The latest development in the ongoing saga of decontrolling sugar from government control is Agriculture Minister Sharad Pawar meeting the Prime Minister Manmohan Singh on Thursday to present a case for liberating the sector. Earlier the parliamentary panel on food and agriculture had recommended against sugar decontrol, saying that it will harm both farmers and consumers.

The sugar industry, at present, is controlled by government, by specifying the quantity to be sold in the open market and through public distribution system (PDS) every month. With the imminent bumper crop, which will be ready in two months’ time, the move to decontrol sugar is gaining momentum.

The presentation made by Mr. Pawar to the Prime Minister is believed to include plans and methods Food Ministry will be adapting to free sugar industry from governmental control. Mr. Pawar is understood to have discussed the beneficial outcomes of the move for farmers and consumers.

Among the proposals put forth by Food Ministry is doing away with the practice of setting monthly quota for sale of sugar in open market and through ration shops. Now, sugar mills are bound by law to sell 20% of the sugar produced to government for sale in ration shops. To meet the sugar requirement for PDS, the ministry has advocated purchase of sugar from the open market.

It is believed that the Food Ministry has proposed to give freedom to farmers to sell their produce wherever they want to, instead of the present practice of selling sugarcane to specified mills.

Earlier, Mr. Pawar had hinted that despite decontrolling sugar industry, the government would continue to fix Fair and Remunerative Price (FRP) for sugarcane to protect farmers from exploitation. This is the minimum price to be paid by mills to buy sugarcane from farmers.

The BlackBerry issue is not yet resolved; the government is stepping up efforts to get data access to all communication services in the country. The Home Secretary G K Pillai said that notices are being sent to all companies providing communication services in India to make available access solutions to security agencies so that they can monitor the data as and when required. The firms are also being asked to set up a server in India.

Most important among the service providers who are issued notices are Google and Skype, the internet phone call provider. The notice asks the firms to make suitable arrangements to provide access to their services within the next 60 days.

Meanwhile, Research In Motion (RIM), the BlackBerry maker averted an imminent ban on its services by agreeing to set up a server in India and provide partial access to its encrypted data. Home Minister P Chidambaram confirmed that RIM has already begun providing access to some of the communications transmitted through its system. The government has given the smartphone maker a 60-day extension of August 31 deadline for complete compliance. The minister added that there won’t be any compromise on national security with regards to BlackBerry, Google or Skype.

“Discussion on technical solutions for further access is continuing and the matter will be reviewed within 60 days,” the minister concluded. “Our stand is firm. We look forward to get access to data… There is no uncertainty over it.”

Mr. Pillai said, “People who operate communication services in India should have servers in India as well as make available access to law enforcement agencies, whatever communications passes through telecommunication network in India and that has been made clear to RIM of BlackBerry but also to other companies.”

In response to the discussion paper circulated by the Department of Industrial Policy and Promotion (DIPP) on permitting 100 per cent FDI in multi-brand retail, the Consumer Affairs Ministry has disclosed its views through a letter to the Commerce Ministry. While recommending 49% foreign investment in multi-brand retail, the ministry wants enforcement of a law at the state-level to protect small stores from the onslaught of big brands.

The Consumer Affairs Ministry has also put in a recommendation to set aside a significant chunk of investments for the development of back-end infrastructure, logistics and agro-processing, which is the dire need of the hour. To regulate the fiscal and social aspects of the retail sector, the ministry has sought legislation of the National Shopping Mall Regulation Act. This should also allow local stores to become franchises of multi-brand retail stores.

Meanwhile, the discussion on the topic is gaining momentum in the country with clearly demarcated supporters and opponents. The feedbacks received by DIPP till date reveals a huge chasm between the two groups. While the retailers and industry, both domestic and overseas, favor the introduction of FDI in multi-brand retail, the unorganized sector comprising of farmers, traders and shopkeepers are resisting the move with all their might.

At present, India allows 51% FDI in single-brand retailing and 100% FDI in wholesale or cash-and-carry operation. With Indian economy expanding at an amazing rate, backed by the growing domestic consumption, top international retailers are eagerly waiting for the legislation to enter multi-brand retail segment to exploit the opportunity. Global retailers Walmart and Carrefour are leaving no stones unturned to strengthen their case.

The Union Cabinet approved the Direct Tax Code (DTC) Bill on Thursday, which will replace the existing Income Tax Act, 1961. Though touted as a radical overhaul of the present tax structure, the latest edition of the Bill is just a watered down version of the revised DTC draft released earlier.

The central government had announced its intention to widen income-tax slab for individual taxpayers in the DTC Bill. This was implemented only marginally comes as a relief. The government has proposed to raise individual income-tax exemption limit from the existing Rs 1.6 lakh to Rs 2 lakh. The upper limit for the second slab has also been raised from Rs 8 lakh to Rs 10 lakh. For senior citizens and women, the threshold income is raised from Rs 2 lakh to Rs 2.5 lakh.

For corporates, the cabinet decided to retain the existing tax of 30% for Indian companies, including 10% surcharge and 3% education cess. This falls short of the 25% suggested in the draft. The Minimum Alternate Tax (MAT) will be hiked from the present 18% to 20% of book profit, which is a definite step-down from the draft proposal. The original DTC draft had advocated calculating MAT on gross asset base, which would have resulted in higher tax rates for capital-intensive sectors such as infrastructure and capital goods.

Finance Minister Pranab Mukherjee said after the cabinet meeting that the goal of the new DTC Bill is to eliminate the multitude of existing tax exemptions and to streamline the tax structure. He said that in the new structure, there will be three simple tax slabs and the rate of taxes will be taken in the schedule so as not to change them every year.

The DTC Bill is expected to be presented in the Parliament on Monday and probably will be referred to a Standing Committee. The new Direct Tax Code is expected to come into effect from 1 April, 2011.