The Rajya Sabha on Tuesday passed the Lokpal and Lokayukta Bill 2011 which provides for formation of an anti-graft ombudsman.
In Maharashtra, Anna Hazare said he would end his fast when the Bill is passed in the Lok Sabha.
The most prominent of the group of anti-graft bills on the anvil, the Lokpal bill establishes a Lokpal at the central level and asks states to establish Lokayuktas in a year's time from the date of notification of the law. The format of the Lokayukta will be left to the state assemblies to decide.
The bill was passed by the Lok Sabha at the fag end of the winter session of 2011, but not by the Rajya Sabha, where it was debated but the house was adjourned before voting on it.
A select committee of the Rajya Sabha suggested changes in the bill which were incorporated and approved by the union cabinet.
Now the bill will again have to be sent again to the Lok Sabha for approval of the changes.
Samajwadi Party, which was strongly opposed to such a measure, boycotted the House proceedings after staging a walkout as soon as the debate began this morning.
The proposed law, aimed at dealing with the menace of corruption, will bring under its purview the Prime Minister with certain safeguards and other public servants.
The Bill was brought back to the Upper House after being considered by the Parliamentary Select Committee which recommended several amendments to make it widely acceptable among political parties.
Among the amendments accepted by the government are delinking of the mandatory creation of Lokayuktas by the state governments, one of the provisions which had stalled the passage of the bill in December 2011.
Replying to the debate, Law Minister Kapil Sibal said it was a "historic" day and hoped that all states would pass similar legislations to set up Lokayuktas modelled on this bill.
"The Centre can't give directions to the states," he said, allaying apprehensions that the Union government was dictating. Sibal, who had initiated discussion on the issue, said the law alone would not eliminate corruption but it could help deal with those who are corrupt.
On the issue of bringing the Prime Minister under the purview of the new law, he said the overall consensus was in this favour although there were some "discordant individual views" disfavouring it.
Government accepted all but three recommendations of the Select Committee. The accepted recommendations included not transferring a CBI official investigating a case referred by the Lokpal.
The selection process of the Lokpal has also been changed. It now provides for appointment of the Lokpal by a committee comprising the Prime Minister, the Lok Sabha Speaker, Leader in Opposition in Lok Sabha and Chief Justice of India, besides an eminent jurist appointed by the President on their recommendation.
Among the recommendations not accepted by the government was an accused public servant should not be given any chance to present his or her view before initiation of investigation.
The government said the accused official should be given a chance to be heard before initiation of formal investigation but the "suspense" element would be maintained in case of search and seizure.
CPI(M) leader Sitaram Yechury had moved an amendment to bring public-private-partnership (PPP) projects but it was defeated overwhelmingly by 151 against 19 votes.
The passage of the Bill had become a mere formality as almost all parties, except SP, were in support. The urgency of pushing the Bill is seen in the context of the drubbing Congress faced in the just-held Delhi assembly polls at the hands of Aam Aadmi Party whose main plank was the enactment of Lokpal.
Sibal sought to allay any apprehension over the new measure, saying there will be no element of government interference in investigation that would be carried out against corruption under the Lokpal.
"I don't think it is time to laugh or snigger... it is time for us to rise to the occasion," said Sibal, who piloted the Bill in place of Minister of State for Personnel V Narayanasamy who could not attend the proceedings because of his wife's illness.
He said the government intended to bring more legislations like Prevention of Corruption Bill to fight corruption and they could be passed if the House functions properly.
Leader of the Opposition Arun Jaitley, while supporting the Bill, said he was happy that the government had accepted all the changes in "this changed environment". He did not elaborate but was apparently referring to the drubbing Congress faced in the just-held assembly elections.
Photos: Malaika Arora Khan in Bandra
Photos: Arjun Kapoor, Radhika Apte, Neha Dhupia at Mumbai airport
Photos: Aamir Khan, Amitabh Bachchan, other celebs at MAMI
Photos: Bipasha Basu, Preity Zinta, other actresses celebrate Karva Chauth
'Ae Dil Hai Mushkil' boys Ranbir, Karan on 'Comedy Nights Bachao'