Parliament panel on IT wants DoT to increase revenue

Government earned little from telecom, apart from 3G, BWA auction

The telecom sector contributed a total Rs 1.87 lakh crore to the government during the 11th Five-Year Plan period (2007-12). But, this was not enough.

Parliament’s standing committee on information technology has asked the department of telecommunications (DoT) to take initiatives to increase revenue receipts, as most of its earnings during the 11th Plan came from the auction of third generation (3G) and broadband wireless access (BWA) spectrum in 2010-11 and the one-time fee levied on telecom operators in 2007-08.

In 2010-11, the government had earned Rs 1.06 lakh crore from the auction of 3G and BWA spectrum and Rs 12,499 crore came from the one-time fee levied on the telecom operators in 2007-08.

During the 11th Plan, DoT earned Rs 50,222 crore as licence fee and Rs 18,918 crore as spectrum charges. But, if compared on year-on-year changes, the increase was marginal.
 

GOVERNMENT EARNINGS FROM TELECOM
	2007-08	2008-09	2009-10	2010-11	2011-12	Total
Licence fees	8,855.25	9,510.83	9,778.52	10,286.43	11,790.93	50,221.96
Spectrum charges	3,056.58	3,455.27	3,809.54	3,434.94	5,161.96	18,918.29
Licence fee — one- time entry fee	12,499	0	0	0	0	12,499.43
Spectrum auction revenue	0	0	0	1,06,264.73	0	1,06,264.73
Grand total						1,87,904
In Rs cr                                                                                          Source: Standing committee report

Pranab Mukherjee, while presenting this year’s budget, had announced that the government would raise Rs 40,000 crore (the target was later lowered to Rs 30,000 crore) from spectrum auction.

In reality, the first round of second generation (2G) spectrum auction has fetched the government just Rs 1,706 crore so far this financial year.

It is, however, expecting Rs 20,000 crore in the second round, but telecom companies need to pay only 33 per cent of the bid amount in the current year.

That would keep the total collections this year at around Rs 10,000 crore, unless telecom companies decide to pay upfront.

According to the Telecom Regulatory Authority of India, the government’s earning from licence fees dropped 6.3 per cent to Rs 2,301 crore during the quarter ended September, against Rs 2,456 crore in the previous quarter. Spectrum fees dropped 0.45 per cent in the period.