Telecom FDI hike flayed

The Left parties have opposed the Cabinet's decision to raise the foreign direct investment (FDI) limit in the telecom sector from 49 per cent to 74 per cent, questioning if the government has adequately met the security considerations required.

The decision comes after a series of consultations between the Left parties and the government, which continued over three months and has seen three notes being exchanged between the two sides. Left leaders will meet tomorrow to decide the future course of action on the issue.

The Left's opposition to the issue has been hinging on the security aspect of allowing 74 per cent FDI in the sector, through issues of ownership and management control did figure in their initial arguments.

In their second note to the government, the Left brought up the issue of teledensity and rural telephony in a big way. These arguments were once again repeated today while stating their opposition to the cabinet clearance.

CPI(M) politburo member Sitaram Yechury said he was not sure whether the government had met all the security considerations necessary for clearing the move.

"We have not yet studied the note given by the Finance Minister today after the Cabinet," he said.

But, he said while the finance minister had satisfied himself and the government about the security issue, it was not the Left's turn to see if all the points mentioned by them had been addressed. The other issue he highlighted was that of teledensity.

"The justification for the decision as being necessary to increase the tele density in the country is untenable. The tele density has gone up nearly five-fold in the last five years," a statement of the CPI(M) states.

Quoting from the note, Yechury said major telecom players in the country both private and public had achieved this growth in the last five years with out any FDI.

Hence the argument that these telecom players needed FDI to expand their services further did not convince the Left, Yechury said.

While the CPI(M) "opposed" the move, the CPI was a far less strident ion its opposition. " We are opposed to decision, but if the government goes ahead with it what can we do?" said CPI General Secretary AB Bardhan.

Though the CPI too has been opposing the FDI hike, as it has been doing with other economic policy issues, there is a perception within the Left that the party is more vulnerable to being convinced by the finance minister.

A senior CPI leader said that the Finance Minister had, in fact, told the Left at a meeting about a month ago that the home ministry and the defence ministry had cleared the security considerations for the telecom FDI hike.

This meeting is what the finance minister might have in mind when he talks of having taken the Left on board about the decision, Left sources pointed out.

Of the other Left parties, the Revolutionary Socialist party (RSP) came out very strongly against the decision. Leader Abani Roy said it seem that the that decision proved that "the government did not require the Left support."

He said his party's support to the Government has only "conditional" and that after the RSP's party Congress between 17-20 February, the party would decide on whether to continue support to the United Progressive Alliance (UPA) government.

The BJP sided with the Left in arguing that the security considerations could not have been adequetly addressed by the Government, considering that the NDA Government could not push the hike because of the very same reason.