Refusing to buy Finance Minister P. Chidambaram’s arguments on increasing FDI cap in the telecom sector, the Left has sent a nine-page note in which they have highlighted their earlier objections in greater detail.It may be recalled that in response to the Left’s initial objections, the Finance Minister himself had handed over a long note refuting every single argument put forward by the Left. Now the Left has primarily picked up some key issues like strategic interests and how other countries don’t allow FDI beyond a point in this key sector to justify its case.The Left has said that with all the technological advancement and the growing reach of cellphones, it would be wrong to assume that the strategic significance has diminished under any circumstances.According to the note, even in 2003, when the NDA Government ‘‘and its Minister, Arun Shourie, made an attempt to remove FDI restrictions in telecom (February 2003), the security agencies — the Intelligence Bureau and the Home Ministry — had suggested that the increase of FDI (cap) from 49 to 74 per cent should not be considered, as it will mean management control getting into foreign hands’’. The note adds: ‘‘We see no reason for overruling their concerns’’.On Chidambaram’s argument that other South Asian nations do not have FDI restrictions, the Left has insisted that the ‘‘security concerns of Pakistan and India are on a different level. India’s concerns are much wider.’’The Left’s second major counter-argument is on the issue of ‘‘restrictions of foreign ownership in other countries’’. Chidambaram had objected to the earlier list provided by the Left, citing the names of countries that don’t allow more than 49 per cent FDI in telecom. In a counter-list, Chidambaram had named innumerable other countries which do allow a large percentage of foreign investment.The Left’s argument: ‘‘The issue here is not tat some countries allow unrestricted FDIs. The more important issue is why do countries such as the US (and even the Finance Ministry accepts that in mobile telephony, the US restricts foreign ownership) restrict foreign ownership at all.’’The note refers to the Chinese experience. It says: ‘‘China has more than 300 million subscribers against approximately 45 million in India at present and accounts for 30 per cent of the world’s net addition in subscribers. And this growth has taken place without any FDI in areas such as mobile, fixed telephony or long distance services.’’
