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Standing still

If India’s ‘Doing Business’ rank is to improve, government must address stasis in telecom sector.

By: Express News Service |
October 8, 2014 4:30:23 am

Following the prime minister’s “Make in India” speech in which he set a target of taking India’s rank in the World Bank’s Ease of Doing Business report from 134 to the top 50, the Centre has unveiled a two-pronged strategy to mitigate the hassles faced by businesses. While the states are being exhorted to make the investment climate less hostile, another plan is underway to cut inter-departmental squabbling on clearances at the Centre. This is, of course, most welcome, especially as the government appears to be borrowing from the experience of states and benchmarking “best practices” for regulatory processes. But for an administration desperately trying to attract business, its policies in the telecom and oil sectors are bewildering.

In the telecom sector, for instance, there has been an inexplicable delay in the department of telecommunications granting companies the spectrum that they won in the February auctions. And given that the 20-year-old licences for spectrum in the 900 Mhz band will be up for renewal next month in circles like Delhi, Kolkata and Mumbai, the delay in allocation could result in choked networks, disruptions and call drops. That’s not all. By challenging the TDSAT verdict allowing intra-circle roaming in the 2100 Mhz band in the Supreme Court — indeed, even the Q&As attached to the government bid documents allowed this — the Centre is further vitiating the environment. With the mergers and acquisitions policy still unclear, expiry and non-renewal of 900 Mhz licences across circles imminent, and the government unable to free up and offer more spectrum for auction, the overall scenario is dismal. Indeed, the upcoming auctions early next year will likely witness some fierce bidding because getting more spectrum is now a matter of survival for telcos.

A similar stasis pervades the oil sector where a decision on gas prices is still awaited. As are resolutions to year-old export proposals and lease extensions. Oil and telecom are two sectors in which businesses are waiting to pump in capital. The stakes are high. In fact, it has been estimated that a 10 per cent increase in broadband penetration could increase the GDP growth rate by 1.4 percentage points. It’s time to get moving.

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