Telecom Sector Welcomes Changes In Interim Budget; Expresses Optimism For Future
Following the unveiling of the interim budget for FY2024-25, the telecom sector is abuzz with activity. This surge is primarily attributed to the extension of the existing customs duty exemption for laying submarine cables and the announcement of a Rs 1 lakh crore corpus dedicated to the technology sector.
For India's tech-savvy youth, this will be a golden era. "A corpus of Rs 1 lakh crore will be established with a 50-year interest-free loan provided. It will be for long-term financing or re-financing with low or nil interest rates," said Nirmala Sitharaman during the presentation of the interim budget.
Commenting on the presentation, S.P. Kochhar, Director General, Cellular Operators Association of India (COAI), said, “The Interim Budget presented today reemphasised the government’s economic policies and the commitment to sustained growth, improving productivity and creating opportunities with a focus on skilling and reskilling,”
“In a significant gain for the telecom sector just before the interim budget, the current customs duty exemption granted to vessels engaged in laying submarine cables in India - which lapses on 31st March 2024 - was extended up to 30th September 2024,” Kochhar added. Telecom companies rely heavily on submarine cables for the high-speed transfer of data around the globe.
Ravi Kunwar, Vice President, India & APAC at HMD Global, similarly commented on the manufacturing side of things, stating, “The Interim Budget is forward-looking and represents the remarkable evolution of India's mobile and telecom landscape in the last decade, standing true to our expectations. The allocation towards the development of electronics manufacturing clusters unlocks the accessibility of high-quality technology for varied consumers, including those at the bottom of the pyramid. Additionally, the proposal to further provide relief in customs duty on the import of battery covers, main lenses, back covers, and mechanical items will boost the Make in India initiation and solidify the mobile manufacturing ecosystem in the country."
Kunwar added, “This reduction, coupled with the establishment of a Rs 1 lakh crore corpus supported by a fifty-year interest-free loan, will empower the private sector to significantly advance research and innovation in sunrise domains.”
Kochhar of COAI also commented that the “announcement of a corpus of Rs 1 lakh crore for the technology sector is a positive measure as access to capital is a critical factor to support innovation and growth. The long-term, interest-free or low interest rate loans and focus on deep tech will further encourage the private sector to scale up research and innovation.”
As this was only an interim budget, with the general elections slated for later this year, industry leaders expressed optimism for bigger policy changes once a new government is elected to power.
“We are hopeful that in the post-election full budget, the industry’s suggestions to reduce regulatory levies like License Fee, deferring USOF contribution till the existing funds are exhausted, exemption of Basic Customs Duty (BCD) on Telecom equipment, waiving of GST on regulatory payments and refund of ITC, among others, will be considered and addressed by the Government during the course of the year,” Kochhar said.
Among similar lines, Kunwar stated, “despite the industry's growth, there is substantial room for expansion in India, and we are optimistic that supportive government policies, infrastructure investments, and a vibrant innovation ecosystem will unleash the next wave of digital transformation.”
