This is the first meeting of the Cabinet after the knee surgery of Prime Minister Atal Bihari Vajpayee. Briefing newspersons about the decisions taken at the meeting, minister for information technology Pramod Mahajan said, "The Cabinet approved a legislation titled the Financial Companies Regulation Bill, 2000, to replace the provisions of the RBI act, 1934."

The new Bill would regulate and supervise NBFCs and prohibit acceptance of deposits by un-incorporated bodies. Some of the provisions of the proposed Bill would be in conformity with the recommendations made by the task force on NBFCs, Mr Mahajan added.

Commenting on the dedicated fund for national highways, he said the Cabinet has cleared the promulgation of an ordinance for the creation of this fund. The fund will be meant for the financing, development and maintenance of national highways. The fund will be apart from the existing Central Road Fund (CRF), under which a cess on petrol and diesel is collected.

The CRF already has a Rs 5,000 crore kitty. The law ministry had advised the creation of the fund for a specific purpose, Mr Mahajan said.

The Cabinet also approved the repeal of 21 obsolete Acts, one of which dates back to 1856. In all, eight Acts of the nineteenth century vintage will be repealed. The opening up of the insurance sector has induced the government to repeal the Life Insurance (Emergency Provisions) Act, 1956, and the General Insurance (Emergency Provisions) Act, 1971.

These Acts have become redundant for various reasons, Mr Mahajan said. They are being removed as part of the administrative reforms process. The decision to repeal them follows recommendations of the PC Jain commission on review of administrative laws.

A Bill to repeal these 21 Acts will be introduced in the Parliament in the ensuing session, Mr Mahajan said.

Another Cabinet decision pertains to the winding-up of Petrofils Cooperative Ltd, whose accumulated losses are in the region of Rs 460 crore. The government stands to lose about Rs 95 crore in the winding-up operation, Mr Mahajan said, adding that out of this, Rs 54 crore is expected to be spent on the voluntary separation scheme in Petrofils.

Subsidy for Haj pilgrims has been on the rise, he said. Now, the per-pilgrim subsidy stands at Rs 19,044, which is Rs 936 more than that in last year. The total Haj subsidy comes to around Rs 150 crore.

The oil price hike did not figure at the Cabinet meeting. "The issue was not discussed either formally or informally at the meeting," Mr Mahajan said.

Earlier, railways minister Mamata Banerjee reminded the Prime Minister about the issue. Speaking to reporters after the meeting, she said she had written to Mr Vajpayee on how to mitigate the effect of hike in kerosene and LPG prices.

Mr Mahahan also formally announced the appointment of defence secretary TR Prasad as the new cabinet secretary. Mr Prasad will take over the charge from Mr Prabhat Kumar who retires on Tuesday.