The Department of Telecommunications (DoT) has provided clarifications to various ministries, which had opposed a few proposals in the new telecom policy (NTP) 2012.
Following the clarifications provided by DoT the NTP draft policy will be presented to the cabinet for its approval.
Earlier the Ministry of Commerce, the Department of Financial Services and the Department of Space had opposed various proposals in the first draft of the revised national telecom policy.
As the Union Cabinet did not approve of the NTP the ministry of communications and IT has now moved a supplementary Cabinet note offering its response to the objections of each of the ministries.
The Ministry of Commerce had raised concerns over the proposal within the NTP to permit preferential access to locally manufactured telecom products. It was of the view that any requirement of indigenisation through value addition in the NTP 2012 would violate the prohibition of quantitative regulations on procurement from domestic sources under the General Agreement on Tariff and Trade.
The Department of Financial Services had opposed bringing the telecom sector under the gamut of infrastructure financing schemes. The NTP envisages providing telecom an infrastructure status thus making the sector eligible for financing from organisations such as the India Infrastructure Finance Company Limited. The Department of Financial Services argued that such proposals should be finalised only after the approval of an empowered committee and the Finance Minister.
According to DoT the primary goal of the new framework of NPT is to maximise public good by making available affordable, reliable and secure telecom and broadband services. Direct revenue generation will only be a secondary objective. DoT has also clarified that all future licences and spectrum will be made available only through market-related processes.
DoT has 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 subsidised 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 100 billion telecom R&D fund and a 30 billion mobile equipment manufacturing fund to support local hardware manufacturers.
Addressing the concerns of the Department of Financial Services, the DoT has maintained that the new policy will give telecom an infrastructure status, even as it has done away a clause that made mobile phone companies eligible for financing from organisations like India Infrastructure Finance Company Limited.
