NEW DELHI, February 2: The Department of Telecommunications (DoT) has decided to go in for a single corporation, separate from the Communications Ministry at the Centre, as the most favoured model to be followed for restructuring the mammoth organisation. In a note prepared for the Prime Minister's Office (PMO), the DoT has stated that this option was better than opting for the four separate regional corporations being mulled at the Ministry level.Apprising the PMO of its decision, as the matter was discussed at length at a meeting with the Prime Minister I K Gujaral in November last, the DoT has stated that a single corporation would be a simpler model than setting up four regional corporations where the DoT would have to embark on a cumbersome route to divide the assets of DoT equally among the four corporations.Further, as the DoT currently operates, there is regional cross subsidisation for providing services in every corner of the country. While there are some regions in the DoT network whichgenerate surplus revenues, others like the North east and most rural areas do not generate much revenues and the DoT establishes its networks in these areas from the surplus revenue that it collects from other areas. This cross subsidisation would be difficult to implement if the four regional corporations came into being as transfer of revenues from one independent corporation to another would be administratively difficult.According to available indications, though the DoT has sent the latest status report on corporatisation of the department to the PMO as a follow-up of the November meeting with the PM, any further decisions on this front would have to be taken once the new government is in the saddle.Presently, the finance wing of the DoT is studying the financial aspects of such a restructuring model. The two options before the department are whether to set up a statutory corporation like the LIC, while the other is to set up a corporation under the Company Law.While the former has the advantageof being a wholly owned state subsidiary exempt from payment of taxes , the latter has the advantage of tapping the open market for raising finances. The only problem that the DoT faces in the single corporation model is the fact that it would have to pay a large corporate tax especially since the department has earnings which run into over Rs 15,000 crore.
