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New Delhi, Dec. 21: The Union cabinet today “broadly” approved the proposal to increase the foreign direct investment (FDI) limit in telecom to 74 per cent.
The final and revised guidelines are being redrafted and would get the final nod in the first week of January, said finance minister P. Chidambaram.
Approval on FDI norms would also mean that foreign CEOs and CFOs would be allowed in telecom companies, subject to clearance from the home ministry.
On remote access of public switch telephone network (PSTN), Chidambaram said revised guidelines were being drafted.
A green signal from the cabinet will result in significant investments from telecom firms such as BT, AT&T and Cable &Wireless, which have been waiting for clarity on remote access.
The cabinet has also extended the deadline for telecom operators to comply with the revised guidelines on FDI by three months to March 31, 2007. The earlier deadline was January 2.
This is the fourth time that the deadline has been extended to allow companies to abide by the guidelines for increased FDI in telecom since it was announced in February this year.
Earlier this year, the government allowed 74 per cent FDI in telecom but the policy could not be implemented because of differences among the ministries over various clauses, including national security.
“The position of chairman, managing director, CEO and chief financial officer, if held by a foreign national, will be required to be security vetted by the ministry of home affairs,” a draft note on FDI in telecom had said.
It added that security vetting would be required on an annual basis.