Big ticket Cabinet decisions likely today

Thursday can see big economic decisions by the Cabinet and Cabinet Committee on Economic Affairs (CCEA).

A highly-placed source told Business Line that, “Cabinet may consider increasing import duty on equipment for power projects with capacity over 1,000 MW. It is also likely to take a call on bringing official amendments in the Forward Contract (Regulations) Amendment or FCRA Bill.”

Interestingly, only last week, the Cabinet deferred the FCRA Bill due to strong opposition from the Trinamool Congress.

These amendments are based on recommendations given by the Parliamentary Committee, he added. The Bill was introduced in the Lok Sabha on December 22, 2011.

The Bill proposes to redefine the expression ‘forward contract’ and allow trading in options in goods and commodity derivatives. This means that once the Bill is approved, options trading can also be allowed, apart from the plain vanilla futures in various agri and non-agri commodities.

Options instruments give the rights to buy or sell but not an obligation.

At the same time, the CCEA is expected to take a view on divesting over 10 per cent equity in steel major SAIL. This issue was also deferred last week as the Steel Minister was travelling abroad.

A proposal for increasing the ‘fair and remunerative price (FRP)’ for sugarcane to Rs 170 per tonne from Rs 145 may also be brought to the CCEA.

CCEA may also take up a proposal for revising tariff value on imported RBD palmoline.

According to the source, the proposal is to de-freeze the tariff value of $485 per tonne on par with international prices.

> Shishir.s@thehindu.co.in