Wednesday, February 2 2005 14:38 Hrs (IST) - World Time -

New Delhi: Government today (Feb 02, 2005) cleared the long discussed proposal to hike FDI cap in telecom sector to 74 per cent from the current 49 per cent, Finance Minister P Chidambaram said after Cabinet meeting.

The Cabinet cleared the proposal to hike FDI in telecom sector, Chidambaram told reporters.

The Government had announced in the last budget that FDI cap would be hiked in telecom, civil aviation and insurance sectors.

While in civil aviation sector, the FDI cap was hiked from 40 to 49 per cent as proposed, telecom sector got into rough weather with the Left parties opposing the move on security concerns.

Chidambaram also said the Cabinet has accepted the 12th Finance Commission recommendations "in toto". The Commission had submitted its report to the President on December 13, 2004 on devolution of central pool taxes to states during 2005-10.

The Cabinet also cleared the National Electricity Policy, the Finance Minister said.