Telecom firms allowed to acquire foreign shares

By Our Special Correspondent

NEW DELHI, AUG. 9. The Union Cabinet has cleared a proposal allowing the Indian partner of a telecom sector licensee to acquire the share-holding of its foreign partners at the time of restructuring the company's equity. The much-awaited migration package for radio paging operators was also approved.

Accepting the recommendations made by the Group of Telecom and IT Convergence headed by the Union Finance Minister, the Cabinet also agreed to allow substitution of an existing foreign partner by another foreign partner provided the latter's experience and standing were similar to that of the outgoing partner. Such substitution would be subject to Department of Telecommunication's approval.

Similarly, the transfer of equity between the existing Indian promoters would be permitted provided the majority of Indian partners continue to hold the present share-holding for a period of five years from the date of licence agreement.

In another important move, the Cabinet also approved a migration package for radio paging operators, effective from August 1, 1999, which permits the industry to migrate to revenue sharing. For migrating city radio paging operators, the licence fee has been fixed at five per cent of the gross revenue. In case of circle radio paging, the licensee fee has also been stipulated at five per cent of the gross revenue, pending recommendations of the Telecom Regulatory Authority of India (TRAI).

Revenues for incoming calls are to be shared between paging and the basic service providers. While the customs duty on pagers has been slashed to five per cent to be on a par with cellular companies, the WPC charge of Rs. 100 a subscriber a year has been dropped.

The Cabinet meeting last evening also decided to allow Internet service providers to set up landing stations for international gateways for internet using submarine cables. This would help increase the international bandwidth connectivity for the country.

Significantly, those setting up landing stations would be permitted to share the bandwidth with others. The law does not permit such sharing of bandwidth but exception has been made in view of the huge investment involved in establishing such stations. This concession would be extended to other Internet providers using other routes for accessibility to international gateways. A proposal in this regard to bring them at par with those using submarine cables would be brought before the Cabinet soon, the Union Minister for Information Technology, Mr. Pramod Mahajan, said while briefing reporters on the meeting.

New education scheme

The Cabinet also accorded approval for the Education Guarantee Scheme and the Alternative Innovative Education Scheme aimed at drawing child dropouts in the age group of 6 to 14 back into the formal school system. The scheme will be implemented throughout the country with a plan allocation of Rs. 1965.42 crores.

Under the new scheme, the Centre-State ratio for sharing of expenditure would be a uniform 75:25. Under the present non- formal education scheme, the sharing is 90:10 for girls-only centres and 60:40 for co-ed centres.

A proposal to bring about legislation to pave the way for enforcement of an international agreement to exempt aviation turbine fuel (ATF) from sales tax in India was also given the nod.

Probe against Kalpnath

Rai dropped

Similarly, approval was accorded for the introduction of a bill to repeal the Industrial Disputes (Banking Companies) Decision Act, 1955. The Cabinet also agreed to close the probe in the sugar import scandal involving the former Union Minister, late Kalpnath Rai, in view of his death.

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