Major boost for telecom infrastructure in FY25

The revised allocation for the DOT in the union budget for the FY24 was Rs 98,359 crore. Compared to this, there is an increase of 14 per cent in the budget allocation for the year 24-25.

Most of the budgetary support (Rs 82,916 crore) given to BSNL in 24-25 as capital infusion will be in the form of allocation of 4G/ 5G spectrum. Capital infusion in BSNL increased by 28 per cent from Rs 64,787 crore in FY24. It is hoped that with this government support, BSNL will launch 4G service, soon after stabilisation of the indigenous core

Parliamentary approval for the union budget for the financial year 24-25 was completed on August 8, 2024. The total allocation for the Department of Telecommunications (DOT) for 24-25 in the union budget is Rs 1,28,915 crore. In this amount, Rs 17,000 crore will be met from the balance available in USO fund (now rechristened as Digital Nidhi as per Telecom act 2023). This allocation of Rs 1,28,915 crore is for telecom projects, organisations and PSUs under the Department of Telecommunications. The budget allocation for the Department of telecommunications for FY25 is 2.3 per cent of the total budget of the central government. In the above budget allocation for DOT, the lion share of 79 per cent goes to BSNL and MTNL.

Details of allocation to BSNL

Budgetary support of Rs 82,916 crore will be given to BSNL as capital infusion for technology upgradation. Through IEBR (Internal and Extra Budgetary Resources), Rs 500 crore will be raised. As viability gap funding, Rs 1200 crore will be given. This provision is for providing grant in aid to BSNL towards unviable rural wireline operations for the period 14-15 to 20-21. A provision of Rs 556 crore is made towards the waiver of guarantee fee payable on sovereign guarantee to BSNL/MTNL. For providing telecom connectivity for Amarnath Yatra, Rs 1 crore is allotted to BSNL under revenue. For implementation of VRS in BSNL/MTNL Rs 0.01 crore is given.

Details of allocation to MTNL

A provision of Rs 311.74 crore under revenue is made for payment of interest on bonds issued by MTNL, in lieu of refund of GSM spectrum charges/CDMA spectrum charges. Further provision of Rs 3,669 crore is made under revenue, for the payment of principal amount of MTNL bonds. Towards loans on invocation of government guarantee, Rs 156 crore is allotted. Provision is also there for the budgetary support of Rs 156 crore and through IEBR, Rs 8571 crore will be raised.

Support from Digital Nidhi

For transferring to Digital Nidhi, Rs 2,000 crore has been allotted to the Department of Telecom. To compensate the Telecom Service Providers, Rs 10,100 crore is allotted under revenue for operation of services in unremunerative areas. This allocation also includes provision for the North East Region (Rs 1060 crore). For Bharatnet, Rs 8,500 crore has been allocated under capital. Bharatnet project is for creation of telecom infrastructure for providing broadband connectivity to all Gram Panchayats. For promotion of R&D and commercialisation of telecom technologies and solutions to enable affordable proliferation of broadband and mobile services in rural and remote areas, Rs 400 crore is allotted.

Encouragement to Telecom Manufacturing

To encourage Atmanirbharta in telecom gear manufacturing, the government has increased Basic Custom Duty (BCD) on Printed Circuit Board Assembly (PCBA) of specified imported telecom equipment from 10 per cent to 15 per cent.

25 minerals such as lithium, copper, cobalt and rare earth elements which are critical for the sectors including telecom, will be fully exempted from custom duty and BCD will be reduced on two of them. Customs duty is reduced on parts of mobile phones such as cameras, lenses etc.

In the budget, a provision of Rs 34.46 crore has been made for Technology Development and Investment promotion. Rs 70 crore is allotted for ‘Champion sectors in Services’ scheme. This scheme is to promote trade in identified champion services including telecom services. Rs1,806 crores is allotted for the implementation of Production-linked Incentive (PLI) Scheme.

Allocation for CIOR (Centralised International Out Roamer)

Protecting the citizens from cyber frauds has been engaging the attention of the union government for quite some time. In pursuant of this concern, the government has allotted Rs 38.76 crore in the Union budget to DOT for setting up the Centralised International Out Roamer. This allocation of Rs 38.76 crore to CIOR system caused a marginal increase over the interim budget for 24-25.

CIOR is a system that detects and blocks spoof international calls that are shown as originating from Indian numbers. Scammers masquerade as police, FedEx employees and others to call victims from international phone numbers that appear as Indian numbers on the victim’s phone.

Apart from the above allocation, the government has allocated Rs 6 crore to Telecom Testing and Security Certification Centre, Rs 8.54 crore to T-CSIRT (Telecom Computer System Incident Response Team) and Rs 1.4 crore for Mandatory Testing and Certification of Telecom Equipment (MTCTE). For DIU (Digital Intelligence Unit) project, Rs 85 crore is allocated. The objective of this project is to investigate fraudulent activity involving telecom resources such as UCC (Unwanted Commercial Communication) etc.

Allotment to other units

For TEC Rs 0.17 crore, CDOT Rs 500 crore and ITI Rs 168 crore are allotted under capital head. Through the IEBR route, Rs 110 crore will be raised for CDOT and Rs 100 crore for ITI. For 5G Test Bed Rs 2.92 crore under revenue is allotted. For TRAI and TDSAT Rs 10.5 crore is allotted under capital which includes the provision for construction of office building for TRAI. For skill development Rs 0.4 crore is earmarked under revenue. This provision is for the pilot scheme to open Pandit Deen Dyal Upadhyay Sanchar Kaushal Vikas Prathisthan. For the secretariat services in DOT, CCAs, TERM cells, TEC, Administrator Digital Nidhi and Centralised Monitoring System (CMS), Rs 958.83 crore under revenue and Rs 27.31 crore under capital are allotted. For meeting the expenditure towards pensionary benefits of DOT retired employees, BSNL absorbed retired employees and MTNL absorbed retired employees with effect from 1.04.2014, Rs 17,510 is allotted. As special assistance to Swatchata action plan, Rs 2 crore is allotted.

Way forward

The revised allocation for the DOT in the union budget for the FY24 was Rs 98,359 crore. Compared to this, there is an increase of 14 per cent in the budget allocation for the year 24-25.

Most of the budgetary support (Rs 82,916 crore) given to BSNL in 24-25 as capital infusion will be in the form of allocation of 4G/ 5G spectrum. Capital infusion in BSNL increased by 28 per cent from Rs 64,787 crore in FY24. It is hoped that with this government support, BSNL will launch 4G service, soon after stabilisation of the indigenous core.

With CIOR system and other cyber security systems put in place by the government, it is expected that the menace of cyber crimes and frauds will be mitigated.

With the fillip given in the budget for local telecom gear manufacturing, it is hoped that we will become not only almost self-sufficient in mobile phones, including 700 MHz phones required for BSNL 4G, but also in a position to export them leading to trade surplus.

(The author is a former Advisor, Department of Telecommunications (DoT), Government of India)