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27-Jul2016

Telecom sectors' contribution towards non-tax revenue may touch 5 year high in FY17: ICRA

Ahead of the mega telecom spectrum auction, domestic Credit Rating agency ICRA has said that the sector's contribution towards non-tax revenues of the government in the current fiscal is likely to be the highest in the past five years due to the auction, which is likely to take place in September this year.

The rating agency in its latest report has said that though the spectrum auctions have not been a regular feature, nevertheless they have contributed Rs 1,59,000 crore over the last seven years. Overall, the communication sector has contributed at the least 14 per cent to the non-tax  revenues of the GoI each year, and we expect the contribution to remain healthy going forward.
 
It added that the telecom industry would contribute at least Rs 55,000-60,000 crore to the non-tax revenue receipts of the Indian government for each of the next 10 years, excluding any cash flows from other levies and assuming no change in spectrum usage charge (SUC) calculations. The sector occupies a critical position in the economy and license fees and a spectrum usage charges are the primary constituents of the communications sector's contribution to the non-tax revenues of the government.

According to ICRA, in the past seven years, the telecom sector has contributed about Rs 3 lakh crore to the non-tax revenues of the government, amounting to 24 per cent of the total non-tax revenue receipts. Out of the Rs 3 lakh crore contributions, SUC has contributed Rs Rs 38,000 crore, growing at 12 per cent per annum.

However, it has also said that the government is likely to miss revenue target of Rs 98,995 crore from telecom services budgeted for the current financial year even though its contribution will be sizeable in FY17, though the sector will contribute to the tune of Rs 5-6 lakh crore over period of next 10 years.


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