New Delhi: Finance Minister Nirmala Sitharaman announced Wednesday that the Union government will set up 100 labs to develop applications — such as those related to smart classrooms and intelligent transport systems — using the newly-launched 5G services.
“One hundred labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential. The labs will cover, among other things, applications such as smart classrooms, precision farming, intelligent transport systems, and healthcare,” Sitharaman said while presenting the Union Budget 2023-24.
Speaking to reporters at a press conference, communications minister Ashwini Vaishnaw added that “with the 5G labs, our youngsters will be able to study and understand and develop new products and use cases. In the next two-three years, India will become a big exporter of telecom products as opposed to being an importer 10 years ago.”
The finance minister also announced relief in customs duty on import of certain mobile phone components, which is expected to boost value addition in domestic manufacturing as well as bring down the price of these devices.
“As a result of various initiatives of the government, including the Phased Manufacturing Programme, mobile phone production in India has increased from 5.8 crore units valued at about Rs 18,900 crore in 2014-15, to 31 crore units valued at over Rs 2,75,000 crore in the last financial year,” she said.
“To further deepen domestic value addition in the manufacture of mobile phones, I propose to provide relief in customs duty on import of certain parts and inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year,” she added.
According to the budget document, the 2.5 per cent basic customs duty on camera lens and its inputs/parts for use in manufacture of mobile phone cameras has been done away with.
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‘Focus on increasing digitisation’
Sabyasachi Majumdar, Senior Vice President & Group Head, Corporate Ratings at ICRA, said the budget was continuing the Centre’s focus on creating a robust digital infrastructure to increase digitisation across various sectors, which bodes well for the telecom industry as it is likely to result in increased usage of telecom services and revenue generation for telcos.
“The announcement of setting up 100 labs for indigenous development of 5G-based use cases to develop applications around smart classrooms, precision farming, healthcare, etc. opens up a range of opportunities and business models for the incumbents,” he said.
“The revised estimate (RE) of non-tax revenue from communication services (telecom sector) for FY2023 stood at around Rs 68,700 crore, higher than the budget estimate (BE) of Rs 52,800 crore. Moreover, the BE for FY2024 stands at Rs 89,500 crore, which is higher than ICRA estimates, and likely assumes another spectrum auction in the next fiscal,” he added.
The non-tax revenue from the communication sector mainly relates to licence fees from telecom operators and receipts on account of spectrum usage charges.
“Revenue realisation in telecom is consistent. It is (showing) good growth. It is a sunrise industry and this is reflected in the higher revenue realisation which has been budgeted,” Vaishnaw said.
According to the budget document, the government has allowed for expenditure of Rs 1,08,153.25 crore for the communications sector in 2023-24, nearly 28 per cent higher than the budget estimate of Rs 84,586.80 crore for 2022-23.
The Department of Telecom has budgeted Rs 52,937 crore to be infused into Bharat Sanchar Nigam Limited (BSNL), amid efforts to revive the telecom PSU. For the current fiscal, the budget estimate for capital infusion in BSNL was Rs 44,720 crore, which was later lowered to Rs 33,269.01 crore in revised estimates.
The Centre had in July 2022 approved a Rs 1.64-lakh-crore package for revival of BSNL. The government in 2019 too cleared a package worth nearly Rs 70,000 crore for the revival of BSNL and MTNL, while also giving in-principle nod for the merger of the two entities.
(Edited by Nida Fatima Siddiqui)
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