Mahajan Announces Measures for Luring FDI

Pramod Mahajan, Union minister for Communication stated that the government was making all efforts to ensure packages for reducing revenue sharing in telecom sector and luring foreign players to promote more investment in the country. The minister was speaking at the inaugural question and answer session with Bob Hayward, Senior Vice President, Gartner, APAC at the NASSCOM Gartner Summit 2002 on `ICT Strategies for Success’ at Mumbai. While replying to a question posed by Hayward on India’s success story in the telecom sector, Mahajan said, “If there is any success story in India, it is in the telecom sector. Although India has almost reached the international tariff standards, the services are yet to reach the international mark.” The minister said that a small group consisting of the deputy Prime Minister, finance minister and communications minister has been formed to address the issue of better spectrum management. The other two issues relate to revenue sharing agreement that would help telecom industries to move from a license-sharing regime to a revenue sharing regime. “The rationalization of the tax structure would ensure that companies get more money,” he said.

“We will take a decision on issues related to telecom. Since the industry is already in a crisis, we do not want this crisis to enter India and have therefore jotted down areas to ensure that the industry gets more money,’’ he clarified at a press conference later.

The minister stated that he was not opposed to raising FDI from the present 49 percent to 74 percent provided the management control remained with the Indian counterpart. The other issues would be a better management of the allotted spectrum, which, he said, should be used judiciously. Mahajan said that WLL had a bright future in India. Replying to a question posed by Hayward on the emerging trends, he said that efforts were being taken to ensure that the every village in the country would have at least one public telephone by the year December 2003. He agreed that affordability of a computer was still a critical issue in the country and maintained that the government was making every effort to reduce prices of computers.

A Bangalore based company has already come out with a Simputer and this could take the price of a computer to less than Rs 10,000. The minister said that complicated computers were really not required for India. What we are trying to do is trying to promote computers, which are cheaper, and a tax structure in such a way that they become cheap. 

He said that power still posed a major challenge. With power reforms coming in a big way, every family in the country would get power by the year 2007, he said. On the improvement in infrastructure, the minister said that the government was ready to look into any company specific issues. If any company wishes to make a big investment here, we are ready to give them all support he said, adding that a big stretch of land was available near Delhi airport for investment by any interested company.

The minister said that while the government was concentrating on e-governance projects, the state government should also come forward to bridge the gap