Cabinet okays Bill on forex

NEW DELHI, Oct 21 (PTI) — The Union Cabinet tonight approved the long-awaited legislations to replace the draconian Foreign Exchange Regulation Act, (FERA) cyberlaws, telecom bailout package and amendment to Securities Act to allow derivatives trading in stock exchanges.

In its first meeting yesterday, after the NDA government assumed office, the Cabinet approved the Bill to open the insurance sector to the private and foreign investors. These are among the 14 pending economic legislations whose non-implementation was delaying the reform process.

The twin legislation Foreign Exchange Management Act (FEMA) and the money laundering Bill is now expected to be introduced in the current session of Parliament.

Fema has already been introduced in the last Lok Sabha but could not make progress because of the dissolution of the House following the fall of the Vajpayee government.

While Fema seeks to ease foreign exchange regulations, the money laundering Bill attempts to provide stringent punishment to malpractices in foreign exchange transactions.

The cabinet also cleared a Bill on cyberlaws to facilitate a secure regulatory environment for E-Commerce by providing legal infrastructure governing electronic contracting, security and integrity of electronic transactions.

This Bill also provides legal framework for electronic signature to facilitate electronic governance. The Bill was prepared by the Department of Electronics and Commerce Ministry which was subsequently vetted by the Law Ministry.

Though ministers coming out of the over two-hour-long meeting were tight-lipped, sources said the Cabinet had also approved a Bill to replace an ordinance that provides for voting by postal ballots for displaced Kashmiris.

The President’s Address for the joint sitting of Parliament scheduled for Monday was also approved during the meeting.

The Cabinet also cleared the telecom bailout package that allows private telecom operators to switch over to revenue sharing pattern from the earlier license fee regime, official sources added.

The high court had asked the Cabinet of the new government to clear the telecom bailout package.

The prevention of money laundering Bill is to deal with criminalisation of money laundering and prosecution of offenders by systematically eliminating and discouraging foreign exchange violations.

Apart from provision for repealing FERA, Fema seeks to promote orderly development of foreign exchange market through proper regulation.

Meanwhile, the indefinite strike by transporters against the hike in diesel prices did not echo in the Union Cabinet today but the government said it was open to talks sans a roll back of increase in prices.

The Cabinet did not discuss the issue today but is "open to talks with the agitating transporters," Petroleum Minister Ram Naik, who along with Surface Transport Minister Nitish Kumar is entrusted to negotiate, told PTI after the marathon meeting of the Cabinet.

Ruling out a revision in diesel prices, which were increased by a hefty 35 per cent on October 5, Mr Naik said "there is no question of roll back now."

He said the Centre had informed the states two days in advance to take necessary steps to meet the situation and that the strike did not have a "big impact".

Mr Naik said that compulsions of meeting the oil pool deficit in the face of shooting international crude and petroleum product prices had forced the government to take the harsh measure.