Gilt trading norms eased

Cabinet approves government securities Bill

Retail investors will now be able to use government securities for hypothecation and lease like other debt papers. They can also hold the papers in a dematerialised form and effect nominations under the government securities Bill, approved by the Cabinet yesterday, to replace the Public Debt Act of 1944.

Announcing the decision, Parliamentary Affairs Minister Sushma Swaraj said the demand to replace the Public Debt Act was made by several states as they found the market for debt papers restricted among primary dealers and banks.

The Cabinet has also approved a comprehensive legislation to amend the existing three Acts governing chartered accountants, cost and works accountants and company secretaries.

The amendment to the Accountants' Acts incorporate most of the recommendations made by the Naresh Chandra Committee on corporate audit and governance.

The finance ministry and the Reserve Bank of India had made it compulsory to allow non-competitive bidding at any auction of government securities. This was meant to attract retail investors into gilts, but because of the restrictive conditions of holding such paper, investors have not reacted enthusiastically.

The new government securities Bill will make it possible to transfer of all types of government securities from one holder to another and enable securities to be taken out of the purview of the Depositories Act 1966. Both the bills are expected to be referred to the respective standing committees of Parliament after being tabled in the Houses.

Swaraj said the intention of the new comprehensive accountants' Bill was to bring uniformity in the functioning of various accountants' bodies. This will require amendments in the Chartered Accountants Act, 1949, Cost and Works Accountant Act, 1959, and Company Secretaries Act, 1980.

The government has also decided to come out with a comprehensive legislation to ban advertising and control the use of tobacco. With the Cabinet approval yesterday, India would become the seventh nation in the world to ratify this global convention, Swaraj said. She added that it would be implemented three months after at least 40 nations ratify it.

According to the convention, a comprehensive legislation was needed by member countries and the government would be ready with this legislation within 10 days, she said.

The Cabinet also approved of the signing of an extradition treaty with Kuwait which provides a legal framework for extraditing fugitive offenders, including those facing charges of economic crimes.

The Cabinet also approved the draft National Youth Policy 2003, formulated by the ministry of youth affairs and sports. The policy, encompassing education, training and employment, health, environment, sports and recreation, art and culture, science and technology and civics and citizenship, will be tabled in Parliament.