Govt bows to opposition pressure; puts FDI in retail on hold

The breakthrough in the standoff came at an all-party meeting this morning where the government made the offer to put on hold the Cabinet decision to allow 51% FDI in multi-brand retail and the opposition agreed to it

New Delhi: Bowing to intense pressure from within and outside, government today announced suspension of its decision to allow foreign direct investment (FDI) in retail, bringing Parliament back to business after nine days of logjam, reports PTI.

The breakthrough in the standoff came at an all-party meeting this morning where the government made the offer to put on hold the Cabinet decision to allow 51% FDI in multi-brand retail and the opposition agreed to it.

Soon after, finance minister Pranab Mukherjee made an announcement in the Lok Sabha that the government has decided to put on hold the decision on FDI till all stakeholders were consulted.

A similar statement was made in the Rajya Sabha by commerce and industry minister Anand Sharma.

“The decision to permit 51% FDI in multi-brand retail is suspended till a consensus is developed among various stakeholders,” Mr Mukherjee said in the Lok Sabha.

He explained that the stakeholders were political parties and chief ministers without whose involvement this decision “cannot be implemented”.

Leader of the opposition Sushma Swaraj welcomed the announcement to put on hold the decision.

“Government has bowed to the wishes of the people. To bow before the will of the people is not defeat,” she said.

After the statement by the Leader of the House, Speaker Meira Kumar disallowed the adjournment motions moved by several opposition parties, including the BJP, the Left and BSP. BSP members were dissatisfied and staged a walkout.

The House then took up the Question Hour for the first time since the Winter session began on 22nd November.

In the Rajya Sabha, Mr Sharma made the statement on the suspension of the government decision on FDI in retail.

A BSP member, however, expressed opposition to the suspension of FDI in multi-brand retail and staged a walkout saying that his party wants nothing but rollback of the decision.

Sitaram Yechury (CPI-M) said the state governments should be included in the consultation process.

Earlier, at the all party meeting convened by Mr Mukherjee the opposition agreed to the government proposal of suspending the FDI in retail decision till a ‘consensus’ emerges after consultations with different stakeholders.

All the parties, including UPA allies TMC and DMK, which were opposed to the decision, agreed to support the resolution and allow the House to function.

The BJP and the Left were demanding a complete rollback but agreed to the government proposal contending that trying to build a ‘consensus’ virtually meant that the FDI decision has been put on the backburner indefinitely.

“This is a virtual rollback of the FDI decision, so we will allow the House to function. We are more keen than the government that Parliament should function,” CPI leader Gurudas Dasgupta told reporters after the meeting.


Govt to look into telecom operators’ concerns: PM

The prime minister’s statement comes in the backdrop of a recent meeting of CEOs of top telecom firms seeking his intervention to sort out differences over issues ranging from one-time spectrum charges to 3G roaming and a uniform licence fee

New Delhi: Amid telecom operators seeking lower levies and early resolution of a dispute over third generation (3G) roaming, prime minister Manmohan Singh on Wednesday said the government will look into their concerns and formulate forward-looking policies to sustain growth in the sector, reports PTI.

“I am aware of some concerns of the telecom industry regarding government policy in the telecom sector. I wish to reassure the industry of the government’s full commitment to sustainable growth, creativity and enterprise in this vitally important sector of our economy,” he said while inaugurating the India Telecom Summit here.

Mr Singh’s statement comes in the backdrop of a recent meeting of the CEOs of top telecom firms, including Bharti Airtel, Vodafone and Reliance Communications, seeking his intervention to sort out differences between them and the telecom ministry over issues ranging from one-time spectrum charges to 3G roaming and a uniform licence fee.

Noting that the two National Telecom Policies (NTPs) of 1994 and 1999 were major initiatives to propel growth in the sector, the prime minister said the government is working on the NTP-2011 with a special emphasis on affordable and quality telecom services in rural and remote areas of the country.

At the same time, he asked the industry to look ahead in giving a new sense of momentum to the sector. He also emphasised on the need for promoting domestic telecom equipment manufacturing and R&D in the sector.

The India Telecom Summit is organised jointly by the telecom ministry and industry chamber Ficci.

India’s telecom sector is one of the fastest growing in the world, he said, adding, “Keeping in view strategic and security interests, there is an urgent need to give impetus to domestic R&D and manufacturing in the telecom sector.”

“A thriving telecom manufacturing industry would have a large positive impact on many other elements of the electronics manufacturing value chain, apart from generating other benefits like additional employment,” the prime minister said.

He added that the government is committed to achieving success in this vital sector of the country’s economy.

“We will work closely with all stakeholders to build upon what we have achieved,” he said.

Telecom minister Kapil Sibal, while unveiling the draft NTP-2011 in October, had set a target for meeting 80% of the India’s telecom sector requirement for equipment through domestic manufacturing by 2020.

As per the draft NTP-2011, domestic telecom equipment demand is estimated to be of the order of Rs2.5 lakh crore by the end of 12th Five-Year Plan (2012-2017).

According to the Telecom Regulatory Authority of India (TRAI), only 12%-13% of all locally made products produced with the aid of foreign vendors in 2009-10 were used in the sector.

However, purely India-made products formed just 3% of the total market, as the Indian telecom sector is largely dependent on imports.

Speaking at the event, Mr Sibal said, “The Indian telecom sector will require an investment of Rs6.5 trillion in the next five years.”

He added that a stable policy regime and regulatory environment helped the telecom sector shine in the Indian economy.

On broadband connectivity, Mr Singh said the draft NTP-2011 envisages ‘broadband on demand’ by the year 2015 and aims to achieve 175 million connections by 2017 and 600 million by 2020, with a minimum download speed of 2 megabytes per second.

The draft NTP-2011 also envisages high speed and high quality broadband access in all village panchayats through an optical fibre network by the year 2014.

“Our government has recently approved a scheme for creation of a National Optical Fibre Network (NOFN), the cost of the initial phase of which is estimated to be about Rs20,000 crore,” he said.

An equal amount is also envisaged to be invested by the private sector to complement the NOFN infrastructure for providing access services to individual users, Mr Singh said.

Currently, the Indian telecom sector is grappling with a number of issues related to scarcity of spectrum, huge imports of telecom equipment and a lack of transparency in policies.

The draft NTP-2011 has also called for enacting a separate Spectrum Act, which will deal with all issues related to wireless (spectrum) licences and re-farming/withdrawal of allotted spectrum, as well as pricing, sharing and trading of airwaves.


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