Cabinet addresses prices, markets, banking

The government on Friday announced measures to strengthen the financial sector and set up two bodies to improve the manufacturing and the unorganised sector. It also reviewed the prices of essential commodities like sugar and edible oil.

Further, the Union Cabinet increased the dearness allowance for central government employees and pensioners from 11 per cent to 14 per cent with effect from July 1. The move will result in an annual outgo of Rs 1,600 crore.

In line with the United Progressive Alliance's commitment, the Cabinet Committee on Economic Affairs approved higher royalty for states for minerals other than coal and lignite. The move will result in an additional Rs 96 crore income for the states.

The increase, based on the recommendations of a study group, will not result in an increase in the royalty rates for 39 minerals covered under the ad valorem category. The only exceptions are bauxite and laterite. Royalty on gold, silver, diamond, copper, manganese and gypsum will, however, remain the same.

The CCEA also approved Rs 445 crore outlay for the National Programme for Control of Blindness during the Tenth Plan.

The National Manufacturing Competitiveness Council (NMCC), to be set up under the purview of the commerce and industry ministry, will have key secretaries as its members in addition to the presidents of industry chambers like Ficci, CII and Assocham.

Economists and representatives from Indian Institute of Technology and Indian Institute of Management will also be nominated to the council. Industrialists representing sectors like automobiles, textiles, engineering, food processing, capital goods, leather and IT hardware will also find a place.

The National Commission on Enterprises in the unorganised sector has been mandated to review the current status of the sector and promote enterprise.

It will suggest ways to redesign existing programmes for employment generation in the informal and unorganised sector and will identify legal and financial instruments to promote the growth of the informal sector for employment and exports.

As part of the measures to improve the financial sector, the Cabinet decided to recommend the promulgation of ordinances to amend the Securities Contracts (Regulation) Act, 1956 and the Depositories Act, 1996 and Banking Regulation (Amendment and Miscellaneous Provisions) Ordinance.

"Since the bills could not be introduced in Parliament, it was necessary to carry on business," Finance Minister P Chidambaram told reporters. For instance, the amendments to the Banking Regulation Act will enable the Reserve Bank of India to issue licences to multi-state cooperative societies.

It also ratified the amalgamation of Global Trust Bank with Oriental Bank of Commerce, as the former did not have the financial strength to meet deposit liabilities.

Signing of the agreement on mutual legal assistance in criminal matters between India and Spain was also approved, along with the introduction of Paramedical and Physiotherapy Councils Bill, 2004, in the next Parliament session.

In addition, the government also approved the creation of a new category as 'classical languages' and declared Tamil as a classical language.

The Cabinet also approved the signing of two protocols on protection of rights of children and setting up of an ex-servicemen welfare department in the defence ministry.

It also cleared signing and ratification of the two optional protocols to the convention on the rights of the children, namely, involvement of children in armed conflict and sale of children, child prostitution and child pornography.

Lights, camera, action

• The Cabinet increased the dearness allowance for central government employees and pensioners from 11% to 14% with effect from July 1
• It approved the setting up of two bodies to improve manufacturing and check grey markets
• The CCEA approved higher royalty for states for minerals other than coal and lignite