Dayanidhi Maran, India’s minister for communications and informatiom technology, has resigned from the coalition government after losing support from his own party, the Dravida Munnetra Kazhagam (DMK).
Maran, who was minister from 2004, has been at the helm of the IT and communications ministry at a time of booming business in both sectors. The number of mobile subscribers in India, for instance, was around 166 million at the end of March, up by 68% over a year ago.
Maran's removal is not likely to impact government policy in the area of telecom and IT, but it could slow down some decisions, said industry sources on condition of anonymity.
In a bid to boost employment for semi-skilled Indians and satisfy demands to produce locally, the minister had made it his mission to encourage multinational companies to set up manufacturing facilities in India. Nokia is one of many vendors to have launched local manufacturing operations.
Some have also made acquisitions. Last week, Vodafone received clearance from the Indian government to acquire majority stake in Indian mobile services operator Hutchison Essar.
During his tenure, Maran also tried to get multinational semiconductor companies, including Intel, to set up chip manufacturing and testing facilities in India. But his efforts were unsuccessful mainly because of a delay by the finance ministry to clear a package of incentives for the semiconductor industry. The incentives, including subsidies up to 25% of the capital expenditure during the first 10 years of a semiconductor fabrication project, were eventually announced in February this year.
In a statement, the National Association of Software and Service Companies (NASSCOM) in Delhi lauded Maran for helping India become a key market for IT outsourcing services.
"Maran was in tune with the needs of business, and we are sad to see him go," said an industry executive on condition of anonymity.
Maran told reporters in Chennai that he had quit to comply with the wishes of the DMK, which is a regional party in the Tamil Nadu state.
Maran’s position was dependant on the DMK, which is headed by his uncle, M. Karunanidhi, the chief minister of Tamil Nadu. Maran was selected by his uncle as a DMK nominee in the federal coalition government, and then urged to resign after interfering in a family fued over his uncles political successor.
It is not clear who will succeed Maran at the ministry, though it seems likely the person will be another nominee of the DMK.