The Government has earmarked a budget of Rs 228.85 billion for the Department of Telecommunications for 2015-16. The corresponding budget for 2014-15 was Rs 135 billion, which has been revised to Rs 217.67 billion. Meanwhile, the earmarked budget for the Department of Electronics and Information technology for 2015-16 is Rs 34.85 billion.
In terms of Investment into public enterprises, the government has earmarked a budget of Rs 97.96 billion for Bharat Sanchar Nigam Limited (BSNL) for 2015-16. BSNL?s earmarked budget for 2014-15 was Rs 51.32 billion, which has been revised to Rs 71.42 billion. Meanwhile, Bharat Broadband Network limited, the executing agency of the National Optical Fibre Network (NOFN) project, has been allocated Rs 99.03 billion for 2015-16 in the Budget.
Further, as per the budget, the compensation to service providers from the Universal services Obligation (USO) fund will be Rs 21.49 billion for 2015-16. In 2014-15, the compensation was budgeted at Rs 31.59 billion, which has been revised to Rs 18.60 billion. Apart from this, the government?s telecom project for defence forces, the Network for defence services, has received Rs 21.50 billion in the budget for 2015-16, while the outlay for 2014-15 has been revised to Rs 3.85 billion.
The government has stated in the budget that it expects revenue of Rs 428.66 billion ($6.95 billion) in 2015-16, from the telecom sector which includes revenue from auctions of spectrum to be held in March 2015.
Other features of the budget include the increase in service tax rate from 12.36 per cent to 14 per cent. This is likely to increase the cost of telecom services, which may translate into an upward revision of mobile tariffs. Meanwhile, the excise/customs duty on mobile phones has been increased from 6 per cent to 12.5 per cent, which is likely to impact the sales of these devices.
