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Major Decisions and Initiatives
COMMUNICATIONS & IT
The UPA Government completes one year on May 21, 2005. During this period, the Government has taken several important initiatives. Some of these are being brought out in the series ‘Major Decisions and Initiatives’.
TELECOM
The telecommunication sector has continued to register significant success during the year and has emerged as one of the key sectors responsible for resurgent India’s economic growth. The sector, which was growing in the range of 20 to 25 per cent up to the year 2002-2003 has moved to a higher growth path of an average rate of about 35 per cent during the last two years. This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector.
On the eve of completion of one year, India has crossed 100 million mark in terms of number phones. Thus the country is the fifth largest network in the world after China, USA, Japan and Germany. The potential to expand telecom network in India is immense, as our tele-density is only about 9 per cent as against more than 100 per cent in all the above-mentioned countries except China (55 per cent). The demand has already saturated in the developed countries, and India is bound to surpass them within the next four-five years. It is evident from the fact that the future growth would be in the mobile segment with a substantial contribution of both public and private sector.
Rural Telephony
As far as Rural Telephony is concerned, more than 87 per cent of the villages have already been covered. Bharat Sanchar Nigam Limited (BSNL) has provided most of these. This apart, the rural Direct Exchange Lines (DELs) in the country are about 133 lakh which have also been provided by BSNL. To give more fillip to the rural Telephony, a provision of Rs.1,200 crore has been made available for Universal Service Obligation (USO) support, for the year 2005-06. It is expected that the pace would considerably accelerate with the implementation of non-lapsable Universal Service Obligation Fund (USOF) and the private operators would also enter rural areas for providing individual rural phones. So far, Rs.1,814.50 crore have been made available to the operators for rural telephony of which Rs.1,314.50 crore have been provided during 2004-05. With this all revenue villages will be covered with village public telephones by November 2007 except thinly populated villages and those located in insurgency prone areas. Recent steps taken for rural telephony under USO Fund are:
Replacement of 1.84 lakh Multi Access Radio Relay (MARR)-based Village Public Telephones(VPTs) , of which 1.15 lakh VPTs have already been replaced and the remaining shall be replaced by the middle of 2006.
Agreements have been signed for installation of VPTs by November 2007 in the 66,822 uncovered villages. About 1,500 of these villages have been provided VPTs so far.
Agreements for a second public phone (RCPs) in 46,253 villages have been signed on September 30, 2004. 1,917 of these have been installed.
Agreements have been signed for providing Rural Household Lines (RDELs) in 1,685 Short Distance Charging Areas( SDCAs).
· For pilot project for provisioning of Public Tele Information Centres (PTICs) and High Speed PTICs in 2,000 villages, the agreements are expected to be finalised in the current financial year .
Measures for Faster Growth
The UPA Government has taken many pro-active measures to contribute towards faster expansion of the telecom network. To begin with, the performance bank guarantee for the National Long Distance Service licensees was reduced from Rs.100 crore to Rs.50 crore. To encourage end-to-end bandwidth provision, the licence fee for Infrastructure Providers-II has also been reduced from 15 per cent to 6 per cent of the AGR in June, 2004. Similarly, Internet Service Providers (ISPs) were also permitted to use underground copper cable for establishing their own last mile linkages. The Government has also approved the enhancement of FDI ceiling from 49 per cent to 74 per cent for major telecom services in February 2005. In the first Budget of the present Government (2004-05), Customs Duty exemption was provided on Switching Centres for unified access service providers, optic fibre cables (OFCs) and raw materials required for OFCs. In the subsequent Budget (2005-06), Customs Duty on import of component and raw materials required to manufacture telecom equipment has been reduced to zero. The Customs Duty on all the 217 ITA-1 items will also be zero. Similarly, for the inputs and capital goods required to manufacture these items, the Duty has been reduced to zero. The Corporate Tax has been reduced from 35 per cent to 30 per cent benefiting the telecom operators and manufacturers as well. The removal of the mobile telephone connection from “One out of Six Criteria” for the purpose of Income Tax return will also encourage faster expansion of mobile telephony. In the area of broadband connectivity, a well laid out broadband policy was announced in October 2004. To encourage expansion of broadband connectivity at a faster pace, both outdoor and indoor usage of low power Wi-Fi and Wi-Max systems in 2.4 GHz -2.4835 GHz band has been delicensed. The use of low power indoor systems in 5.15 – 5.35 GHz and 5.725 – 5.875 GHz bands has also been delicensed in January 2005. Further, to expedite the process of spectrum allotment, an automated spectrum management system has been commenced and to meet the increasing demand of spectrum users, efforts are on to get the spectrum released from other spectrum users for public telecom services. On the tariff front, due to increase in competition and fast expansion of telecom network, the telecom tariffs for both NLD and ILD have decreased considerably – benefiting the consumers at large. The introduction of revised access deficit charge regime from February 2005 has also resulted in further decrease in tariffs for long distance calls.
As a result of the initiatives of the Government to encourage the manufacturing in the Telecom sector, tie-ups between Alcatel and ITI for their Rae Bareilly and Mankapur plants, agreement between Alcatel and C-DOT for setting up a global research centre for W0-Max Technology in Chennai have been finalised. Similarly, for manufacturing mobile equipment, Ericsson has upgraded their plant at Jaipur, Elcoteq has set up a plant in Bangalore. Nokia and LG have announced their intention to set up their plaints in Chennai and Pune respectively. These are very positive signals for making India self-reliant in the field of telecom equipment.
INFORMATION TECHNOLOGY
Indian Information Technology (IT) and IT enabled services (ITES-BPO) continue to chart remarkable growth. The Indian software and services export is estimated at Rs. 78,230 crore (US$ 17.2 billion) in 2004-05, as compared to Rs. 58,240 crore (US$ 12.8 billion) in 2003-04, an increase of 34 per cent both in Rupee terms and dollar terms. This segment will continue to show robust growth in future also. As export revenues from ITES-BPO grew from US$ 2.5 billion in year 2002-03 to US$ 3.6 billion in the year 2003-04, an year-on-year growth of 44 per cent was achieved. In the year 2003-04, ITES-BPO exports accounted for over 27 per cent of the total export revenue earned by the Indian IT-ITES industry. The value of ITES-BPO exports from India is expected to exceed US$ 5 billion mark in the year 2004-05. The total number of IT and ITES-BPO professionals employed in India has grown from 284,000 in 1999-2000 to over 1 million in 2004-05, growing by over 160,000 in the last year alone.
e-Governance
National e-Governance Plan has been drawn covering 10 components including 25 Mission Mode Projects. The Department of Information Technology (DIT) has made a provision of Rs. 300 crore for e-Governance in its Budget for the year 2005-06. Further at the instance of DIT, the Planning Commission has kept a budgetary provision of Rs. 300 crore as Additional Central Assistance (ACA) to States for the National e-Governance Plan (NEGP). Policy guidelines for technical and financial support to States for establishment of State Wide Area Network (SWAN), upto the block level with a minimum Bandwidth of two Mbps to provide reliable backbone connectivity for e-Governance, have been announced on October 20, 2004 and circulated to all States for formulation of project proposals. The Government has approved the scheme for establishing SWANs across the country in 29 States/6 UTs at a total outlay of Rs. 3,334 crore. A Mission mode project known as India Portal under the National e-Governance Action Plan to provide a single window interface of all Government services to the citizens at the national and State level has been implemented by NIC, as an extension of the 'India Image' portal catering to the G2C services. DIT has taken up the initiative to set up Community Information Centres (CICs) in the hilly, far-flung and rural areas of the country to bring the benefits of ICT for socio-economic development of these areas by providing broadband connectivity. Based on the experience of CICs in NorthEastern States, it was decided to set up 135 CICs in all Block Headquarters of Jammu and Kashmir. In the first phase of the scheme, 60 CICs have been made operational by October 2004 and the remaining 75 CICs will be operationalised in the second phase by October 2005.
DIT has launched a process of dedicating in phased manner the tools, products and resources for public use in Indian languages developed by Government support and other independent initiatives. As a first step in this direction, various Tamil language fonts, e-mail client in Tamil, OCR, Spell checker, Dictionary (English-English-Tamil) and (Tamil-Tamil-English), etc., were released in public domain for users on April 15, 2005. The rest of the Indian languages are expected to be covered in the next one year.
In order to bring about a substantially increased proliferation of '.in' domain name, a new '.in' internet domain name policy framework and implementation plan has been formulated. The new policy announced by the Government seeks to remove restrictions in the existing procedures and aims at adopting a liberal and market-friendly approach to register large of '.in' domain names. The registration has already crossed more than one lakh registrations. For this purpose ‘.in’ Registry was created by the National Internet Exchange of India (NIXI) promoted by the Department of Information Technology (DIT), as a ‘not-for-profit’ company in association with the Internet Service Providers Association of India.
The High Powered Working Committee on ‘Improving PC penetration, Internet and Domestic Software’ consisting of mission mode projects submitted its report making its recommendations on the aspects of IT enabled teaching, and IT enabled Energising of Rural India, Telemedicine, Promoting Domestic Hardware, e-Governance, Framework for Development of PC manufacturing and its Supply Chain in India, Internet penetration, Multi-lingual Software, etc.
POSTS
India Post has completed 150 years of its existence in October 2004 and is celebrating its Sesquicentennial Year. During the year 2004-05, 839 Head Post Offices, 1,533 Sub Post Offices and 53 Administrative and Accounts Offices have been fully computerised. Further in 58 Post Offices equipment have been supplied to mechanise various postal operations and 150 Post Offices have been modernised by improving ergonomics. The second phase of the project for computerising counters at General Post Offices in Bangladesh, Myanmar and Nepal which involved installation of software and training of officials of the three Postal Administrations has been completed. India Post has received US$ 38,600 from the Universal Postal Union for successful completion of the phase. The third phase is to be taken up soon. Senior Citizen Saving Scheme introduced on August 2, 2004 for sale at 9 per cent interest through Post Offices. The scheme is basically intended for senior citizens for investing their savings in an attractive scheme with considerably higher interest rates. Bill Mail Service -- bulk booking of bills/statements -- has been extended to National Bill Mail Service with effect from February 16, 2005. Under this, bills booked in bulk, can be delivered all over the country at cheaper rates. Logistics Post Service launched to provide end-to-end logistics support to business firms sending out parcel consignments. The service is now available in Rajasthan, Maharashtra and Tamil Nadu. A Parcel and Logistics Division has been established with a supporting structure at Circle and Lower Levels.
RK:LV
PIB SF-47 (16.5.2005)
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