The Supreme Court judgment on cancellation of 122 second-generation licenses for mobile-phone services issued in 2008, would not have any negative impact on inflows of foreign investments, Veerappa Moily, Union corporate affairs minister, said on Monday.
"Everybody should know that every country has its own regulations. If there is a case of any distribution of a national asset, that is contrary to the rule of law of a country, then one should know the consequences. Any honest dealing will be rewarded and there will be problem if there is dishonesty," Moily told reporters on the sidelines of Federation of Indian Chambers of Commerce and Industry.
Quashing the licences, the apex court on Thursday termed the government’s sale of the licenses on a first-come-first-serve basis, as an “arbitrary and unconstitutional exercise,” which facilitated corruption.
“I don't think this will have larger impact on foreign investments. There are so many investments done, this is only a small segment. There are large segments which are unaffected. Any honest business done by the foreign business houses will be rewarded."” said Moily. The affected companies whose licences were cancelled include Uninor (joint venture between Unitech and Telenor of Norway), Sistema-Shyam (joint venture between Shyam Telecom and Sistema of Russia), Videocon, Loop Telecom, Idea Cellular, Etisalat DB (joint venture between DB Realty and Etisalat of UAE) among others.
National Competition Policy and Company Bill in Budget session
The Cabinet is likely to approve a National Competition Policy by March 2012, which is expected to streamline supply and demand constraints.
“The competition policy is going to be the second big financial reform in the country, after the reforms of 1991. This will be approved by the Cabinet by March 2012,” said Moily.
Recently the government constituted a committee under the chairmanship of Dhanendra Kumar, former chairman of Competition Commission of India (CCI) to prepare a report on the new policy.
“We have a competition law that came into existence in 2009. We don't have a national competition policy, which is quite important. The competition law is just a segment of that larger canvas of a national competition policy,” said Moily.
Meanwhile, the government has also asked the Dhanendra Kumar committee to bring changes in the prevailing Competition Act in tune with the new policy. The changes in the Act are likely to be placed in the Budget session of Parliament.
“Competition policy in the US brought down the prices of petroleum prices in the US by 50 per cent. It is an excellent measure to combat inflation. The policy will gel supply and demand, and will give right price to the consumer,” said Moily. The Parliamentary Standing Committee will take a call on the Companies Bill, 2011, within a month after a limited review.
The Bill was referred to the Standing Committee in December after the BJP wanted further scrutiny before it being placed in Parliament. The government might place the Bill in Budget Session of Parliament, said Moily. Also, the new accounting standards for corporates, or International Financial Reporting Standards( IFRS) would be fully introduced latest by 2015, he added.
