The Government has decided to allow public sector companies buy back their shares like any private company. Such a move would help the Government meet its disinvestment target.
The Cabinet Committee on Economic Affairs on Thursday approved a proposal to enable the Department of Disinvestment “respond to normal practices in the corporate world if proposed by a Central Public Sector Undertakings.”
In other words, the PSU concerned will first have to approve the proposal of buying back its shares, then the Department of Disinvestment will make the shares available on behalf the Government.
However, the Cabinet withdrew a proposal for duty imposition on power generation equipment. The proposal was to impose 19 per cent duty on power generation equipment for projects with capacity of 1,000 MW and above. The reason cited for withdrawal of the proposal is difference between the Ministries of Power and Commerce. While the Power Ministry is believed to have recommended 19 per cent import duty on equipment for large projects, the Commerce Ministry favoured 24 per cent duty. The Power Ministry's proposal was favoured by the Finance Ministry.
Subsidy cut on complex non-urea fertilisers
In a move that could benefit farmers, the Cabinet also announced a cut in subsidy on complex non-urea fertilisers for fiscal 2012-13, following a decline in global prices and an appreciation in the rupee. The new rates for the phosphatic and potash fertilisers will be effective from April 1. The rates under the nutrient-based subsidy (NBS) scheme for 2012-13 are lower by 10-32 per cent a kg. The subsidy for nitrogen (N) has been fixed at Rs 24 a kg, down from Rs 27.15 last year. While the phosphate subsidy is down 32.6 per cent at Rs 21.80 from Rs 32.33, for potash, the decline is about 10.3 per cent — at Rs 24, from Rs 26.76.
Tougher Motor Vehicle Act
In another decision, the Cabinet cleared a proposal to amend the Motor Vehicles Act to deal sternly with violators of traffic rules. Though this is not the first time amendments to the Act have been recommended, the proposals spell out stringent penalties for traffic violations including drunken driving, use of mobile phones while driving, etc.