The government on Thursday approved a proposal for divestment of 10.82% government stake in steel major SAIL and decided to impose an effective duty of 22.3% on import of power equipment ? a move that would help public sector BHEL and private firm L&T.
Sources said the Cabinet also approved the
de-merger of surplus land of Videsh Sanchar Nigam Limited (VSNL) ? the PSU that was sold to Tatas in 2002.
The auction of
740.6 acre of land owned by VSNL is expected to get R10,000 crore to the exchequer. The company has 740.6 acre of surplus land across three states ? Delhi, Maharashtra and Tamil Nadu.
The new import duty on power equipment for all commercial projects include 5%import duty, 12% CVD and 4% SAD.
The Cabinet also extended term of Shah Commission probing illegal mining activities by a year.
Domestic power equipment suppliers like Bhel and L&T have been lobbying with the government for the imposition of duty to curb imports of power equipment from China, which are 20-25% cheaper. They have argued that they need a level-playing field against Chinese suppliers. On the back of their comparative cost advantage over Indian vendors, Chinese suppliers have captured 22-25% of the Indian power equipment market.
The cabinet, however, again deferred a proposal to amend the Forward Contract (Regulation) Act, 1952, to provide greater autonomy to the commodity market regulator, the Forward Markets Commission (FMC), with railway minister Mukul Roy keeping himself out of the meeting.
TMC, to which Roy belongs, has been against the Forward Contracts Regulation (Amendment) Bill 2010, which seeks to provide for tougher oversight and freer entry of financial institutions, as well as launches of new products such as options and derivatives.
The issue has been hanging fire for long while the government imposed periodic bans on trading in some agricultural futures in the pretext of stemming inflation have fed regulatory cynicism.