for Monday, would mainly focus on the economic issues and the need to expedite the economic reforms.