With few new policy initiatives coming out these days, the media are being increasingly fed with details of the challenges the Government is facing from within. First it was the Special Economic Zone (SEZ) issue that saw the Commerce and Finance Ministries giving out their respective views, mostly in background briefings, and now their differences over foreign direct investment in the telecom sector are filtering to the media.

Despite a Cabinet decision to raise the FDI limit in this sector to 74 per cent, objections were voiced, citing security concerns. Thus, came the safeguards, such as barring foreigners from holding top posts and the insistence on equipment being in India (no remote access) so that these could be inspected if need be.

The industry, obviously, did not relish such restrictions and the Prime Minister's Office sorted out the issue by making the stipulation applicable in case of majority foreign-owned companies and exempting majority Indian-owned ones. But this does not seem to have satisfied the security hawks and it was soon out in the media that the Cabinet has now been given the choice of either having the checks in place or scrapping the whole policy. Depending on which way the decision goes, the media can look forward to some more inspired leaks.

Our Delhi Bureau

(This article was published in the Business Line print edition dated September 29, 2006)
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