As the year rolls into half-time, Moneycontrol.com lists the five policy decisions that impacted the common man and the corporate world during the last six months. While most these significant decisions were announced based on reports submitted by expert committees, others were taken to stem the worsening economic situation and the ballooning trade and current deficits. The decisions also indicate the UPA government’s desperate attempt to improve its image with the general elections round the corner.
Diesel de-regulation: In a bold policy decision, the government partially deregulated diesel price allowing a hike of 40-50 paise a litre per a move that was feared to have a cascading effect on inflation.
FII entry norms relaxed: With an aim to attract larger number of foreign investors to Indian capital markets, SEBI approved the merging different classes of investors such as FIIs, their sub-accounts and qualified foreign investors (QFIs) into a new category, foreign portfolio investors (FPIs), to put in place a simplified and uniform set of entry norms for them.
Sugar-decontrol: The government decontrolled the sugar sector which means sugar mills will no longer have to sell sugar to the government at a discount. The limits on the amount that mills can sell in the open market have also been removed. However, this policy decision doubles the government's subsidy burden to Rs 5,300 crore annually from about Rs 2,600 .
Gold import norms got stricter: In an effort to control record high current account deficit, the Reserve Bank of India (RBI), said imports of the precious metal against suppliers' or buyers' credit will be on a 100-percent cash margin, and on document against payment basis.
Gas price hike: The Cabinet Committee on Economic Affairs (CCEA) almost doubled natural gas price to USD 8/mmBtu. The move may have pleased gas exploration firms but the price rise. has not gone well with customers from the urea sector as itwould substantially increase their production cost of urea firms.