Telecom Lead India: In the currently prevailing
regulatory uncertainties impacting the telecom sector, industry would expect
the Union Budget 2012 to take measures so promote the continuing growth in the
sector.
Expectations from upcoming budget would include:
Subsidies for expansion to rural areas: Given low rural
teledensity and widening urban-rural penetration gap, government may consider
subsidies as either directly or through Universal Services as an incentive to
provision telecom services in rural areas
Streamlining subsidy provisioning for usage of renewable
energy sources: This would be especially beneficial in rural areas where
telecom connectivity is constrained due to long power outages and high running
costs for telecom infrastructure
Re-investing a portion of proceeds from the upcoming
auctions into the telecom sector growth especially in rural areas
Tax rebates for broadband services: This would lower cost
to the end consumer and would help achieve government’s objective to increase
broadband penetration manifold
Rationalization of taxes e.g. extension of 80IA benefits
to 3G investments, streamlining of various local and national/state taxes
By Jaideep Ghosh, partner-Advisory, KPMG India
