Sibal says no cash to lay out defence network

Communications Minister Kapil Sibal has told Finance Minister Pranab Mukherjee his ministry would not be in a position to continue work on the optical fibre cable (OFC) network scheme meant for defence services.

Sibal said the work could not progress in view of the inadequacy of the Plan allocation and the low 2012-13 Budgetary support being fixed for the ministry. The network is important as the vacation of spectrum by the defence services is linked to the Department of Telecommunications handing over the OFC network to them for communications. According to an arrangement, the defence ministry had vacated 15 MHz of 3G spectrum and a similar amount of 2G spectrum. The telecom department to fund and build the OFC network for the defence services after this.

Defence ministry has to vacate another 10 MHz of 3G spectrum and 5 MHz of 2G after the OFC network is vacated. This spectrum could be crucial for bringing in more competition in 3G services, where there are five players.

Sibal has contended the Planning Commission has intimated to the ministry its Budget allocation would be Rs 4,800 crore, out of which Rs 4,000 crore is for Universal Services Obligation Fund and the rest for other projects.

The DoT had asked for Rs 6,767 crore, including Rs 5,000 crore for the OFC network.

Sibal told the finance ministry the allocation of Rs 800 crore is only 12 per cent of the demand of Rs 6,767 crore proposed by DoT.

However the cabinet had approved an amount of Rs 20,100 crore for this project to be completed within two years.

Sibal has made a plea that the allocation of DoT under the plan budget should be increased so that adequate funds are provided for the defence network scheme and if there is any reservation the Finance minister should take the matter to the cabinet for reversing the decision.