New Delhi: On a day when all the opposition parties and even some supporters of the United Progressive Alliance (UPA) government organised a nation-wide bandh over the recent steps taken by the Centre, sources say that the government is likely to go ahead with more reform measures.
After biting the bullet on foreign direct investment (FDI) in retail and aviation, the Centre is all set to propose an increase in the FDI cap in insurance sector. According to sources, the government is likely to hike the FDI in insurance from 26 per cent to 49 per cent.
According to sources, the decisions will be taken at a Cabinet meeting, which has been deferred to Tuesday.
Keeping into consideration the opposition faced by the government on the reform measures, this proposal may be difficult to implement, as it needs the approval in Parliament.
Notably, not just the opposition parties such as the Bharatiya Janata Party (BJP) and the Left Front are protesting against the recent steps taken by the government, the Trinamool Congress has withdrawn support to the UPA even as the Samajwadi Party and the DMK have asked the government to go for a rollback.
However, unfazed by the protests from both friends as well as foes, the government has gone ahead with the reforms announced last Friday. All FDI reforms announced by the government have come into effect from Thursday.
Prime Minister Manmohan Singh, meanwhile, is likely to make a statement on the diesel price hike and the reforms by the government on Friday.
The Congress-led UPA government has also decided to fast-track the disinvestment process.
According to sources, the government is confident of reaching the disinvestment target of Rs 30,000 crore in the 2012-13 fiscal. The disinvestment process could start this Diwali with stake sale taking place in small tranches of two-three per cent each to avoid market volatility.
The Securities and Exchange Board of India (SEBI) board is scheduled to meet soon soon to revive market sentiment. Finance Minister P Chidambaram has proposed single window clearance under Prime Minister Manmohan Singh for infrastructure projects.
The government will also identify projects which are to fast tracked by October 15.
This comes after the government last Friday cleared FDI in multi-brand retail, single-brand retail, aviation, broadcasting and power exchanges.
The Cabinet allowed 51 per cent FDI in multi-brand retail, and permitted FDI, up to 100 per cent, in single-brand retail trading, subject to specified conditions.
In another major decision, the government had approved FDI in aviation, allowing up to 49 per cent investment. The decision means that foreign airlines will now be allowed to invest as much as 49 per cent in the Indian carriers. However, this won't be automatic as the companies will have to get clearance from the ministry and FIPB.
Besides, the price of diesel was hiked by Rs 5 per litre and it was decided that only six LPG cylinders will be issued to a household each year at the subsidised rate.
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