New Delhi: Going into overdrive, the Congress-led United Progress Alliance (UPA) on Thursday cleared a raft of long-pending proposals to ease the fiscal pressure on the government on the one hand and address the aspirational middle class on the other, ahead of the general elections due in April.

It signed off on a proposal, which together with an approval effected last week, will add nearly 16,000 medical seats to state and central government medical colleges. It will improve the prospects of students aspiring to join courses in medicine, and contribute in a small way to improving the doctor-patient ratio in the country.

Similarly, in a bid to meet its ambitious divestment target and adhere to its fiscal deficit target of 4.8% of gross domestic product (GDP), the Cabinet Committee on Economic Affairs (CCEA) cleared the decks for the divestment of a 13% stake held by the Specified Undertaking of the Unit Trust of India (SUUTI) in Axis Bank Ltd, which could raise about 7,000 crore for the government.

“The proposal of the finance ministry has been approved," information and broadcasting minister Manish Tewari said.

UPA also approved a policy to regulate television rating agencies in a move aimed at ensuring “fair competition, better standards and quality of services" by the agencies, an official statement said.

The government in March 2012 had decided to dismantle SUUTI and transfer its sizeable assets under management to a new asset management firm, with the intention of pledging the shares with banks to raise money that can be used to buy the government’s stakes in public sector undertakings.

SUUTI was formed to oversee the assured-return plans of the erstwhile Unit Trust of India, which was bifurcated after running into financial trouble in 2001. It owns significant stakes in well-run companies such as ITC Ltd, Larsen and Toubro Ltd and Axis Bank.

The government has garnered 1,325 crore through the disinvestment process so far this fiscal year, against a target of 40,000 crore.

Separately, a group of ministers headed by finance minister P. Chidambaram on Thursday deferred a decision on disinvestment in Indian Oil Corp. (IOC) following strong opposition to the stake sale by the oil ministry.

“It has been deferred," oil minister M. Veerappa Moily told reporters after the meeting of the empowered group of ministers (EGoM).

While Moily refused to elaborate on the reasons for the deferment, people familiar with the situation said his ministry had raised concerns over the pricing of IOC shares. The EGoM may again meet next week, they said.

The finance ministry had been aiming to raise 4,500 crore by selling a 10% stake in the oil refiner and retailer, to reduce the fiscal deficit. At Thursday’s closing price of 198.95 on BSE, IOC has a market capitalization of about 48,000 crore.

Kunal Kumar Kundu, vice-president and India economist at Societe Generale, said though the Axis Bank stake sale will ease the fiscal pressure on the government, meeting the fiscal deficit target of 4.8% of GDP in the current fiscal year will be challenging.

“Under the current environment, pricing of shares for disinvestment remains an issue," Kundu said. “Because the government is not able to pay the subsidy bills to the oil marketing companies, they are forced to borrow at a higher cost from the market which in turn affects their profitability and share prices. Under the current political environment ahead of the general elections, even if there is intention, the government may not be able to rationalize fuel prices."

The fiscal deficit, or gross borrowings of the Union government, widened to 94% of the full-year target in the eight-month period to November from 80.4% in the year-ago period, as revenue collections failed to keep pace with expenditure, data released by the controller general of accounts (CGA) last month showed.

The fiscal deficit of the Union government in the April-November period was 5.09 trillion, against a budgeted target of 5.42 trillion for the year to next 31 March.

In another decision, two years after the proposal was first made, the cabinet approved the surrender of broadband wireless access spectrum by state-run telcos Bharat Sanchar Nigam Ltd (BSNL) and Mahanagar Telephone Nigam Ltd (MTNL) and subsequent refund of the upfront money paid for the airwaves.

BSNL will get 6724.51 crore, the upfront fee for spectrum to be returned in six circles of Gujarat, Maharashtra, Andhra Pradesh, Karnataka, Tamil Nadu and Kolkata.

MTNL will get 4533.95 crore, the upfront fee for spectrum returned in Delhi and Mumbai, where it operates.

The money is expected to go a long way in helping the public sector companies reduce their losses by using the money to retire outstanding debt.

The cabinet also approved the policy framework for regulating the television rating agencies that would govern their functioning in the country. The rules were first drafted by the Telecom Regulatory Authority of India (Trai) in September 2013 and were brought to the cabinet by the minister of information and broadcasting after an inter-ministerial committee had approved them.

The salient features of these guidelines dictate that TV rating agencies should have a minimum number of 20,000 panel homes for collecting viewership data and this number should increase till the figure of 50,000 is reached.

The guidelines also prevented any single company/legal entity from having paid up equity in excess of 10% simultaneously in both rating agencies and broadcasters/advertisers/advertising agencies.

These move could jeopardize the functioning of Television Audience Measurement (TAM), a leading television viewership rating agency. TAM Media Research is a 50:50 joint venture between Nielsen (India) Pvt. Ltd and Kantar Media Research. Kantar is a unit of London-based advertising company WPP Plc.

The guidelines require rating agencies to set up an internal audit mechanism to have their methodology audited. The government and Trai would reserve the right to audit the methodology of the rating agencies.

While the statement issued by the government gave 30 days’ time for the rating agencies to comply with the changes, any non-compliance with the guidelines would lead to “forfeiture of two bank guarantees worth 1 crore furnished by the company in the first instance". If the guidelines were found not to be met again, the registration of the agency would be cancelled.

“TAM has not budged on its metering requirements as well as the number of complaints on their ratings practices. It’s natural for the government to look at alternatives," said an industry expert who refused to be identified.

TAM declined to comment on the issue.

In a sop to the rural sector, CCEA approved an increase in import duty on edible oil and continuation of the Mill Gate Price Scheme (MGPS) that provides subsidy to weavers. The increased import duty of 10% from the existing 7.5% will help “maintain a reasonable differential between import duty on crude and refined vegetable oils to protect the domestic refining industry and domestic farmers".

MGPS, which has been renamed as Yarn Supply Scheme (YSS), will continue to supply yarn to weavers at a 10% subsidy with certain modifications and will benefit 2.3 million handloom units.The plan outlay for YSS during the 12th Plan will be 443 crore.

The Union cabinet approved the proposed conversion of leasehold land to freehold land for 366 acres of leasehold residential part of the land at Gandhidham leased out by Kandla Port Trust (KPT) and 988 acres of residential part of land sub-leased by Sindhu Resettlement Corp. Ltd at Gandhidham (428 acres) and at Adipur (560 acres).

“The proposal would allow KPT to focus on its core business and would obviate the need to deploy human resources, which is scarce, for collecting ground rent," Tewari said.

Targeting the youth,the cabinet gave its approval for introduction of the National Youth Policy-2014 (NYP-2014) that will replace NYP-2003 that is currently in force and meant for development and empowerment of youth in the country.

Shauvik Ghosh and PTI contributed to this story.

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