Inter-ministerial body Telecom Commission is likely to take up the proposal for hiking Foreign Direct Investment limit in the sector from 74 per cent to 100 per cent at its meeting tomorrow.

“It (FDI in telecom) will be discussed in the Telecom Commission meeting tomorrow,” a senior government official told PTI.

According to sources, DoT is of the view that when the current limit of foreign direct investment (FDI) in telecom sector was raised from 49 per cent to 74 per cent, security agencies and the Home Ministry had raised various security related issues.

DoT, therefore, is of the opinion that views of the two ministries be sought on the issue before taking a decision on the recommendations of a high-level committee on financing infrastructure (HLCFI) which has proposed raising the FDI cap to 100 per cent in the telecom sector.

The idea behind increasing FDI limit in telecom sector is to make industry players get fresh funds to lower their financial burden.

According to recent presentation by GSM industry body COAI to DoT, the debt of telecom sector stood at Rs 1,85,720 crore at end of 2011—12. This included debt of Rs 93,594 crore from domestic sources and Rs 92,126 crore from external sources.

The Telecom Commission is proposed to look at creation of Telecom Finance Corporation (TFC) to address the sector’s funding challenges.

The Commission may also examine if the government can divest or lower stake in Telecommunications Consultants India Ltd (TCIL), review the status of National Optical Fibre Network (NOFN) and progress made in different Telecom Development Parameters.

(This article was published on July 1, 2013)
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