In yet another attempt to attract foreign capital into India and stem the fall of the rupee, the country's central bank, the Reserve Bank of India or RBI on Wednesday allowed external commercial borrowings, or ECB, up to $500 million (Rs2,465 crore) per year under the automatic route for rupee or foreign currency expenditure by local firms.

The Indian government on 23 September raised the overseas borrowing limit to finance their rupee expenditure fivefold to $500 million in a move to provide easier access to funds for infrastructure firms.

This has now been extended to firms across sectors, and put in the so-called automatic route, making the approval of the regulator for such loans automatic and cutting down the procedural delays.

The new norms take effect immediately.RBI has also removed the seven-year minimum average maturity requirement for ECBs of more than $100 million by infrastructure companies.
RBI also allowed ECBs for making payments for 3G spectrum licences, a move that will help telecom companies.

Liberalizing the procedure for bringing ECB proceeds into India, RBI has allowed borrowers to keep the money with Indian banks abroad, or remit these funds to India for credit to their rupee accounts.

In A development that could completely liberalise mobile commerce, the department of telecommunication (DoT) will soon write to the Reserve Bank of India (RBI) seeking guidance on linking telephone networks with banking services.

While the RBI recently announced certain guidelines for mobile banking in India, it only provides for a few basic banking services which can be undertaken through mobile phones. The new DoT move will allow consumers to virtually use mobile phone as a debit or credit card.

Sources told SundayET that the ministry would seek RBI's consultation to provide fullfledged mobile banking services to the customers, in line with discussion held between the 13th Finance Commission team and DoT officials on September 18, 2008. According to a senior DoT official, the ministry has so far not taken any initiative on linking telephone networks with banking services, but is keen on it as it will generate revenues, in addition to giving more value to telephone customers. "These services can increase the share of value-added services from the existing 7-8% of total revenues from the sector to almost about 25% which is the case in the developed countries," DoT said to the Commission's team. SundayET has a copy of the discussion paper prepared by DoT.

Explaining how the new initiative would help Indian consumers, Romal Shetty, director at KPMG India, said it would change the entire face of banking in the country. "So far, consumers can make only a few basic transactions through the mobile, but this will mean using your mobile as your credit or debit card. All you have to do is to send a message to make a payment," he said.

The Minister of State for Communications and IT, Mr. Jyotiraditya Scindia, has called for collaboration between the Government and the private sector to empower students with technology enabled education. He was launching Intel's 5th World Ahead Community Program in the country in Shivpuri district of Madhya Pradesh today. Mr Scindia said, this is necessary to develop citizen welfare and advance the social and economic status of India. The Minister underlined the power of the Internet to make a meaningful difference in people's lives by providing access to vast resources of learning, creating opportunities for better employment, and enhancing healthcare facilities for citizens.

The Intel World Ahead Community Program involves the adoption of Information and Communication Technologies in one place, by providing access to PCs, enabling broadband Internet connectivity, educating teachers and students on the application of technology in day-to-day life, empowering citizens to employment and entrepreneurship opportunities, and access to better healthcare. Intel has already established four other World Ahead communities in Baramati in Maharashtra; Tindivanam in Tamil Nadu; Chandni Chowk in Delhi; and Chhindwara in Madhya Pradesh.

Intel also launched its teacher training program called Intel® Teach, aimed at training 1000 teachers in Shivpuri on applying technology in education, and also announced a donation of 50 PCs for the benefit of over 14 schools in the district. Intel has already trained over 9,02,500 teachers under its Intel Teach initiative, demonstrated the capabilities of school health monitoring and remote diagnostics solutions and has reached out to nearly 40,000 students in India under the Intel Learn Program.

All interested firms have been asked to submit their bids by September 25.

All firms bidding to be the agency to conduct the e-auction will also have to declare their shareholding pattern -- both Indian and foreign (if any).

Besides, the DoT has said that potential bidders cannot have more than 10% stake in any telecom or internet service provider in India. The guidelines also add that only those companies who have a paid up capital of Rs 2.5 crore and a networth of at least Rs 10 crore and has conducted similar auctions before will be eligible to apply.

The DoT has said that the auctions of third generation radio frequencies for telcos will be held within three months of selecting the agency to conduct the same. This implies, if the agency in selected by October, the auctions must be conducted before January, 2009.

Following the first round of auctions, the agency will also have to conduct subsequent auctions as and when radio frequencies are available, the DoT added. All bidders must also quote their fee for conducting the entire auction process. The fee will be the per cent of the of the total revenues they raise from the auction.

"All applicants that meet the eligibility criteria will have to make a presentation before the evaluation committee demonstrating their experience and capacity to conduct the auction," DoT said in a communication on its website.

The department of telecom (DoT) has started discussions on allowing telcos to share spectrum, the radio frequencies on which all mobile services operate.

In a meeting with the minister of state for communication and IT, Jyotiraditya Scindia, earlier this week, the DoT officials listed out the pros and cons of becoming the first country in the world to allow spectrum sharing.

In an internal note that was presented to Mr Scindia the DoT said that spectrum sharing would help telcos use radio frequencies in a `more economic and efficient manner'.

While talking exclusively with SundayET, minister of state for communications & information technology Jyotiraditya Scindia agreed that finance minister P Chidambaram had every right to clarify things. "We will raise a huge amount of money through this auction, and the money is not going to be with the telecom ministry. Whatever amount we raise, it will go to the consolidated fund of India, which is very much under the finance ministry. They (finance ministry) have every right to raise questions if they have any concern. We will answer their queries," Mr Scindia said.

The minister, however, said that there was no question of being non-transparent in the 3G auction process. "We have prepared the guidelines in the most transparent manner and are ready to answer any question that the finance ministry might have," Mr Scindia further said.

Earlier, the finance ministry had raised objections to the ministry of communications' formal announcement of auction process for services that will enable operators to provide facilities such as fast Internet access, video calls, games and a host of multimedia content on cell phones. The finmin officials argued it had not been consulted before the guidelines were issued, a mandatory step for government policies with fiscal implications.

There was a feud between the communications ministry and telecom regulator TRAI over the reserve price for pan-India 3G spectrum auction. The ministry has now doubled it to Rs 2,260 crore. The finance ministry's opposition, however, is because of the breach of protocol.

"As of now we have sufficient spectrum. Vacating the spectrum is an on going process and we have been assured by the defence ministry that they will vacate the spectrum as and when needed," said Mr Scindia.

The defence forces have nearly 60 MHz of spectrum that is not being used. With India adding 8-10 million new mobile telephone subscribers to the network each month, radio spectrum has become scarce.

"The spectrum is not enough and that is one reason why we face so much congestion in the network. There are new players who have been allocated licences but cannot roll out services till the time they get spectrum," said Romal Shetty, director telecom, KPMG.

The ministry of defence and the DoT are looking at some sort of a settlement for the issue. The DoT hopes to secure at least 42.5 MHz, of the 45 MHz promised, from the Air Force.

DoT had sought approval from the Cabinet Committee on Economic Affairs (CCEA) for developing an alternative communication network for the Indian Air Force. The alternative communication link would cost the DoT Rs 1,077.16 crore.

The defence ministry had said that no spectrum will be vacated until an alternative fibre optic communication network is set up for the armed forces. The DoT and other agencies of the ministry are working together to come out with funds that will help in creating an alternative platform for the defence forces. DoT had made a request for additional funds from the Union government for the alternative network project.

New players such as STel Ltd, Shyam Telelink Ltd, Swan Telecom Ltd, Loop Telecom, Spice Communications, Tata Teleservices, Unitech and Videocon have been given the licences but there is still no talks of allocating spectrum.

The portal, developed by the Centre for Development of Advanced Computing (C-DAC), is available in six languages - Hindi, Telugu, Tamil, Marathi, Bengali and English.

In her address, the President said it should be further expanded to include other Indian languages for wider relevance and acceptance.

Observing that India was in the process of transformation to a Knowledge Society, she said information and communication technology (ICT), no doubt, had played a pivotal role in enabling this transformation.

India relied on its talented work force to generate a knowledge revolution. ICT had had a positive influence in almost all spheres of our everyday life and the nation's economy at large.

The function was attended by Communications and IT Minister A Raja and Minister of State Jyotiraditya Scindia.

Ms Patil said India Development Gateway initiative had the potential to address the critical issue of bridging information gaps. "I strongly believe that our endeavour should be to make information through knowledge portals available to all sectors of the economy and social life as well as to all sections of society." The portal had thrown open a window of opportunity to the rural development sector as a whole, in which relevant and credible information specific to rural development had been put together.

He further added that the SWAN Scheme has been approved at a total cost of Rs. 3,334 crores and the under the Scheme the DIT is currently overseeing the establishment of a State Wide Area Network with 2 Mbps connectivity, connecting the State Headquarters, District Headquarters and over 6,000 Blocks across the country. This Scheme once completed would provide connectivity to over 1,00,000 Government offices all across the country.

The DIT is also implementing the Common Service Centre (CSC) Scheme through which 1,00,000 broadband internet enabled kiosks are being established in rural areas of the country. These CSCs are to provide Government and private services at the doorstep of the citizen, which is the vision of the NeGP. More than 8,000 of these kiosks have already been established through a PPP model and it is expected that more than 60,000 CSCs would be established before the end of this financial year, with the balance expected to be in operation in the next fiscal, said the Minister.

He also informed that a Scheme for establishment of State Data Centres (SDC) has also been approved recently as well as a Scheme for Capacity Building of State Governments to help them better manage the implementation of e governance projects in the States. The SWANs, CSCs and the SDCs once established, would provide the infrastructure which would allow for any time anywhere delivery of Government services to citizens.

To facilitate the implementation of the Plan, a body under the Chairmanship of the Prime Minister has been constituted to prescribe deliverables and milestones. An advisory body under the chairmanship of MOCIT advises on the implementation of the Plan. Whereas an Apex Committee under the Chairmanship of Cabinet Secretary has also been set up to provide strategic direction to the NeGP. These bodies are serviced by the DIT. The DIT has also set up a professional Programme Management Unit (PMU) to assist in programme monitoring and strategic planning. Under the capacity building guidelines issued by the DIT, a similar institutional framework for the States has been recommended, in fact Apex committees under the Chairmanship of the Chief Secretaries have been set up in almost all States.

The meeting was also attended by MOS for Communication & IT Shri Jyotiraditya M. Scindia.

The following members have attended the meeting : Ms. Sushila Kerketta, INC; Shri Narayan Chandra Borkataky, BJP; Shri Rao Saheb Patil Danve, BJP; Dr. Laxminarayan Pandey, BJP; Smt. Sangeeta Kumari Singh Deo, BJP; Shri D.B. Patil, BJP; Shri Vanialzawma, MNF; Shri Sanat Kumar Mandal, RSP; Shri Suresh Kurup, CPI(M); Shri Sita Ram Yadav, RJD; Shri Munshiram, RLD; Shri N.N. Krishnadas, CPI(M); Shri Ramswaroop Prasad, JD(U); Kunwar Rewati Raman Singh, SP; and Shri M. Shivanna, JD(S) - all from Lok Sabha.

Putting their services online should allow governments to serve their citizens much more effectively. But despite heavy spending, progress has been patchy, says Edward Lucas

AT 6.15AM on a December morning the streets of central London are cold, dark and offer little for the omnipresent CCTV cameras to record. But outside the Indian High Commission 109 people are sleepily waiting for the visa section to open. David Robb and his friend are first in line, huddled in sleeping bags behind a windbreak since 3am, to ensure visas for a planned holiday in Goa. Nearly all his fellow-sufferers in the queue have booked their air tickets and sometimes their entire holiday on the internet, paying with a credit card. Those electronic signals move information almost at the speed of light--billions of times faster than the shuffling, shivering humans in the visa queue. "In this day and age? Bleeding disgusting," is Mr Robb's pithy comment on the Indian visa system.

Compare that with another queue forming in Grosvenor Square, a brisk 20-minute walk across London. Procedures at America's fortress-like embassy are even more stringent, requiring all visa applicants to present themselves in person, with no postal option. But here the procedure is backed up by intelligent use of electrons. Applications must be submitted online, accompanied by a non-refundable $131, paid electronically. In return, the applicant receives a confirmation e-mail, which includes a barcode with the information from the completed form. Printed out, it is also the entry ticket to the embassy, controlling outsiders' access to one of the main terrorist targets in London.

Inside, the barcode is scanned, putting the data onto the visa officer's computer. Fingerprints are digitally recorded. The visa itself, collected shortly afterwards, has banknote-style security features, plus a scanned picture of the applicant.

India Post is incurring huge losses. How do you plan to make it a profitable venture?
The losses of India Post are on account of huge pension liabilities and if the finance ministry relieves the Department of Post ( DoP) of this burden, it would become a profitable venture. I am planning to write to the finance minister regarding this.

Further, I have charted out a three-pronged strategy to bring the department out of red, even if the finance ministry does not agree to take away the whole pension burden from DoP. The plan includes India Post's diversification into newer areas like logistics and retail. The department is also exploring the option of using the vast network of post offices across the country for several other revenue-generating ventures.

Does India Post plan to tie up with private retail chains to take its retail dreams forward?

Retail is one of the areas which are high on our agenda. This would help the department in tiding over its present financial difficulties. We have constituted a separate business development unit (BDU) to look into the possibility of tying up with private players for the retail foray.

Private courier companies that are considered to be more efficient are posing a tough challenge to India Post. How can India Post regain its lost status?

Courier companies do not cater to the masses living in villages. Post office is the only mode of communication for many villages in the interior parts of the country. We need to take the benefits of the communication revolution to the villages, and convergence is the keyword here. E-mail facilities would soon become available in every post office across the country. Also, each rural post office would be housing common service centres to help the rural folks, particularly farmers.

We are also planning to install a new mail tracking mechanism for all types of mails to address the problem of loss or inordinate delay in the delivery of ordinary mails. Convergence of information technology (IT), telecom and post would become very helpful here. That is why this ministry is neither the ministry of post nor telecom or IT alone. We look at communication as a whole.

How does India Post plan to fund its expansion plans ?
India Post gets revenue from its core service of mailing, parcels and money-orders. Also, it gets money through the post office saving banks scheme. We are also considering to tap the vast real-estate resources of the department through strategic commercial use. A special purpose vehicle (SPV) would be formed to look at the possibility of commercially exploiting the resources. DoP has surplus land in prime locations of all the major metros, including Delhi and Mumbai.

In Delhi, it has properties in locations like Connaught Place and Chanakya Puri, among others, while in Mumbai, it has several plots, including one at Nariman Point. The SPV would be a 100% subsidiary of the department and would be responsible for planning and execution of commercial utilisation of vacant plots of land and buildings.

Also, letting out the post office property for works like railway reservation and payment of all kinds of bills would help India Post earn a good revenue.

Recent data show that post office saving bank schemes now do not attract customers as they used to. What are your plans to address this?