Prime Minister Narendra Modi on Wednesday chaired a Union cabinet meet that took key decisions to provide a fillip to the country's economy. Decisions ranged from gold schemes to spectrum trading besides approving a policy for capital infusion in the EXIM Bank.
Following are the snippets of the important decisions taken in Wednesday's cabinet meeting.
Gold Monetization Schemes
The Union cabinet formally gave its approval for introduction of Gold Monetization Schemes (GMS), as announced in the Union Budget 2015-16.
The government is hoping that the scheme will reduce the country's reliance on the import of gold to meet domestic demand.
"GMS would benefit the Indian gems and jewellery sector which is a major contributor to India's exports. In fiscal year 2014-15, gems and jewellery constituted 12 percent of India's total exports and the value of gold items alone was more than $13 billion (provisional figures)," a Cabinet Secretariat release said.
The mobilised gold will also supplement RBI’s gold reserves and will help in reducing the government's borrowing cost, it said.
The scheme is likely to help in mobilising the large amount of gold lying as an idle asset with households, trusts and various institutions in India and will provide a fillip to the gems and jewellery sector.
Sovereign Gold Bonds Scheme
The Union cabinet gave its approval for introduction of the Sovereign Gold Bonds Scheme, as announced in the Union Budget 2015-16.
"The scheme will help in reducing the demand for physical gold by shifting a part of the estimated 300 tons of physical bars and coins purchased every year for Investment into gold bonds. Since most of the demand for gold in India is met through imports, this scheme will, ultimately help in maintaining the country's Current Account Deficit within sustainable limits," a Cabinet Secretariat release said.
The Sovereign Gold Bonds, which will be issued on behalf of the government of India by the RBI, will be rolled out on payment of rupees and denominated in grams of gold.
Only resident Indian entities will be able to purchase them.
"The cap on bonds that may be bought by an entity would be at a suitable level, not more than 500 grams per person per year," it said.
The bonds will be issued in denominations of 5,10,50,100 grams of gold or other denominations.
"Banks/NBFCs/Post Offices/ National Saving Certificate (NSC) agents and others, as specified, may collect money / redeem bonds on behalf of the government (for a fee, the amount would be as decided)," the release said.
100 percent FDI, under automatic route, in White Label ATM Operations
The Union cabinet on Wednesday gave its nod to permit Foreign Direct Investment (FDI), up to 100 percent, under the automatic route, in the activity of White Label ATM (WLA) Operations.
"This decision, will ease and expedite foreign investment inflows in the activity and thus give a fillip to the Government's effort to promote financial inclusion in the country, including the Pradhan Mantri Jan Dhan Yojana," a release said.
Among the main conditions for permitting the FDI, the cabinet made it clear that any non-bank entity intending to set up WLAs should have a minimum net worth of Rs 100 crore as per the latest financial year's audited balance sheet.
The government is hoping that the step would help in its objective of enhancing ATM networks in semi-urban and rural areas (mainly in Tier III to VI areas).
The Union cabinet stamped its approval on a proposal of the Department of Telecommunications on guidelines for spectrum trading arising from the recommendations of the Telecom Regulatory Authority of India (TRAI).
Recently, the government had also issued guidelines on spectrum sharing.
Together with the earlier decision, this is expected to transform the spectrum usage in the telecom sector.
Increase of DA by 6 percent
The government hiked the Dearness Allowance (DA) to its employees and Dearness Relief (DR) to pensioners by 6 percent over the existing rate of 113 percent of the basic pay or pension.
The move, which was taken to compensate for price rise, will benefit about 50 lakh government employees and 56 lakh pensioners.
"The increase is in accordance with the accepted formula, which is based on the recommendations of the 6th Central Pay Commission (CPC). The combined impact on the exchequer on account of both Dearness Allowance and Dearness Relief would be in the order of Rs 6,655.14 crore per annum and Rs.4436.76 crore in the financial year 2015-16 (for a period of eight months from July, 2015 to February, 2016)," a release said.
Ex-post-facto approval to capital infusion made in EXIM Bank
The Union cabinet also gave its ex-post-facto approval to the capital infusion made in the Export Import Bank of India (EXIM Bank) of Rs 800 crore. This is in line to the approval made in the Demands for Grants and consented to by the finance minister. The money would be used to help the future growth of the bank.
The EXIM Bank was set up as a statutory Corporation in 1982 with a view to promote the country's international trade and matters connected therewith.
Nod to National Offshore Wind Energy Policy
In a meet chaired by Prime Minister Narendra Modi, the Union cabinet gave its approval to the National Offshore Wind Energy Policy.
"With this approval, the Ministry of New & Renewable Energy (MNRE) has been authorized as the Nodal Ministry for use of offshore areas within the Exclusive Economic Zone (EEZ) of the country and the National Institute of Wind Energy (NIWE) has been authorized as the Nodal Agency for development of offshore wind energy in the country and to carry out allocation of offshore wind energy blocks, coordination and allied functions with related ministries and agencies," a release from the Cabinet Secretariat said.
The approval is a key step forward to help the country secure its voluminously growing energy needs.
"The approval paves way for offshore wind energy development including, setting up of offshore wind power projects and research and development activities, in waters, in or adjacent to the country, up to the seaward distance of 200 Nautical Miles (EEZ of the country) from the base line," the release said.
As per preliminary assessments along the 7,600 km long Indian coastline, some pockets have indicated prospects of development of offshore wind power.
Updated Date: Sep 10, 2015 07:35:03 IST