Telecom windfall wasted by Govt

In June,the telecom spectrum auction raised Rs 1,06,336 crore for the government coffers,over three times the original estimate of Rs 35,000 crore revenue from both 3G and Broadband Wireless Access BWA.

As for the reasons for 8216;rays of light getting cloudy8217;,it cited the government8217;s additional expenditure of Rs 68,300 crore,besides reduced prospects of higher disinvestment proceeds on account of the dilution of capital raising norms and possible extension of the Food Security Act,which can bloat the subsidy bill.

8220;All of this could erode the surplus telecom auction revenues,thus resulting in the FY8217;11 deficit remaining around budgeted levels of Rs 3,81,400 crore,8221; Malkani and Shah said in a research report.

However,as a percentage to the gross domestic product GDP,the deficit could still be below the 5.5 per cent level 8212; which is the government8217;s projection for this fiscal due to higher nominal GDP growth,Citi said.

Earlier this month,the government tabled its first supplementary demand for grants for additional spending to the tune of Rs 68,300 crore,of which the net cash outgo was estimated at Rs 54,600 crore.

Furthermore,the government recently diluted the norms for minimum listing requirements,under which it was proposed to raise the threshold for public shareholding in listed companies to a minimum of 25 per cent.

It exempted public sector companies from the 25 per cent free float and removed the mandatory 5 per cent addition to public shareholding each year for private corporates as long as they met the 25 per cent norm within 3 years.

The diluted norms would result in the total capital to be raised coming down substantially,Citi said.

8220;While this eases concerns on oversupply of paper,it reduces prospects of divestment proceeds from PSUs from USD 26.3 billion to USD 4.1 billion,8221; the note said.

Meanwhile,gross tax revenues during the April-June,2010-11,period stood at Rs 1,29,500 crore,up 28.6 per cent year-over-year.