Wednesday, May 16, 2012

Communication Services


Our concept is that God has bestowed our country (India) with so much resources that all our national expenses can be met from revenue from them. The present Government policy is ‘Tax centric’ and ‘Debt centric’; the income from national resources is shabbily termed as ‘Non-tax Revenue*’.  This policy need to be transformed.  India can be the first country in the world which can be a Tax and Debt free. Nation – a role model for the entire world.

We are making a systematic study of income potential from  various ministries to prove this fact conclusively.  The first study we made was aboutinistry of Communication Ministry.  Prima facie, it appears that minimum ten percent of National Expenses cab be met by Communication Ministry every year.  The calculation as per Budget document for the current F.Y. are as follows:



National Revenue


Rupees in Crores




Actual
.B.E.
Rev.BE
BE



2010-11
2011-12
2011-12
2012-13








1
Tax Revenue
793072
932440
901664
1077611
2
Debt receipt
367162
392816
546644
513590
3
Non-tax revenue
218602
125435
124737
164614
4
Total
1378836
1450691
1573045
1755815
5
Less: Loan Repayment
147793
104927
123929
124302
6
Less: Interest Pmt
234022
267986
275618
319759
7
Total Payment
381815
372913
399547
444061
8
Net funds for National Expenditure
997021
1077778
1173498
1311754
9
From Communication
120547
29648
16551
58217
10
Per cent of Total
12.09
2.75
1.41
4.44
11
10% of Total Revenue
99702
107777
117349
131175
12
Surplus/shortfal
20844
-78129
-100799
-72958


From the above calculations it transpires that Communication Ministry contributed 12.09% of total National expenses in the FY 2010-11, excluding the cost of interest on National debt which shall be discussed separately.  In that year you got sale proceeds from auction of 3G for about Rs. 80,000 Crore. In the year ended 31.3.2012 the earnings fell down to just Rs. 16,551 crore contributing only 1.41% of National Expenses.  In the current income from Communication Services is estimated at Rs. 58,217 crore which will be 4.44% of National expenses.  Perhaps the increased estimate is based on possible income from re-auction of 2G licenses. 

According to the figures coming out this estimate is grossly under-estimate of potential income from sale of 2G.  As per TRAI, it should fetch Rs. 7 lac crore for 10 years, i.e. Rs. 70,000 crore per annum.  On mercantile accounting principle the income of Rs. 7 lac, or whatever, should be apportioned on yearly basis.  Thus the Ministry stands to gain a substantial income from sale of 2G alone. Adding income from other services of Ministry, we can assume that you can contribute something in the range of Rs. 1.40 lac crores to the national exchequer every year.  This will be about ten percent of National Expenses, excluding the interest on sovereign debt.


We shall convey our study about other Ministries from time to time. We have no doubt that country’s expenses can be met from the income from National assets every year and there is no need to levy any kind of taxes and borrow any money.


As per Budget proposal for the F.Y. 2012-13
Communication Services

                                                                                                            Rupees in     Crores Rupees
6.06. Communication
Major Head
Actual 2010-2011
Budget 2011-2012
Revised 2011-2012
Budget 2012-2013






6.06.01. Other Communication Services
1275
120547.63
29648.33
16550.83
58217.33

6.06. Receipts under 'Other Communication Services' mainly relate to the licence fees from telecom operators, receipts on account of spectrum usage charges and auction of Broadband Wireless Access (BWA) spectrum currently in use by Central PSUs; receipts from spectrum held in excess of 6.2 MHz and receipts from auction of spectrum available with Government including spectrum to be vacated by 122 licences, in view of the order of Hon'ble Supreme Court. 


Department of Telecom collects recurring licence fees from various telecom operators licensed by it. It also collects one time Entry fees from new operators. The main service categories include Cellular Mobile Service, Basic Service, Unified Access Service, V-SAT Services, International and National Long Distance Services, Infrastructure Providers, Internet Services, Public Mobile Radio Trunk Service and Captive Mobile Radio Trunk Service. 


Barring a few services, the Licence Fee is collected based on percentage share of the operators Adjusted Gross Revenue (AGR) and includes a component of Universal Access Levy. The AGR in turn is influenced by factors like tariff, customer base, competition, etc. The collection from licence fee depends on the rate of licence fee, tariff and growth of the telecom service sector in the country. 


Spectrum charges are levied by the Department on the Service Providers, for usage of spectrum and are calculated either as a percentage of their Adjusted Gross Revenue depending upon the quantum of spectrum assigned for their network (for CMTS, Basic, UAS and Commercial VSAT Service Providers) or at flat rates or on the basis of formulae (for others). 


To be continued...

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