New Delhi, June 29: The cabinet today deferred the issue of new guidelines on foreign direct investment in telecom by three months.
It has given a three-month extension to the department of telecom to ensure compliance of conditions with regard to raising the FDI ceiling from 49 per cent to 74 per cent. The DoT had sought the cabinetís approval to extend the deadline from July 3 to October 2. The telecom ministry had opposed the guidelines on FDI drawn up by a committee of secretaries.
The move will give more time for consultation with different stakeholders, while maintaining continuity of operations in telecom and IT, parliamentary affairs minister P.R. Das Munshi told reporters after the cabinet meeting.
Following this, the Foreign Investment Promotion Board (FIPB) has decided to put into cold storage the proposals of Reliance Communications Ltd and Bharti Tele-Ventures to raise foreign investments in their company.
Once the new rules come into effect, telecom companies can bring in up to 74 per cent FDI against 49 per cent now.
The government had received various representations for reconsideration of the conditions imposed by the Press Note issued on November 3, 2005 regarding raising the FDI ceiling.
The salient points of these representations include the appointment of resident Indian citizens on key positions, remote access, information on accounting, hauling of domestic traffic outside India and calculation of FDI.
Accordingly, the cabinet had given its ex-post-facto approval to the DoTís proposal to extend the correction time by four months from March 3 to July 2, Das Munshi said. Now the deadline has been extended by three more months.
Union communications minister Dayanidhi Maran recently raised objections to introducing differential treatment to security-related issues on the basis of foreign direct ownership in individual companies.
In a meeting with Prime Minister Manmohan Singh, Maran had said a new strategy that guarantees a standardised set of conditions, including the appointment of resident Indians as senior executives, should be worked out.