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New spectrum auction to plug fiscal hole?

The finance ministry is banking heavily on additional revenue from telecommunication licences and a broadband spectrum auction, as the continuing tug-of-war between sliding growth and rising inflation appears to have upset the government's budget maths. HT reports. Team Pranab faces a series of growth hurdles

business Updated: Oct 03, 2011 02:21 IST
HT Correspondent

The finance ministry is banking heavily on additional revenue from telecommunication licences and a broadband spectrum auction, as the continuing tug-of-war between sliding growth and rising inflation appears to have upset the government's budget maths.

The government has budgeted for Rs 29,648 crore as additional revenue as licence fees from telecom operators, receipts on account of spectrum usage charges and auction of broadband wireless access (BWA) spectrum.

The government expects to earn at least Rs 15,000 crore from the auction of broadband spectrum alone, a finance ministry official said.

The telecom ministry, the official said, has been asked to finalise the details to sell one block of broadband radio waves.

The Department of Telecommunication (DoT) has around 20MHz of broadband spectrum in most telecom circles, including the lucrative zones of Delhi and Mumbai, which can accommodate one more player in each circle.

The government also expects to earn another Rs 15,000 crore from recurring licence fees, and other usage charges from the telecom sector is expected to account for about Rs 14,000 crore.

"The finance ministry has asked the DoT to expedite the process and the telecom department is expected to finalise the auction model and processes by the month end," said an official on the condition of anonymity.

Last year, the auction of third generation (3G) spectrum fetched the government around Rs 67,719.0 crore, while the auction of spectrum for BWA netted the government about Rs 38,000 crore.

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