By achieving the fastest 5G rollout globally, the Indian telecom industry has showcased its potential to drive the vision of a digitally empowered India.
As India swiftly transitions into a digital economy, the telecom sector emerges as a vital connector, linking individuals, communities, and even objects. Serving as a multi-channel facilitator of daily engagements and transactions, telecom stands as a cornerstone of economic development in our nation. Given this context, we have consistently advocated for reforms, recognizing the pressing need to remove obstacles hindering industry growth. We anticipate that the upcoming interim Budget, scheduled before the 2024 Lok Sabha Election, not only tackles existing telecom sector challenges but also steers it toward a resilient and financially stable future.
With India’s rapid progress in global 5G deployment, the telecom industry assumes a leading role in technological advancement. By achieving the quickest 5G rollout globally, the Indian telecom sector has demonstrated its ability to propel the vision of a digitally empowered India. Moreover, we are making strides in the 6G competition, courtesy of the indigenous Bharat 6G Vision championed by our visionary leaders and industry stakeholders. We anticipate that the forthcoming Budget acknowledges these achievements and meets industry needs by adopting a favorable tax framework and other supportive measures, building on the government’s recent reform-oriented approach.
To address the issue of high regulatory fees on the sector, we propose the elimination of the Universal Service Obligation Fund (USOF) levy, ideally. Should this not be feasible, the USO contribution should be suspended until the existing USOF fund is depleted. Additionally, we advocate for reducing the license fee from 3 percent to 1 percent, covering only administrative expenses incurred by the Department of Telecommunications (DoT)/government.
The industry strongly urges the DoT to launch a comprehensive consultation process regarding matters related to adjusted gross revenue (AGR). It is imperative to ensure that revenue generated from activities not requiring a license is explicitly excluded from the gross revenue calculation. This adjustment will significantly contribute to establishing a fair and balanced regulatory framework for the telecom sector, aligning with the industry’s evolving dynamics and challenges.
Similarly, in the direct taxes segment, we urge the introduction of a special regime under Section 72 of the Income Tax Act, allowing telecom operators to carry forward and set off business losses for 16 assessment years, instead of 8 years. This becomes particularly relevant in the face of the challenges faced by the industry, including the Supreme Court’s rulings on AGR matters.
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