The Hindu Business Line : Bid to close teledensity gap

The outlay for National Rural Employment Guarantee Scheme (NREGS) has been increased to Rs 16,000 crore as against Rs 12,000 crore in the previous year. The budget also emphasises on the development of rural infrastructure and agriculture. These measures will positively impact the rural economy and demand.

The telecom sector, with its emphasis on enhancing affordability and focus on rural India, will stand to benefit from these measures. This will enable the country to bridge the teledensity gap between rural and urban India (8 per cent and 60 per cent respectively at the end of 2007).

The increase in tax slabs for personal income-tax is a welcome step, which will hopefully result in improved tax compliance. The threshold limit of exemption for all assessees has been increased by Rs 40,000, thus giving every assessee a relief of Rs 4,000. Withdrawal of education cess could have been another positive step in this direction, besides the reduction in corporate tax rates.

Service tax remains unchanged — a welcome relief for consumers. Increase in the threshold limit to Rs 10 lakh from Rs 8 lakh will definitely benefit small-scale service providers in both the organised and unorganised sectors. Stability in service tax rates will also provide stability to industry and consumers.

The general reduction of Cenvat from 16 per cent to 14 per cent will definitely provide an impetus to the manufacturing sector. There is need for concrete effort to rationalise tax structure for telcos as promised in 2007-08 Budget.

(The author is CFO, Bharti Airtel Ltd.)

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