Cabinet on overdrive, 27 decisions in a single day

The union cabinet, headed by Prime Minister Narendra Modi, was in overdrive on Wednesday with as many as 27 decisions –including some key ones such as divestment of equity in Coal India and direct subsidy for cane farmers –being approved at its meeting here.

These decisions, some of which signal the continuation of economic reforms, closely follow an official note issued last week in which foreign equity norms were relaxed in some 16 sectors.

This was the first meeting of the union cabinet after the over-a-month-long Bihar assembly polls, during which the model code of conduct barred the government from making fresh announcements.

Besides the decision to dilute stake in Coal India, the cabinet also approved an initial public offer by Cochin Shipyard and three percent interest subsidy to exporters -- decisions which were welcomed by the corporate world, with the Confederation of Indian Industry (CII) calling it “a step in the right direction”.

“The major decisions of the Cabinet Committee on Economic Affairs to disinvest 10 percent stake in Coal India and make initial public offering for Cochin Shipyard send out the right signal that the Government is fast-tracking reforms,” CII said.

The steps are expected to add to investible public resources, while the extension of subsidy in exports is expected to give boost to export sector which has contracted by 18 percent in the year so far.

The infrastructure sector is also expected to get a boost as the cabinet decided to raise the limit of projects approved by the Road Transport and Highways Ministry and gave clearance to as many as 34 road projects apart from clearing Rs.10,000 crore of railway projects.