NEW DELHI, March 16: The national agenda of the BJP-led coalition at the centre has proposed a major shake-up in the telecom sector including repeal of the Indian Telegraph Act, 1885, strengthening the TRAI, converting the DoT into a company called India Telecom and discouraging foreign majority holding in telecom companies.The promises in the draft national agenda on this sector, which is likely to be released on Wednesday, has largely drawn from the stated BJP policy on infrastructure with emphasis on speedy implementation and world class performance. A senior BJP leader said the new government will set upon a course to dramatically increase the number of phone lines in villages and satisfy the more demanding audio, video and data communications needs for business and individual use.
Though under the power-sharing arrangement in the coalition, the communications ministry is likely to be presided over by a non-BJP minister, the national agenda is sure to lay down specific time-bound guidelines for thesector. Prime minister Atal Behari Vajpayee is said to be particularly keen on ushering in a new communication era in infrastructure which he feels is the backbone of economic recovery. The BJP has also promised to make India a world leader in information technology. The draft agenda says, "The government role will be that of a regulator and this requires the strengthening of the Telecom Regulatory Authority of India."
The party is not happy with the acrimonious battles between the TRAI and the DoT on the one hand and the private sector on the other. It feels that much of the discord is the result of confusion on the dual role of the telecom commission both as a service provider and policy formulator. The TRAI is certain to get more teeth and a well-defined authority and a full team under the new dispensation. "The DoT will be converted into a company called India Telecom. To expedite the shift from a government department to a profit-making company, the government will divest a portion of its shareholdingin the company.
The government, however, will not discriminate between the public sector companies and the new private companies coming into operation," the party document said. The coalition will promise to remove all restrictions - inter-circle, long distance and international calls - to encourage competition. This will be a welcome positive incentive for the private operators who are crying foul of the interconnect regulations.
Simultaneously, it is proposed to ensure maximum returns from the companies that it already owns like India Telecom, VSNL, ITI and MTNL. To make these telecom companies in the public sector competitive, they will be given the freedom to hire the best people and pay them market salaries, the draft agenda notes. The new thinking is that the Indian Telegraph Act, 1885, needed to be replaced with a new legislation that takes into account the advances in the post-independent India and reflect its future concerns and status in the telecom sector. It is felt that India was expected tohave the sixth largest number of telephones in the world by the turn of the century and that it must have a telecom manufacturing industry to match this status.
Telecom-equipment manufacturing was opened to the private sector in 1991 and this has led to India emerging as one of the top manufacturers in this field. However, the duty structure which gives concessions to the import of these has led to dumping and stagnation of the domestic industry. The new government plans to remove this anomaly in favour of the domestic industry.
The government will encourage the creation of world-class telecom manufacturing in India through indigenously developed technology, the document says. The new FDI policy for this sector will, however, discourage foreign majority holding in telecom companies.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
