Purchase preference for PSUs may be extended

The Union Cabinet is scheduled to discuss the extension of purchase preference to central public sector undertakings by another three years from March 31, 2005.

It will also consider a plan to clear Food Corporation of India's outstanding dues of Rs 26,000 crore owed by the rural development ministry under the Sampoorna Gramin Rozgar Yojana, the food-for-work programme and some other schemes.

It will also consider allocating an additional Rs 600 crore to the elementary education department for the mid-day meal scheme.

The government is also set to constitute the Prarambhik Shiksha Kosh for parking the proceeds of the education cess levied last July. The government collected Rs 5,000 crore through the 2 per cent levy last year and is expected to mop up around Rs 7,000 crore this fiscal.

The proceeds are to be used to fund the Sarva Shiksha Abhiyan, a scheme aimed at ensuring that all children in the 6-14 year age bracket complete eight years of schooling by 2010.

So, far the proceeds from the education cess was kept in the Consolidated Fund of India.

The proposal for merger of Indian Oil Blending Ltd with Indian Oil Corporation will also be taken up by the Cabinet. The IOC and IOBL boards had earlier cleared the proposal and only a Cabinet nod was awaited to formalise the merger.

Indian Oil Blending Ltd, which reported a 50 per cent fall in its net profit to Rs 57 lakh during 2003-04, is a fully-owned subsidiary of Indian Oil. It is engaged in the manufacturing of lubricants and greases and catering to the defence, the railways, state transport among others.

The merger was being considered important for IOBL's survival since the company was very small compared to the other players in the market and had no marketing set-up of its own, said IOC executives.

The cabinet committee on economic affairs is also slated to take up the proposal for integrated development of the leather sector.

Under the proposal incremental grant of 30 per cent would be given to small-scale industry and 20 per cent to the non-small scale units, tanneries and leather products.