Defiant Manmohan goes into reforms overdrive

Unruffled by the intense opposition to FDI in retail and the diesel price hike, the UPA is preparing another round of big-ticket reforms, suggesting a gutsy drive to push its reforms agenda. Gaurav Choudhury reports. Diesel may cost Rs. 1-2/ltr less | FDI notified, PM may address nation today | Braving the storm

Unruffled by the intense opposition to FDI in retail and the diesel price hike, the UPA is preparing another round of big-ticket reforms, suggesting a gutsy drive to push its reforms agenda.

The government on Thursday formally notified the entry of foreign retail giants, virtually diminishing any possibility of rollback. Besides, at least four measures, including settling the retrospective tax controversy with British telecom giant Vodafone, are around the corner.

Even as estranged ally TMC held a rally before finally pulling the plug on the UPA government, it is clear that Prime Minister Manmohan Singh is determined to cover the lost ground — because of his allies’ anti-reforms stance — through a rush of measures, including the move to raise the FDI ceiling on insurance and pension sectors to 49% from 26%.

Sources told HT that the cabinet was likely to approve the amended pension and insurance bills, among other things, in Tuesday’s meeting. But the chances of Parliament voting these bills into law remain uncertain, given the opposition from both the TMC and the Left.

The sources said the government was examining the option of waiving payments of penalties and interest on the tax that was slapped on Vodafone under a new law on retrospective taxation.

Vodafone was in the net for its 2007 acquisition of Hutchinson’s mobile assets in India.

"It is exactly an option. I don't know if it's viable," Vodafone non-executive chairman Analjit Singh said on Thursday. The telecom giant will have to pay R8,000-crore tax instead of Rs 20,000 crore if penalty and interest are waived.

What's more, a debt recast package for cash-starved power companies and the setting up of a national investment board, headed by the Prime Minister, to fast-track infrastructure projects for spinning jobs and income were also on the anvil, sources said.