Govt extends FDI enhancement in telecom till Oct 2

New Delhi, June 29: The cabinet today gave its approval for extension by another three months till October 2, 2006, for compliance of the different conditions for enhancement of foreign direct investment ceiling from 49 per cent to 74 per cent in the telecom sector.

This will give more time for further consultation with different stakeholders and maintain continuity of operation in the telecom sector, Information and Broadcasting Minister Priya Ranjan Dasmunsi said after the Cabinet Commitee on Economic Afairs (CCEA) meeting.

The time extended is with effect from July 3, 2006 to October 2, 2006.

After the cabinet meeting on October 20, 2005 a press note was issued on November 2005 on the enhancement of FDI ceiling from 49 per cent to 74 per cent in the telecom sector.

The press note indicated that an initial correction time of 4 months shall be allowed from the date of issue of the press note to the existing licensee companies providing telecom services for ensuring adherence to the aforesaid conditions. ''This meant that the period of correction was to end on March 2, 2006''. Mr Dasmunsi said.

The government received various representatives for reconsideration of the conditions imposed by in the press note. Some of the main points in these representations were issues like remote access, accounting information, appointment of resident Indian citizens on key positions, hauling of domestic traffic outside India, calculations of FDI etc.

Accordingly, cabinet gave its ex-post-facto approval to proposal of Department of Telecom to extend the correction time by four months with effect from March 3, 2006 till July 2, 2006.

UNI