Govt. meeting to discuss FDI in DTH, among other sectors, deferred

NEW DELHI: DTH has always been a controversial issue in India, if one takes into account the much-hyped press conference by Star in Delhi on DTH in the late 1990s that subsequently led to the government banning all KU-band services in the country till a policy decision reversed the order. Albeit with severe restrictions.

Today, a government meet on raising FDI in various sectors, including DTH, was deferred.

It may be pertinent to mention here that the Subhash Chandra-promoted ASC Enterprises and Space TV, through which Star has applied for a licence, are expecting an initial go-ahead from the information and broadcasting ministry soon for a DTH licence. The files concerned, according to government sources, are lying with I&B minister Ravi Shankar Prasad for his signatures, subsequent to other clearances obtained from other government agencies.

Coming back to the meeting on FDI today, a group of ministers of the Indian government, slated to meet today afternoon to consider proposals to increase the foreign investment ceilings in insurance, telecommunications (DTH has been categorised under telecom infrastructure) and aviation sectors did not meet.

"The meeting has been deferred," a senior government official said, without giving any reasons for the deferment.

Had the GoM met today, observers feel, it would have helped Prasad to expedite some files related to DTH.

As reported by indiantelevision earlier, the NK Singh panel set up to review steps to attract more FDI into India had suggested last year, amongst other things, that the FDI cap in a DTH venture should be raised from 20 to 49 per cent.

However, former I&B minister Sushma Swaraj, while ruling out any review of the existing policy guideline, had said in October during an interaction with journalists that her ministry has not accepted the Singh panel's suggestion on raising FDI cap in DTH.

The GoM's decisions was to be sent for Cabinet approval next week had it met today, after which they were to be incorporated in the reforms package Finance Minister Jaswant Singh is expected to announce in the Budget on 28 February.

Opinion has been divided over the NK Singh panel report. For example, a senior government official was quoted in the media yesterday as saying that though the aviation ministry had recommended foreign airlines be barred from investing in local ones, the ministerial group was set to consider the recommendation of a committee headed by Planning Commission member NK Singh to allow foreign participation. In fact, the committee's report would be taken up in its entirety.

The newspaper quoted a government source saying some ministries had opposed changing the sector caps on foreign investment. But the ministerial group is expected to overrule them, largely at the instance of the prime minister's office and the finance minister.

The proposal to raise the foreign investment ceiling in telecommunications from 49 per cent to 74 per cent will, if it goes through, make several companies like Hutchison Whampoa and Singapore Telecom review their investment plans in India.

It could shake out the industry, helping local players wanting to get out of their not-too-profitable ventures.

The GoM is also expected to hike the foreign investment limit in insurance from 26 per cent to 49 per cent, despite opposition from political parties, including some ruling National Democratic Alliance partners, the newspaper reported today.

If the proposals are made a part of the Budget, the parliamentary session might see fierce debate. But the prime minister's office and the finance ministry feel this could be their best chance to give reforms a push.

Opening up (in per cent) Sector    Existing FDI Cap    NK Singh proposal

Petroleum refining    



Oil marketing    






Civil Aviation    



Basic & Mobile telecom    



Private Banking    






Broadcasting - DTH    



Real Estate    


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