Cabinet to take up SAIL stake sale, FCRA Bill today

Imposition of import duty on cheap power equipment, mainly from China, will help provide a level playing field to domestic manufacturers. The earlier proposal before the Cabinet was to consider 19% duty on power generation equipment for projects with capacity of 1,000 MW and above. Currently, equipment imported for projects of less than 1,000 MW capacity attract 5% customs duty, while those above this capacity are exempted from any duty. In May, the Cabinet had deferred the proposal to raise the duty on imported power gear.

However, last month, the power ministry had circulated a Cabinet note to this effect at the behest of the Prime Minister’s Office and the Cabinet meeting scheduled for Thursday evening is expected to take up the matter for consideration, sources said.

The industry has been demanding higher duty on overseas power gear in order to provide a level-playing field for domestic manufacturers.

So far, there has not been a common ground over the quantum of duty that should be imposed on overseas power equipment. While the power ministry has pitched for 5% customs duty, the ministry of commerce and the ministry of heavy industry have sought 15% and 10% customs duty, respectively. There is also no common ground between the Planning Commission and the Coordinating Committee of Secretaries (CCoS). While an internal committee of the Plan Panel has suggested imposition of 14% levy and 10% customs duty, the CCoS has pitched for 19% levy on imported power gear, including 5% customs duty.

The follow-on public offer in SAIL, which is also before the Cabinet, is expected to fetch around Rs 4,000 crore to the government. The matter was listed for Cabinet’s approval last week but could not go through as steel minister Beni Prasad Verma was in Tokyo. The proposal for divestment of the government?s stake in SAIL before the CCEA was put up by the department of disinvestment (DoD). A DoD note to the CCEA said the ‘offer-for-sale’ route would be taken for the stake dilution in SAIL. It, however, did not indicate a specific time-frame for the disinvestment as the ?time of the issue will depend on market conditions?.

The Cabinet is also expected to clear the much-delayed FCRA Bill as it has managed to convince ally Trinamool Congress, which has been opposing it. After its introduction in the Lok Sabha in December 2010, the FCRA (Amendment) Bill was referred to the Parliamentary Standing Committee on Food, Consumer Affairs and Public Distribution. The Vilas Muttemwar-headed Standing Committee submitted its report a year later suggesting greater autonomy for the FMC, which regulates both spot and futures commodity exchanges.