New Delhi: The Union Cabinet on Friday turned down a proposal by the Communications Ministry to keep in abeyance the increase in Foreign Direct Investment limit to 74 per cent from 49 per cent in telecom sector and directed resolution of inter-ministerial differences within three months.
"Department of Telecom had suggested suspension of Press Note 5 and the matter was discussed. The decision to increase FDI to 74 per cent stands," Finance Minister P Chidambaram said after a Cabinet meeting chaired by the Prime Minister here.
After the discussion on DoT's proposal, the Cabinet decided to give three months time for resolving the inter-ministerial differences and extend the time frame for telecom companies to meet the new FDI conditions, Chidambaram said at a post-Cabinet press conference.
Differences within the Government, including with the Defence Ministry, on structure of telecom companies under the new dispensation had rendered DoT ineffective in implementing the guidelines frame in accordance with the new FDI dispensation.
"Perhaps they were feeling difficulty to reconcile with differences," Chidambaram said when asked as to why DoT was seeking suspension of FDI decision.
"There may be an amendment at the end of three months... If there is any, this would be included in Press Note 5," he said.
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