Financial Daily from THE HINDU group of publications
Saturday, Aug 14, 2004
Info-Tech - Foreign Direct Investment
DoT supports hike in FDI cap
New Delhi , Aug. 13
THE Department of Telecom (DoT) on Friday said that there was no change in the proposal to increase foreign direct investment in the telecom sector from 49 per cent to 74 per cent, which was announced by the Finance Minister in his Budget speech.
Senior DoT officials said the department was supporting the proposal.
Mr Nripendra Mishra, Secretary, DoT, told Business Line, "There is no change from what the Finance Minister has already announced with regard to FDI in telecom. The question of diluting the proposal, as far as DoT is concerned, does not arise."
Mr Mishra's clarification comes in the wake of reports that DoT was against the move to increase FDI in telecom.
Earlier, the Communication and IT Minister, Mr Dayanidhi Maran, also said his Ministry was in favour of increasing the FDI cap.
He said that the country needed investments in infrastructure, and there were countries that allowed 100 per cent FDI in telecom.
The FDI issue has been hanging fire for one year with the then BJP-led Government blaming security concerns for not approving an increase in the FDI cap.
DoT sought to push through a proposal, which allowed financial institutions to take equity in a telecom company up to 74 per cent, even as the FDI cap was kept at 49 per cent. It also inserted riders that sought to keep the management control with Indian promoters in the company.
DoT said that security concerns could be addressed in other ways.
Large telecom companies including Bharti Tele-Ventures, Hutchison and Idea Cellular, which have significant foreign equity, have been waiting for the policy to be announced.
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