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November 24, 1997


DoT asked to hand over regulatory functions to TRAI

Prime Minister I K Gujral has directed the telecommunications ministry to separate the regulatory functions of the Department of Telecommunications, which will be performed by the Telecom Regulatory Authority of India.

At the second of the review meetings of the core sectors, Gujral directed DoT to swiftly work out a proposal for the restructuring of the department, and to corporatise it.

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The department has said that it hopes to submit the proposal by the end of the year.

The government has also said that the cabinet secretary has sorted out most of the pending issues relating to the Internet policy.

The prime minister was also very keen on DoT coming up with a medium-term plan for the next decade.

The ministry has also been told that the government's powers to issue directives to TRAI should be used rarely.

As and when these are exercised, the prior approval of the cabinet should be taken and it should be done in a transparent manner, the meeting was told.

During the review meeting, while discussing the performance of the PSUs under the ministry - ITI, HTL and TCIL - the prime minister suggested that the Telecom Commission encourage these companies to form a consortia or to look at the option of entering into strategic alliances.

The cabinet secretary has been directed to look into this.

The consortia could also explore the prospects of providing basic services in hilly and backward areas where there have been no bids, such as in Jammu and Kashmir and the Northeast, it has been suggested.

The cabinet secretary and the group of secretaries will now come up with concrete proposals on incentives and concessions to be given to the indigenous manufacturers of telecom equipment to help not only revive the industry but also sustain them.

The review meeting also discussed the problems relating to manufacturers supplying to the basic service providers in the private sector. The manufacturers have been seeking deemed export status. The cabinet secretary has been told to look into this and come up with proposals.

The prime minister has said that this sector should be able to face competition effectively before 2005 when, as per India's commitment to the WTO, import of equipment would be made duty free. At the meeting it was also pointed out that in the past 15 months, the department had managed to save about Rs 13 billion by following transparent policies and through vendor development.

The review meeting also took note of the poor progress in rural telephony, which is largely based on analogue systems.

The DoT has been advised to come up with proposals to replace these with digital technology, and to cover the entire rural areas before the end of the Ninth Plan period.

The ministry has also been directed that any technology, which is brought in, should be tested well in the field.

Foreign investment inflows to the telecom sector during the past two years have only been Rs 11 billion as against cumulative approvals of Rs 80 billion.

- Compiled from the Indian media

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