* Govt presses the reforms pedal: The Union Cabinet cleared the much-awaited proposal to set up the Cabinet Committee on Investment (CCI) and amendments to the Land Acquisition Bill. The Cabinet also approved re-auction of the 1,800-MHz band spectrum in three telecom circles at a base price 30 per cent lower than that fixed for the recently concluded auction.
* The banking win-win: The government secured the Lok Sabha’s green signal for the Banking Laws (Amendment) Bill, 2011. The bill aims at attracting more foreign investment into the banking industry. It also gives voting rights to investors in private sector banks commensurate with their shareholding.
The government gave a facelift to 56-year-old companies act. On 18 December, the Lok Sabha passed the Companies Act 2012. More importantly, the bill gives more teeth to shareholders. Now, they can take legal action against fraud. Also, it closes a window for independent directors as they won’t get any stock options.
* Who gains,who loses in the new pharma policy?: In November, the Government cleared the National Pharmaceutical Pricing Policy that will bring 348 essential drugs under price control, leading to reduction in prices. It took the government over nine years to decide how to make essential medicines affordable for the common man in India.
* Retail FDI battle isn't over yet: In Parliament, the floor managers of the United Progressive Alliance ( UPA) ensured a clear victory for the government on the question of allowing foreign direct investment, or FDI, in multi-brand retail. That, however, has not dispelled all doubts about the future of foreign investment in the country’s retail sector. Contrary to earlier expectations that a conclusive victory for the government with a vote in Parliament would bolster the confidence of India Inc and foreign investors, there is still no clarity on whether FDI in multi-brand retail has overcome all the political hurdles and the policy change is now irreversible.
* Defer GAAR by 3 yrs, said Shome panel: Allaying investors’ fears over the General Anti Avoidance Rules ( GAAR), an expert panel has recommended that the rules be deferred by three years. It also called for treaty nations such as Mauritius and Singapore to be kept out of GAAR’s purview. In a major positive for the markets and investors, it also suggested the abolition of tax on gains from transfer of listed securities.
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* FY13 GDP growth pegged at decade-low of 5.7-5.9%: The finance ministry has expressed its expectation of a “supportive” policy to help the economy grow at 5.7-5.9 per cent in 2012-13.Though this growth estimate is significantly lower than the 7.6 per cent originally pegged in the Economic Survey, it would require the economy to expand by 5.9-6.3 per cent in the second half of the financial year, against 5.4 per cent seen in the first.
* Inflation at unacceptably high level, said PM: Prime Minister Manmohan Singh has said inflation has risen to “unacceptably” high levels in the past two years, and it needs to be brought down to five-six per cent from over 7.24 per cent in November.
* Factory output is heartening but don't celebrate yet: The Central Statistics Office has released the quick estimates of industrial production for October this year, and they have startled most observers. The overall index of industrial production, or IIP, has risen 8.2 per cent when compared to October 2011. Of course, October of 2011 was a particularly bad month for the IIP — it shrank just under five per cent on a particularly poor performance from the capital goods sector.
* RBI maintains status quo on interest rates: The Reserve Bank of India (RBI) kept key policy rates unchanged but hinted at cutting rates in January, saying the focus of the monetary policy would now shift to spurring growth as inflationary pressures are easing.
* Govt restricts subsidised LPG, raises diesel price: In the second major oil sector reform after petrol decontrol of June 2010, the government has capped subsidised domestic liquefied petroleum gas ( LPG) for a consumer to six per year. For a consumer using 12 LPG cylinders annually, the extra outgo on six additional cylinders at current market price will be Rs 2,106.