The real story about why the Bharatiya Janata Party could not hike foreign direct investment caps in the telecommunication sector can now be told: the hike was held in abeyance because of objections by intelligence agencies.
Making this revelation, former Communication Minister Arun Shourie asked, during his speech on the Union Budget in the Rajya Sabha, whether the "Intelligence Bureau had been gracious enough to revise its view," which is why the Finance Minister P Chidambaram had promised to hike FDI caps in the sector in his Budget speech?
"I was the one who had proposed the hike in FDI caps in the telecom sector," Shourie said about his tenure as the communication minister in the last National Democratic Alliance government.
But, he said, the Intelligence Bureau filed an objection -- that the hike in FDI caps was not good for security. But they were asked to review their position, he said, and they agreed to the hike.
But then, he said, they filed another letter to the effect that security considerations did not allow an FDI caps hike beyond 49 per cent.
They also said they wanted neither FDI nor investments by foreign institutional investors on the grounds that "it would be the same management and the same country," Shourie said.
Although the Atal Bihari Vajpayee-led NDA government had hinted in the past that foreign investment and divestment in telecom was subject to security considerations, Shourie lifted the veil for the first time, on the real reason for the lack of further liberalisation in this area.
Congress MP V Narayanswamy threatened that Shourie would be subject to violation of privilege as a minister. "They (the Congress) have been threatening me for the last 30 years. I will not only say this here, but will also write about it," Shourie said.
Shourie's intervention on Monday was the clearest indication that the BJP would not support Chidambaram's proposal to hike FDI caps in the telecom, civil aviation and insurance sectors.
Shourie also said in the civil aviation sector, the finance minister had taxed the leasing of aircraft and aircraft engines so that the tax on this activity would work out to 41.8 per cent.
But while Indian Airlines and Air-India were going to lease a large number of aircraft, the private scheduled airlines had carried out that exercise. "Please also tell us who owns some of these airlines," Shourie asked.
In a caustic and stinging review of the Budget, Shourie said it was not only an exercise in sloppiness by officials -- because the Budget documents contained spelling mistakes (like Provision of Urban Amenities in Rural Areas or PURA) had become Providing Rural Amenities in Urban Areas.
"Does this mean free power in urban areas, as the Congress government is providing in some rural areas? Or does it mean that urban areas will not get water as is the case in some rural areas," the former minister asked.
He also criticised the "disappearance of numbers" from the Budget documents and said such sloppiness did not befit the finance ministry, which produced the Budget document, which was supposed to be sacrosanct.
