A ministerial panel on Thursday urged the government to raise foreign direct investment caps in a host of sectors including telecom, petroleum and civil aviation as part of a move to liberalise the economy.

A senior government official, who did not want to be named, told reporters the panel recommended raising the FDI limit in the telecom sector to 74 per cent from 49 per cent and increasing the FDI ceiling in civil aviation to 49 per cent from 40 per cent.

"A group of ministers today (Thursday) met to consider proposals with regard to raising sectoral caps for various sectors," the official said.

"The recommendations will be placed before the cabinet. It is just a step away from becoming a policy."

The panel also said that foreign airlines should be allowed to hold 49 per cent stake in domestic carriers. The official said the panel did not discuss the FDI limit in the banking sector.