To provide broadband access to five crore rural citizens, an allocation of Rs 10,000 crore has been announced on the expansion of telecom infrastructure in Union Budget 2018-19.
In his Budget speech, Finance Minister Arun Jaitley said that "Task of connecting one lakh gram panchayat through high-speed optical fiber network has been completed under phase I of the Bharatnet project. This has enabled broadband access to over 20 crores rural Indians in about two lakh fifty thousand villages. The Government also proposes to set up five lakh wi-fi hotspots which will provide broadband access to five crore rural citizens. I have provided Rs 10000 crore in 2018-19 for creation and augmentation of Telecom infrastructure."
He said that "To harness the benefit of emerging new technologies, particularly the 'Fifth Generation' (5G) technologies and its adoption, the Department of Telecom will support the establishment of an indigenous 5G Test Bed at IIT, Chennai."
Jaitley has also announced allocation Rs 3,073 crore for the Department of Science and Technology (DST) to push adoption and development of new digital technologies in the country like machine learning, artificial intelligence (AI), Internet of things (IoT) and 3D printing.
"To invest in research training, and skilling in robotics, AI, digital manufacturing, big data intelligence, quantum communications and art of the things, the DST will launch a mission on cyberspace in support of the establishment of a centre of excellence. I have doubled their allocation on the digital India program to Rs 3,073 crore in 2018-19," Jaitley said during his speed. "Initiatives such as Digital India, start-up India, Make in India would help to establish itself as knowledge and digital society."
"Indian economy is now 2.5 trillion dollar economy in the world and expected to become the fifth largest economy very soon. IMF has projected India will grow at 7.4 percent next year. We are set to achieve high growth," he added.
He added that the Niti Ayog would establish a national programme to direct our efforts in the area of AI including research, and development of its applications.
Let's have a look at how some of the top smartphone makers responded to the new budget:
Rajan S. Mathews, Director General COAI said, " We reiterate that the telecom industry is deeply disappointed that none of our key asks have found mention in the budget. We had sought a reduction in levies and taxes, and an urgent intervention is critical for resuscitating the sector, which is currently experiencing its worst financial health and hyper-competition. We reiterate our four key asks, reduction extremely high and unsustainable levies & taxes, reduction in BCD on 4G LTE Equipment, clarity on RoW related taxation at the state level, & clarification on lowering the tax rate to 1 percent on discounts extended to small dealers. While the FM has emphasized the importance of moving to a digital economy, the actual digital highway, which is telecom has found no mention in terms of substantive support, unlike road, railway, highways, electricity, which have received substantial mention. We are saddened to see that telecom which is the bedrock for moving the Digital economy forward, continues to remain an Orphan.
Vishal Malhotra, Tax Leader, Technology, Media & Entertainment and Telecommunications (TMT), says, "Overall, the budget is on the expected lines. The proposal to treat foreign exchange gains/losses other than the purchase of capital assets from outside India, as a revenue item, should benefit the telecom operators since presently, any foreign exchange losses on domestic procurement including the purchase of spectrum are not tax deductible. Increase in customs duty on handsets to 20 percent should give a fillip to domestic manufacturing though this may increase the cost of imported handsets."
Hemant Joshi, Partner, Deloitte India, "Overall the Union Budget 2018 is good for the telecom Industry. The setting up of 5G center in collaboration with IIT Chennai would help India being an early adopter of the next generation technology rather than being a laggard. This could be a boon for the telecom industry and guide the telecom operators to move to next-gen networks efficiently and effectively. This center could also work on the development of the Internet of Things and Machine to Machine applications which are relevant and best suited for India. India could take lead in setting up standards for next-generation technologies and in turn help in boosting Make in India initiative.
The rollout of 5 lakh Wi-Fi hotspots through a budget of Rs 10k crore could be an excellent move for improving connectivity in rural areas and hence bringing them under the ambit of applications and services rolled out under Digital India. Increase in customs duty on mobile phones from 15 percent to 20 percent will delay the adoption of affordable smartphones in India until the manufacturing of these handsets starts in India."