DoT examines 'Swachh Bharat cess' on spectrum usage charge

To give Cabinet a proposal by January 15

The government is eyeing telecommunications as a potential contributor to the Swachh Bharat Kosh, the country’s biggest cleanliness fund.

At its previous meeting, the Union Cabinet asked the department of telecommunications (DoT) to examine imposing a cess on the spectrum usage charge (SUC) for the Swachh Bharat Kosh. It also asked the DoT to submit a proposal by January 15.

The SUC is a fee cellular operators pay the government for using air waves. It ranges from three per cent to eight per cent depending on the amount of spectrum a telecom operator holds.

The government is unlikely to raise much by this cess. In 2013-14, the SUC was Rs 6,814.69 crore, up from Rs 5,679.19 crore in the previous year. If the cess is set at one to two per cent, the government will receive only Rs 68.14-136.29 crore for the Swachh Bharat Kosh from the telecom sector.

Prime Minister Narendra Modi’s Swachh Bharat Abhiyaan to clean India by 2019 is expected to cost over Rs 62,000 crore.

The government, on the other hand, received Rs 2,163.45 crore as a levy for the Universal Service Obligation (USO) fund from telecom operators in 2013-14. Telecom companies pay 5 per cent of their revenue to the USO fund, which is used to improve telecommunications in villages.

The USO fund has Rs 52,722.64 crore collected since its inception in 2002-03. In the last 10 years, only Rs 15,784.4 crore have been allocated, or 30 per cent of collections so far.

According to the guidelines for Swachh Bharat Kosh, it was formed “to facilitate channelling of philanthropic contributions and Corporate Social Responsibility (CSR) funds” towards the Clean India mission.

Using the donations, the Swachh Bharat Kosh will finance building of toilets as well as repair dysfunctional toilets in rural and urban areas, elementary, secondary and senior secondary government schools, and anganwadis. It will also be used for laying water lines to toilets, training and skill development to maintain hygiene to improve sanitation.

Experts feel a cess will increase the burden on telecom companies. Hemant Joshi, partner at Deloitte Haskins & Sells, said, "The telecom sector is already under stress, and with the auctions coming up, the balance sheet of companies will be further leveraged. Servicing the debt would put a strain on cash flows and profitability. In such circumstances, the government should consider providing relief to the telecom sector instead of imposing extra burden."