CBI probing alleged SingTel violation of Indian telecom laws

SingTel was billing the local customers in India without having the telecom license in the country flouting the telecom norms and conditions, as alleged by the telecom department

New Delhi: The Central Bureau of Investigation (CBI) is investigating into a complaint by Department of Telecom (DoT) for alleged violation of Indian laws by SingTel which offered international long distance (ILD) services without a licence, reports PTI.

“With regard to action against the non-licensed entity Singapore Telecommunications (SingTel) for violation of the Telegraph Act, 1885, DoT had registered a complaint in this regard with Economic Offence Wing of CBI on 29 November 2010 and the matter is presently under investigation by CBI,” telecom minister Kapil Sibal said on 9th November, in reply to a letter from a member of Parliament.

SingTel was billing the local customers in India without having the telecom license in the country flouting the telecom norms and conditions, as alleged by the telecom department.

The issue was brought before the government by a Lok Sabha MP.

The government has already fined Rs50 crore each Bharti Airtel and Tata Communications which had an arrangement with SingTel.

The DoT complained that the SingTel was offering ILD services and it was “acquiring customers in India...” without having license thus violating the Indian Telegraph Act, 1885.

The period covered services provided between 2005 and 2009, sources said.

The penalty on Bharti Airtel and Tata Telecom was based on recommendations of an internal DoT committee.

As per the licensing norms, Indian ILD operators are authorised to provide Indian circuits to a foreign carrier (like SingTel in this case) so that they are able to provide end-to-end services to their customers in their territories.

The committee found, from submissions made by Bharti that the company had raised the invoice to SingTel at its Singapore address for the portion of circuit provided by Bharti Airtel.

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India deserves better credit rating, finance ministry tells Moody’s

“Moody’s should take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India’s sovereign rating,” a finance ministry official said after a meeting with the rating agency’s representatives

New Delhi: India on Monday told global rating agency Moody’s that it deserves higher rating, at least two notches above the present grade, on the back of improvement in basic economic parameters witnessed in the last few years, reports PTI.

“Moody’s should take a fresh look at the long-term credit strengths of the Indian economy and consider a long due credit rating upgrade for India’s sovereign rating,” a finance ministry official said after a meeting with Moody’s representatives here on Monday.

The officials, led by Department of Economic Affairs secretary R Gopalan, impressed upon Moody’s to upgrade India’s rating to ‘Baa1’, two notches above its current rating. Moody’s had last upgraded India’s rating to ‘Baa3’ (with stable outlook) in 2004. Baa3 means medium grade with moderate credit risk.

Besides, Moody’s had assigned a ‘Ba1’ with a positive outlook rating to India’s local debt.

India’s long-term growth prospects arise from a high savings and investment ratio, favourable demographics, rapid progress in infrastructure development and a stable democratic polity, the official said.

“India has low external debt to gross domestic product (GDP) ratio, high foreign exchange reserves, deep domestic capital markets and diversified domestic holdings of sovereign debt. It outperforms its ‘Baa’ peers on these indicators,” he added.

Last week, the rating firm had lowered the outlook on the Indian banking sector to negative from stable saying that slow global economic growth could impact profitability.

The move did not go down well with the government and the bankers who termed the move as unwarranted and said the Indian banks are better off than their global peers.

The official said the government is actively working towards structural reforms in the economy.

In the meeting, the finance ministry officials told Moody’s that the policy measures by the government includes fuel price hike, clearing 51% foreign direct investment (FDI) in multi-brand retail by the Committee of Secretaries (CoS) and increasing of foreign institutional investment (FII) limit in infra bonds to $25 billion among others.

They added that the government is on the path of fiscal consolidation for the last seven years, but it was interrupted by the global financial crisis in 2008.

“Indian economy has shown significant improvement in FDI flows and total exports this year. Due to uncertainties in the global financial markets, they have been muted this year, but are expected to pick up soon,” the official added.

The meeting was also attended by Chief Economic Adviser Kaushik Basu and officers from different departments in the ministry of finance, power, fertiliser and petroleum and natural gas.

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Draft cabinet note on FDI in multi-brand retail circulated

The decision on multi-brand has been delayed, as there were concerns over its impact on the neighbourhood kirana shops, which account for over 90% of $590 billion retail trade. These concerns have been voiced by several political parties and traders’ unions

New Delhi: The industry ministry has circulated a draft Cabinet note for allowing foreign direct investment (FDI) in multi-brand retail, a move which will allay industry's concern over policy paralysis, reports PTI.

The draft note circulated for inter-ministerial consultations is in line with the recommendations of the high level committee of secretaries, headed by Cabinet secretary Ajit Kumar Seth.

“The note has put in detail comments similar to those made by the Committee of Secretaries (CoS)... All the concerned departments will send their comments within two weeks,” an official in the Department of Industrial Policy and Promotion (DIPP) said. The note was circulated by DIPP last week.

He said that decision on hiking the cap of foreign direct investment in single-brand retail is also expected soon. At present, the country allows 51% FDI in single brand retail, 100% in cash and carry (wholesale) business, but bars it in multi-brand retail.

The decision on multi-brand has been delayed, as there were concerns over its impact on the neighbourhood kirana shops, which account for over 90% of $590 billion retail trade. These concerns have been voiced by several political parties and traders’ unions.

But industry leaders, including Reliance Industries’ Mukesh Ambani and Wipro’s Azim Premji have expressed their worries on the “policy paralysis” which has affected decision-making in the government, following several scams hitting it.

The CoS had recommended allowing 51% FDI in the politically-sensitive sector with several riders. These included a minimum foreign investment of $100 million.

It also recommended that at least 50% of the investment and jobs should go to rural areas and the entities with FDI should source at least 30% of their requirements from the MSME sector.

Several global retailers like Wal-Mart are waiting in the wings for a full-scale entry into India’s multi-brand retail segment.

Another condition suggested by the CoS was that half of the minimum overseas investment should be in developing back-end infrastructure like warehousing and cold storage.

Besides, the global chains should be allowed only in 36 large cities which have population of over one million.

However, the retailers should be allowed to open shop even within 10 km radius of these cities, as there are space constraints in the big townships.

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