Sad call for telecom

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Sunil Bharti Mittal

The thrust on development of agriculture and infrastructure sectors is welcome. On the telecom front, the Finance Minister has indicated a thrust towards rural connectivity and bridging the digital divide.

The reduction in the peak rate of customs duty is in line with earlier commitments. The simplification of tax administration continues and the abolition of 1/6 scheme is welcome. The commitment to move towards GST by 2010 is also a welcome step.

On Direct Taxes, an increase in MAT by more than 20 per cent is most unwarranted and not in line with the intent of the Government to seek investment in long gestation infrastructure projects which, while enjoying tax holiday, get hit by MAT.

For the Telecom sector, I am afraid the Budget has been a disappointment.

All of us were expecting a reduction in the tax burden on the consumer by way of reduced licence fee, which has not happened, despite the service tax having been increased from 10 per cent to 12per cent.

The only demand of the sector has been to reduce the burden on the consumer so that there is increased telecom penetration. It is widely acknowledged that increased penetration is vital for the economic development. I do hope that there is a reconsideration of this matter by the Finance Minister.

(The author is Chairman & Group Managing Director, Bharti Enterprises.)

(This article was published in the Business Line print edition dated March 1, 2006)
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