The Union Cabinet on Wednesday failed to take a decision on raising the foreign direct investment caps in the telecommunications, aviation and petroleum sectors following strong objections by key ministers.

The proposals have been referred to the administrative ministries for further consultation. The Cabinet would take up the issue after a month, government sources said.

The Cabinet decision followed strong objections by Civil Aviation Minister Shahnawaz Hussain and Communications Minister Arun Shourie, the sources said. Hussain said allowing foreign airlines to pick up stakes in domestic airlines would have an adverse impact on the national carriers, which were recently taken off the divestment roster.

On the other hand, the communication ministry went back to its earlier stance that raising the cap in the telecommunications sector from 49 per cent to 74 per cent would endanger national security.

Though Parliamentary Affairs Minister Sushma Swaraj said at a press briefing after the Cabinet meeting that the FDI proposals were not discussed on Wednesday, the sources said senior ministers like L K Advani, Murli Manohar Joshi, Sharad Yadav, Balasaheb Vikhe Patil and Swaraj backed the view that raising the FDI caps should be reviewed in the emerging political and global scenario.

An increase in the FDI caps would not necessarily result in a massive inflow of foreign investment, it was felt.

The ministers said in the backdrop of the recommendation that all foreign investment proposals be screened on security grounds, the move to hike the FDI caps in core sectors like telecommunications and aviation was not desirable.

Finance Minister Jaswant Singh, who was instrumental in pushing for a liberalised FDI regime proposed by the N K Singh committee on foreign investment, did not find many takers.

Swaraj argued that if several sectors were to be thrown open to foreign capital, the government might as well give up the idea of having public sector units, the sources said.

The FDI proposals have been hanging fire for several months. This is the second time the Cabinet failed to take a decision even after the group of ministers on foreign investment cleared the proposals on February 27.