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Spectrum auction hit, fiscal woe looms

business Updated: Oct 19, 2011 01:56 IST
HT Correspondent
HT Correspondent
Hindustan Times
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A question mark loomed over the India's ability to meet this year's fiscal deficit target with the communications ministry delaying an auction of additional telecom spectrum this year as earlier planned.

The move might create a Rs 30,000-crore hole in the government's non-tax revenue estimates, further raising the risk of widening the fiscal deficit from the budgeted 4.6 % of the gross domestic product (GDP) for 2011-12. http://www.hindustantimes.com/Images/HTEditImages/Images/19-10-biz1.jpg

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

A finance ministry official said the government was expecting to earn at least Rs 15,000 crore from auction of broadband spectrum alone.

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

The government was also expecting to earn another Rs 15,000 crore from recurring licence fees and other usage charges from telecom.

"The finance ministry has asked DoT to expedite the process but the auction model and other norms are far from being finalised," an official, who did not wish to be identified, said.

The finance ministry is of the view that the winning bid in last year's auction for broadband wireless spectrum should be fixed as the base price.

"BWA ( broadband wireless access), 20 Mhz of spectrum is available across country and the (telecom) ministry is in talks with finance ministry to undertake auction but a final decision has not been taken yet," a government official told HT.

"The BWA spectrum is with the defence forces and presently they are using it. We will be in a position to auction it only when they vacate it," said a DoT official. "There is no chance of defence forces vacating it in this fiscal."