The golden share is meant to empower the government to veto any policy of a telecom services company that may go against the interest of national security.

The DCA has argued that there is no need to amend the Companies Act to suit the needs of just one sector. Government intervention for security reasons can be worked into the license agreement that the DoT signs with the telecom services company, officials said.

DCA's views will be incorporated in the DoT note before it is placed before the Cabinet. The DoT note, essentially, went into the question of whether to raise the foreign investment limit in telecom services companies from 49 to 74%.

A section of the UPA government, supported by the Left, had expressed the view that telecommunications was sensitive from the security standpoint and higher foreign investment limit must be allowed with extreme precaution.

The DoT, therefore, prepared a fresh note stating the conditions on which higher foreign investment may be allowed in telecom companies. One condition stated by the DoT was that the government could have a golden share in telecom companies allowing it to oversee the company policies that might impinge on national security.

The DCA has argued that company law amendments must deal only with macro reforms in law.

In the past too, the DCA has spoken against specifically legislating a golden share in the context of privatisation of public sector companies. This was mooted under the NDA regime when it was felt that after privatisation the government could retain just one share in PSUs giving it veto rights as and when needed. This was considered necessary in the proposed privatisation of oil companies.

Even then the Company Affairs department had argued that there were provisions in the Act allowing for differential voting rights, and so there was no need for a golden share to be legislated.