CII asks Govt to rationalize telecom levies

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CII asks Govt to rationalize telecom levies

The five point plan includes recommendation to boost the growth of telecom and broadband in the country

Wednesday, June 24, 2009

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NEW DELHI, INDIA: Confederation of Indian Industry (CII) requested the Government of India to rationalize the levies and taxes paid by the telecom sector in the country.

The rationalization of taxation and levies is must for affordable tele services as the taxes and levies paid by the Indian telecom sector in the form of license fee, spectrum charges, ADC, service tax etc, are the highest when compared to other Asian economies, it said in a five-point recommendations on Telecom and Broadband submitted to A Raja, Minister for Communications and Information Technology, on Tuesday.

The recommendations said that the taxes and levies amount to 24-34 per cent of the AGR. CII has requested for reduction in two phases: phase I – 22 per cent and Phase II – 13-15 per cent.

Manoj Kohli, chairman, CII National Committee on Telecom & Broadband and Jt. MD and CEO of Bharti Airtel Ltd in the CII representation said that the Industry is fully prepared to take the onus of being Global No. 1 in Telecom by 2014-15 by being an active participant of second phase of Bharat Nirman.

The other points in the agenda included roadmap for accelerating inclusive, equitable and sustainable growth of broadband in India to reach 695 million users by 2014, including 309 million in rural India, as per CII Broadband Study 'India 2009-2014: Broadband Roadmap for Inclusive Growth'.

CII has recommended providing autonomy to USO (Universal Services Obligation) Fund administrator for creation of broadband infrastructure for equitable use of all and to strengthen the infrastructure using funds from the USO Fund.

"Broadband connectivity will considerably enhance the quality of life with useful and critical applications such as e-governance, e-education and e-health and accordingly, Government should complete its 27 NeGP mission mode projects in a phased and time-bound manner", the CII representation said.

CII also suggested the growth of Wireless Broadband through 3G & BWA and recommended planned auctions of 3G and BWA spectrum as per already notified guidelines to be completed expeditiously so as to roll out these services by mid 2010.

CII further said that 'Maximum possible spectrum should be allotted in 2.1 GHz, 2.3 GHz, 2.5 GHz bands'.

The confederation suggested that "Telecom Infrastructure needs to be developed as priority for rural reach and to achieve same, Government needs to address issues related to tower construction approvals, tower sharing and standardization, providing back haul for broadband connectivity to all villages, electricity power to be made adequately available at reasonable price, and pragmatic approach for collection and usage of USO Fund, with a sun-set clause over the next 3 years".

CII has recommended that electricity board connection should be made available as public utility connection in urban/semi urban areas and at agriculture rate (or at least at par with IT industry) in rural areas.

CII also presented the Spectrum Roadmap for 1 billion wireless users in India by 2014-15.

CII also discussed during the meeting with Minister that there is a big potential in India for telecom manufacturing and creation of own IT & technologies and the government needs to provide thrust.

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