National Telecom Policy | DoT vs Ministries
The Union Cabinet did not approve the National Telecom Policy when it met last week as it wanted the communications ministry to address the concerns raised by different government departments on the new rules. The Communications ministry has now moved a supplementary Cabinet note citing its response to the objections of each of the ministries, officials aware of the developments.
The DoT has reiterated to the department of economic affairs that primary goal of the new framework would be to maximize public good by making available affordable, reliable and secure telecom and broadband services and added that direct revenue generalization would continue to be a secondary objective. At the same time, it has also clarified that all future licences and spectrum would only be made available through market related processes.
It has also assured the department of economic affairs that it would seek fresh Cabinet approvals before implementing proposals in the new policy that have financial implications such as plans to offer domestic telecom equipment makers loans for five-year period on subsidized terms in addition to a 10-year income tax holiday and concessions on excise duty and VAT.
The DoT has also agreed to seek separate approvals for other policy initiatives including the proposal to set up a Rs 10,000crore telecom R&D fund and a Rs 3,000 crore mobile equipment manufacturing fund to support local hardware manufacturers.
Apart from objecting to clauses in the policy that called for large financial outlays, the economic affairs department had also opposed the new framework considering revenue generation as a secondary objective.
The DoT has told the Commerce Ministry that its plans to give preferential access and tax cuts to indigenously manufactured telecoms equipment, and also mandate that mobile phone companies buy a bulk of the networks hardware from domestic companies, was only an extension of the Union Cabinet’s February 2012 decision to offer concessions to domestic IT and electronics manufacturers.