Post Gujarat elections, Union Cabinet clears various measures to push reforms

The Cabinet approved a subsidy on all debit card purchases up to Rs 2,000 to promote digital transactions, a package for the leather and footwear industry and an investment subsidy scheme for the Northeast.

Also okayed were a number of legislative items for introduction in Parliament during the winter session that started Friday. The measures came a day after elections in Gujarat concluded.

The Cabinet approved the Muslim Women (Protection of Rights on Marriage) Bill, which makes instant triple talaq a penal offence. Changes in the Negotiable Instruments Act to provide interim relief in cheque-bouncing cases and a bill to revamp medical education in the country were also given the nod.

The Cabinet approved reimbursement of merchant discount rate (MDR) charges to banks for transactions of up to Rs 2,000 for two years starting January 1, 2018.

This will also cover transactions on the Bharat Interface for Money (BHIM), Unified Payment Interface (UPI) and Aadhaar-enabled Payment System (AePS) state-backed platforms. The step is expected to cost exchequer Rs 1,050 crore in FY19 and Rs 1,462 crore in FY20.

"Since such transactions account for a sizeable percentage of transaction volume, it will help to move towards a lesscash economy," said law, justice and information and technology minister Ravi Shankar Prasad in a briefing after the Cabinet decisions.

The government noted in a release that the move will lead to greater adoption of digital payment modes for such transactions. It comes shortly after the Reserve Bank of India revised MDR charges for banks that retailers have said will discourage digital payments.

A committee comprising the financial services secretary, the electronics and IT secretary and the CEO of the National Payment Corporation of India (NPCI) will examine the industry cost structure of such transactions to determine the level of reimbursement, the statement added.

BOUNCING CHEQUES
The proposed amendments to the Negotiable Instruments Act will ease norms and hasten resolution for more than 1.8 million cheque bounce cases pending in various courts. Sources said the bill provides for interim compensation to payees both at the trial stage and at the appellate stage.

Dishonour of cheques due to inadequate funds or other reasons causes serious disruption in the trade, business and micro, small and medium enterprises (MSME) sectors.

If the issuer is acquitted in a cheque-bouncing case, the courts may direct the payee to repay the amount paid as interim compensation with interest, they said. Appellate courts would be enabled to order the appellant to deposit a part of the compensation awarded by the trial court at the time of filing an appeal.

LEATHER SECTOR
The Cabinet cleared a Rs 2,600-crore special package for employment generation in the leather and footwear sector. The Indian Footwear, Leather & Accessories Development Programme will run from FY18 to FY20. The scheme will fund the development of infrastructure for the leather sector, facilitate additional investments, employment generation and an increase in production.

"The special package has the potential to generate 3.24 lakh new jobs in three years and assist in formalisation of 2 lakh jobs as cumulative impact in the sector," Prasad said.

NATIONAL MEDICAL COMMISSION
The Cabinet approved the National Medical Commission Bill to replace the controversial Medical Council of India with a new National Medical Commission to regulate medical education in the country.

Apart from better regulation of the medical education system, the proposed law would open up the medical education sector and create more undergraduate and postgraduate seats. It also provides for setting aside 40% of seats in medical colleges to enable all meritorious students to gain admission irrespective of their financial status.

OTHER DECISIONS
The Bill to replace the Goods and Services Tax (Compensation to States) Ordinance also received Cabinet approval on Friday. It will now be introduced in Parliament. The ordinance had sought to raise the compensation cess on automobile and tobacco products.

The Cabinet extended the centrally sponsored National AYUSH Mission until March 31, 2020, beyond the termination date of April 1, 2017.

It approved the Specific Relief (Amendment) Bill, 2017 to simplify norms for ease of doing business; a new North East Special Infrastructure Development Scheme and a nonlapsable central pool of resources (NLCPR) scheme for Northeastern states with a funding pattern of 90:10 between the Centre and state till March, 2020, with an outlay of Rs 5,300.00 crore. This will enable the completion of ongoing projects.