Rationalisation of telecom levies will propel investments: Trai Chairman

In saying that “profit maximisation is not the objective of the government, the National Digital Communications Policy (NDCP) had finally addressed a long standing demand of the private telecom operators, as it acknowledged that rationalisation of taxation structure could foster growth of the sector, the chairman of the telecom regulatory authority of India” (Trai), RS Sharma said at the ET Telecom India Mobile Conclave.

The Trai chairman was referring to the NDCP policy approved by the government last year, which aims to create four million jobs and draw a whopping $100 billion worth investments into the telecom sector by 2022, apart from boosting the sector’s contribution to GDP to 8% from current 6%.

Elaborating on the point, Sharma highlighted, “the industry has been saying that it is highly taxed, and, we at the Trai in the past have given certain suggestions to rationalise the tax structure, but now these fundamental statements have been articulated by the policy”.

He said that the policy statement of how profit maximisation was not the objective of the government, but how the government wished to maximise the growth of the industry implied, the government didn’t have to get revenue from one particular aspect of business through heavy taxation. Instead, rationalising of taxes would allow more ploughing back into the business, thus more investment leading to to more jobs, and in that way more revenue to the government.

He explained that rationalisation of taxation structure would eventually lead to fostering innovation of healthy innovative telecom equipments in the country. He also highlighted other crucial aspects of the policy such as establishment of a clear data protection regime and a about national fibre authority.

Sharma also acknowledged how sectoral regulation and regulators themselves need to evolve as sectors expand beyond their traditional outlines. “Regulations also require change, who could have thought some five years back that Trai will introduce paper on data protection, security and protection. But we did it, and with industry’s help, and we provided some very important inputs on the issue”, Sharma explained. He added that converged regulators require a completely different treatment of issues. “The regulatory regime must keep up with change in societal structure and regulators must also not remain static in approach saying that these are my four or five areas. Regulation must be Futuristic,” he said.

Talking about the digital revolution and its impact on ordinary lives, Sharma said convenience, confidence and cost were the bedrocks for mass scale uptake of digital services. He elaborated how the payment platforms, were promoting the digital progress in the country. “The total number of transactions, the unified payment transactions has gone up to 700 million transactions per month. This is a very large number which surpasses by a factor of two or three the total number of credit card or the debit card transactions which happen in this country, while credit card and the debit card transactions have been happening for the last 40 years”. This scale and the speed, Sharma said, happened because of the 3Cs which are cost, convenience and confidence. “Confidence could easily be said to be trust, slowly and slowly people are developing trust in the technology and finding it very convenient to transfer money in comparison to even net banking , which can take as long as 24 hours,” he said.

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