The government has proposed an allocation of Rs 1.28 lakh crore for telecom projects and public sector companies under the Ministry of Telecommunications. Most of this amount has been earmarked for the public sector Bharat Sanchar Nigam Limited (BSNL). Of the total proposed allocation, more than Rs 1 lakh crore is for expenses related to BSNL and MTNL, including an investment of Rs 82,916 crore for technology upgradation and restructuring in BSNL. According to the budget, “The total net allocation for this demand in Budget Estimates 2024-25 is Rs 1,28,915.43 crore (Rs 1,11,915.43 crore and Rs 17,000 crore). The additional provision of Rs 17,000 crore is met from the balance available under the ‘Universal Service Obligation Fund’ and will be used for schemes such as compensation to telecom service providers, BharatNet and research and development. ”
Rs 17,510 crore for pension benefits
The budget proposes to allocate Rs 17,510 crore for pension benefits of the employees of the Department of Telecommunications, including those of BSNL and Mahanagar Telephone Nigam Limited (MTNL). The government has proposed to allocate Rs 3,668.97 crore for payment of the principal amount of MTNL bonds. The budget has made a provision of Rs 34.46 crore for technology development and investment promotion, Rs 70 crore for Champion Service Area Scheme and Rs 1,806.34 crore for Production Linked Incentive (PLI) Scheme.
Import duty hiked here
Apart from the allocation, the government has proposed to increase import duty on motherboards (printed circuit boards) by five per cent in the Union Budget 2024-25 to boost domestic telecom equipment manufacturing. “To encourage domestic manufacturing, I propose to increase the BCD (basic customs duty) on PCBA (printed circuit board assembly) of specified telecom equipment from 10 per cent to 15 per cent,” Finance Minister Nirmala Sitharaman said. The hike in basic customs duty for telecom PCB manufacturing comes along with exemptions to critical minerals used in the manufacturing of communications equipment.
Exemptions here
The finance minister has proposed to completely exempt 25 minerals such as lithium, copper, cobalt and rare earth elements from customs duty. These minerals are crucial for sectors such as atomic energy, renewable energy, space, defence, telecom and high-tech electronics. Basic customs duty on two of these will be reduced. Sitharaman said, “This will promote the processing and refining of such minerals and help ensure their availability for these strategic and critical sectors.” GX Group Chief Executive Officer (CEO) Paritosh Prajapati said, “The increased BCD on PCB assembly for telecom equipment supports local manufacturers and reduces costs for telecom OEMs (original equipment manufacturers). This will infuse the industry with new energy and confidence.” GX Group is one of the beneficiaries of the telecom PLI scheme.
