Inviting foreign entrepreneurs to invest in the fast growing telecommunications sector in India, Communications and Information Technology Minister Dayanidhi Maran said on Thursday that his government would provide the necessary policy framework for sustaining the growth momentum. He further announced that he would unveil a new broadband wireless policy soon.
Although he acknowledged that wireless broadband was the future, Maran declined to give details of the policy. "All I can say is that when India does it, it does it in style," he said. However, Maran had in the past mentioned that he would seek 4G technology for the network.
Maran, who is in New York to attend the India Investment Forum, was speaking at a function organised by the Indo-American Business Council at the Consulate General of India.
Maran reassured investors that, as in the past, the government would continue to stay on the sidelines of the communications and IT industry. "I think the credit for the growth in the IT industry does not go to the government, it goes to private entrepreneurs, the only credit the government can take is for not interfering." The government, he said, would continue in the role of a facilitator. "The market is open, it's a consumer driven market and the government is no more than a regulator."
The government, he said, however does have a role in the Universal Service Obligation Fund, through which players have to install telephone systems in rural areas.
At the same time, Maran threw his weight behind outsourcing of jobs to India, especially to the IT-based sectors, saying outsourcing was always beneficial to both countries. "Any company outsourcing to our country has its reason, the labour costs are lower and it's more cost-effective, they make a profit," he said.
He also downplayed the concern of the US government over a growing trade deficit with India. "The only country in the world that has a trade surplus with the United States, I think, is Japan, so we should be realistic and practical about that."
The Harvard-educated minister also reiterated that his ministry would be looking for investors to put money into infrastructure development for IT technologies. "It is a curse of developing countries that it's always the cities that develop first and then there is no flow down into the rural areas," he said. "In India, the potential is in the rural areas, where 70 per cent of the population lives."
Also, he said, India was adding about two million mobile phones a month. "And yet, tele-density is still about two per cent, so 98 per cent of the market still available."
At the same time, he said, India has had the advantage of being a good spectator and learning from the best practices of developed countries. "We didn't have to reinvent the wheel and we decided to buy off the shelf."
"As you know any infrastructure industry needs investment and India needs investment in the right direction."
He also said that the present Congress-led government would follow the policies and commitments set by previous governments. "We will provide a constant and stable environment for investors and India has never diverged from its commitments in the last two decades," he pointed out.
The minister also pointed out that India provided the latest technology in the communications and IT sectors. "Twelve years ago, we were stuck with old technology but the government decided to get new technologies and now we have a state-of-the-art technology."
Seeking to allay investors' fears about lack of the labour laws, rising salaries and high employee turnover in India, Maran also firmly said that the government would not involve itself in labour policy. "India has labour laws but the government will never involve itself in labour policies. This is private money, private entrepreneurs, let the market decide, we have no role to play," he said.
He also sought to soothe fears over protection of intellectual property rights laws in India, saying the government was taking it seriously. "We have already formulated a draft policy on intellectual property rights and it should be ready for implementation in a few months' time, may be 6 months."
Giving future projections, he said the number of telephone users is expected to go up to 200 million by 2007, Internet to 40 million by 2010 and broadband by 20 million.
