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May 13, 2000


Cabinets nods to a clutch of economic legislations

New IT Bill okayed; transport subsidy for J&K; Rs 1 bn for coconut sector; SFC Act to be amended; credit guarantee scheme for SSIs; Rajasthan Power Project cost revised

Email this report to a friend The Cabinet today approved the revised controversial Information Technology Bill 1999, to enable the government to provide legal framework for the e-commerce trade.

The Cabinet has also accepted the amendments suggested by the parliamentary standing committee of the information technology ministry to the Information Bill 1999, Parliamentary Affairs Minister Pramod Mahajan said in New Delhi today.

The bill will be circluated to members of Parliament on Monday and introduced in the Lok Sabha on May 17, the minister said and added that the details of the bill would be given to MPs first.

According to highly placed sources, the revised bill provides imprisonment for cyber crimes like hacking as well as making it mandatory for all Internet Service Providers and cybercafes to maintain details about the persons accessing the services.

The IT Bill was introduced in the Rajya Sabha during the winter session and referred to the standing committee soon after its introduction. The standing committee has presented its report to Parliament yesterday.

Revised IT bill evokes mixed reactions; cybercafe clause criticised: The National Association of Software and Service Companies or NASSCOM has opposed some of the amendments related to cybercafes in the IT Bill 2000.

These amendments have been suggested by the parliamentary standing committee on science and technology, environment and forests. However, at the same time, NASSCOM welcomed some of the "positive" suggestions made by the committee.

"We feel that IT Bill 1999 is well drafted and would facilitate e-commerce revolution in the country. But, we are opposed to certain amendments suggested in Clause 73 of the IT Bill by the parliamentary committee," NASSCOM president Dewang Mehta said.

It may be recalled that IT Bill was introduced in Parliament in December 1999 and was referred to parliamentary standing committee on science and technology, environment, forests. The committee, comprising 44 members from the Lok Sabha and Rajya Sabha and headed by C Ramachandraiah of the Telugu Desam Party, had submitted its report on May 12, 2000.

''We do welcome this quick report from the committee. We are also happy that committee has done minimal alterations and at the same time provided some positive modifications. However, we feel that the amendments suggested by committee in Clause 73 are not practical and would curtail free usage and proliferation of the Internet in the country.

Mehta said it is unnecessary for government to make it mandatory for registration of every Web site hosted in India as it amounts to duplication of efforts. Moreover, to extend imprisonment for people who do not register is quite draconian.

"Web sites are nowadays hosted by even ten-year-old kids. Why should we unnecessarily force them to re-register their sites because when they register their domain names, they anyway provide all such particulars," he said.

Mehta said that the suggestion that cybercafes should be forced to maintain details about all persons and the Internet sites accessed by them is not a practical suggestion. Moreover, it is not economically viable nor does it help in curbing crime. This suggestion would lead to closure of cybercafes and discourage thousands of people from using the Internet.

He, however, welcomed the suggestion made by committee which had enhanced the punishment for people who create and inject viruses into computer networks. The committee has suggested the virus creator will be fined Rs 10 million instead of earlier provision for a fine of Rs 1 million only.

G P Goenka, president of the Federation of Indian Chamber of Commerce and Indsutry, said the revised IT bill should be circulated in Parliament and its approval sought at the earliest.

The provisions in the bill relating to the prevention of cyber crimes should be implemented in letter and spirit. It is also necessary to adequately publicise the bill to familiarise people with the various provisions relating to the amendment of Indian Contract Act and encryption laws.

Goenka said the basic aim of the legislation is to promote e-commerce and other Internet-enabled businesses in India.

With the cyber laws in place, India can increasingly cap the enormous opportunities in e-commerce, e-tailing, e-banking, e-speak, whereby Indian IT companies can achieve larger market-share in the expanding software business, he added.

Transport subsidy to J&K, Himachal and Sikkim

The government today decided to extend the transport subsidy scheme to Jammu and Kashmir, Himachal Pradesh and Sikkim for another seven years.

The scheme would also be extended to eight hill districts of Uttar Pradesh, Darjeeling district in West Bengal, Andaman and Nicobar Islands and Lakshadweep till March 31, 2007.

The government had introduced the scheme in July 1971 to foster industrial development in the hilly, remote and inaccessible areas of the country. While it is valid up to March 31, 2007 in the northeastern region, it expired in other places on March 31, 2000.

Coconut sector to get Rs 1 bn during Ninth Plan period

The government has sanctioned an outlay of Rs 1.05 billion for the development of coconut production and product diversification during the Ninth Plan period under the central sector scheme on integrated development of coconut industry in India.

Mahajan said the objectives of the scheme were to increase production and productivity of coconuts, bring additional area under coconut, elevate the income levels of small and marginal farmers, generate ample employment opportunties, develop new technologies for product diversification and to build sound information base for coconut industry.

The thrust areas identified under the coconut development scheme are production and distribution of quality planting material, area expansion, integrated farming for improvement through cutting and removal of diseased palms, technology demonstrations, market promotion, information technology, grant-in-aid for development of machinery for coconut processing, human resource development and contingency fund.

During the Ninth Plan,the production of coconuts is expected to increase to 19 billion nuts from the present 13 billion nuts a year, he said.

The constraints in the development of coconut are low productivity, inadequate facilities for development and availability of efficient and viable processing technologies, and lack of sound market intelligence system and market promotion, the minister said.

More than ten million people depend on coconut cultivation, he added.

State Financial Corporation Act 1951 to be amended

The Union Cabinet today approved the Freedom of Information Bill and amendments to related acts and rules.

The bill is likely to be introduced in Parliament on May 17.

The government also decided to amend the State Financial Corporation Act 1951 and repeal the Forfeiture Act 1859.

Credit guarantee scheme for small industries

The government has decided to launch a credit guarantee scheme for small industries to guarantee loans upto Rs 1 million extended by commercial banks.

The scheme called Credit Guarantee Fund for Small Industries or CGFSI would be operational from the current financial year with a corpus of Rs 1.25 billion. It will be implemented by a trust to be set up by the Small Industries Development Bank of India or SIDBI, Mahajan said.

He said the scheme would guarantee loans upto Rs 1 million, term loan as well as working capital, extended by commercial banks and well performing regional rural banks to SSI units without collaterals including third party guarantee.

CGFSI will guarantee 75 per cent of the principal amount of the credit extended by the lender. There will be a lock-in period of 24 months from the date of disbursement of the loan to the borrower prior to the lender preferring any claim on the fund.

Seventy five per cent of the guaranteed amount will be paid by the fund to the lender immediately on preferring claim by the lender,after recall of the loan and initiation of recovery proceedings.The balance 25 per cent of the guaranteed amount will be paid on conclusion of recovery proceedings by the lender.

Mahajan said the proposed CGFSI would improve the credit availability to SSI units and help the SSI units to enhance their capacity utilisation, besides providing them strength to compete in the free market

In the absence of adequate availability of credit to the SSI units from the banks mainly on account of the inability of entrepreneurs to provide collaterals, capacity utilisation of these units is less than 50 per cent, he pointed out.

Rajasthan Atomic Power Project III and IV cost revised

The Cabinet Committee on Economic Affairs today revised the capital cost of the Rajasthan Atomic Power Project III and IV at Rs 25.11 billion -- base cost Rs 17.11 billion plus Rs 8 billion interest during construction.

On completion, RAPP III and IV would generate 2,420 mega-watts annually at a 62.8 per cent normative capacity factor and 440 MW installed capacity would be added to the northern grid.

Tariff for power from the project would be fixed in consultation with the Central Electricity Authority.

The CCEA also approved the revised cost of estimate of Kaiga I and II at Rs 28.96 billion -- base cost Rs 18.16 billion and Rs 10.80 billion billion as interest during construction. On completion, 440 MW installed capacity would be added to southern grid and would generate 2.420 billion units every year at a 62.8 per cent normative capacity factor.

Under another decision, the CCEA approved a proposal to buy back 2.13 million shares of the Power Finance Corporation at a buyback rate of Rs 2,710 per share against the face value of Rs 1,000. About 1.7 million shares of the rural electrification corporation are proposed to be bought back at Rs 1,150 each against the face value of Rs 1,000.

The buyback of shares would yield an amount of Rs 7.92 billion to the government.

The CCEA also approved creation of a new 440/220 KV substation at Siliguri by Lilo at a cost of Rs 631.9 million by the PowerGrid Corporation of India. The sub-station would strengthen the grid in the northern part of West Bengal.

It approved the revised cost estimate of Dhauliganga hydro-electric project stage one (4 x 70 MW in Uttar Pradesh in the central sector for a cost of Rs 15.78 billion.

Power from this station would be alloted to Uttar Pradesh, Himachal Pradesh, Jammu and Kashmir, Punjab, Haryana, Rajasthan and Chandigarh.

PFC, REC to buy back shares

The CCEA today approved the proposal of buy back of 2.13 million shares of Power Finance Corporation and 1.7 million shares of Rural Electricfication Corporation.

Mahajan said the buyback of shares would yield an amount of Rs 7.92 billion to the government.

PFC will buy the Rs 1,000 face value share at Rs 2,710 per share while the REC will buy Rs 1,000 face value share at Rs 1,150 per share.



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