Government for hike in foreign investment cap in telecom
By Our Economy Bureau | 26 Sep 2003
New Delhi: The group of ministers (GoM) on telecom has recommended a hike in the foreign investment limit in Indian telecom companies to 74 per cent from the present overall cap of 49 per cent.
Foreign direct investment (FDI) by foreign telecom companies will still remain capped at 49 per cent; an additional 25-per cent investment by foreign institutional investors (FIIs) will be permitted in the joint venture entity.
Till now, the 49-per cent foreign investment cap on telecom companies included both FDI as well as FII investment. The GoM recommendation, which will go to the union cabinet for approval, is expected to attract more investments in the fast-growing telecommunications sector.
The panel has also recommended that the management control of telecom companies should remain with Indians, regardless of the foreign investment in a company, Union Telecommunications and Disinvestment Minister Arun Shourie said.
The
GoM, comprising six ministers and chaired by Finance Minister
Jaswant Singh, has also recommended that telecom companies
operating within a circle be allowed to merge as long
as the number of operators in that circle does not fall
below three.
