Rs.15,740 crore for state-run telecom firms

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SME Times News Bureau | 07 Jul, 2009
The government has earmarked Rs.15,740.02 crore ($3.2 billion) for the two state-run telecom majors in the budget for 2009-10 presented by Finance Minister Pranab Mukherjee in parliament Monday.

According to Mukherjee, Bharat Sanchar Nigam Ltd (BSNL) will get Rs.14,015 crore as budgetary allocation, while Rs.1,725.02 crore will be provided to fund the expenses of Mahanagar Telephone Nigam Ltd (MTNL).

The minister has also proposed to allocate Rs.2,820 crore to discharge the liabilities of the state-run telecom equipment manufacturer, Indian Telephone Industries Ltd (ITIL) and clean up its balance sheet.

While the telecom regulator Telecom Regulatory Authority Of India (TRAI) received Rs.10 crore as budgetary support, the Telecom Disputes Settlement Tribunal (TDSAT) has been allocated a meagre Rs.1 crore.

The Universal Service Obligation Fund (USOF) has been allocated Rs.2,400 crore.

USOF, being raised through a 5 percent levy imposed on telecom operators' revenues, is utilised for supporting telecom services in rural areas.

Mukherjee has allocated Rs.26 crore for providing optical fibre cable network to defence services.

Manoj Kohli, chief executive and joint managing director of Bharti Airtel said the budget "signals significant demand stimulus emanating from its rural and infrastructure growth packages".

"Telecom infrastructure is an engine of growth and if we are able to double the tele-density to 75 percent in the next five years, especially due to the rural development focus of the government, then GDP growth can be enhanced by 2-3 percent," he added.