At the Cabinet meeting in the evening, which was followed by a meeting of the Cabinet Committee on Economic Affairs, the government cleared the enactment of the Government Securities Act to replace the Public Debt Act, 1944 to encourage development of a retail market for government securities.
Under the Public Debt Act, government securities cannot be hypothecated or mortgaged, and this has sharply restricted its attractiveness for retail buyers. The new law will, however, need to be ratified by all state governments.
The Cabinet also approved the introduction of the Credit Information Companies (Regulation) Bill, 2004, for sharing of information among banks and to improve the functioning of the Credit Information Bureau to help check the increase in non-performing assets, estimated at over Rs 1,00,000 crore.
The Cabinet could not discuss amendments to the Central Road Fund Act, 2002, for apportioning of additional cess between rural roads and the second phase of the National Highway Development Programme. The Bill proposes to change the present apportioning formula for the Central Road Fund, to leave a greater amount for the development of national highways.
The Bills are expected to be introduced during the current session of Parliament. The government also gave ex post facto approval to Oil and Natural Gas Corporation
